Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Good morning Mr A. I hope you are well. I see the last chart you drew our attention to, again held good for barely 24 hours, before being self-invalidated by the writer as the SP went below £1.62.2. I will try my own chart and say that the SP will hit £1.70 in the next two weeks, subject to 2 conditions. Condition 1 - the SP doesn't fall below £1.55. Condition 2 - the SP doesn't hit £1.70. I think that covers me well enough to keep my credibility intact.
This is in no way meant to be critical of Mr A whose views and posts I respect. But since I commenced investing in Barcs, 9 years ago, I must have read hundreds and hundreds of posts telling me the banks value and SP is understated and it is about to take off etc. etc. and providing all manner of forward looking metrics and charts in support of the assertion. But examine the brutal reality. It was seven years ago that John McFarlane believed it credible that the SP, then standing at £2.60, could be doubled in three years. It was subsequently, actually more than halved. Staley slapped down his multi-million golden handshake in Barclays when the SP was £2.30 and for virtually the whole of his tenure, the SP remained well below that price (he's the same guy who said we would see the 'roaring twenties ' return after the pandemic - we now stand on the cusp of a global recession!). For those talking about a SP of £3 and above, the last time it closed out at over £3 was in May 2013. If it hasn't touched that in the last nine years, there are no grounds for believing it will do so in the next nine years - it is just wishful thinking. A stretching but potentially achievable target, over say the next 18 months to 2 years I believe, is £2.40 - but that is still a big ask - it hasn't closed out at that since October 2015. I absolutely get that the volatility with the Barclays SP and the underlying belief, it seems, that it is a 'sleeping giant' makes it a good short term trade option. This is because it is the first to react badly to negative global and economic news - but does bounce back. And when it looks ready to take off, the markets lack of trust and confidence in Barclays, always put it back on its haunches (a situation that will remain until the Barclays board recognises their reward to shareholders programme is seriously flawed). I won't dwell on the self-inflicted conduct and litigation issues that have swamped Barclays over the last 15 years. So there probably is money to be made in Barclays trading on its regular rise and fall, within a 20p parameter, if you have the funds and nerve to do so. But if you are investing in the belief that this SP is going to hit £3 anytime soon - a word of caution. The banks own Chairman in 2015 thought the SP was undervalued by 50% at £2.60. The markets have shown him since that £2.60 was actually a fantastic price and what we would give to have that back now! It might seem unlikely now, but 7 years hence we might be saying that £1.60 was a fantastic price - God forbid.
I agree the sentiments of Crunchynuts and M1k3y. Regardless of what the results are, I just think the economic outlook and negative perception of Barclays will give the markets a reason for focussing on the negative aspects of the Q2 report and have the SP back down to the low £1.40's by the end of the week or early next week. I would obviously be delighted to be proven wrong, but after nine years of pain, my instincts are getting pretty honed on this share.
Hello Mr A. I know you know I mean you no personal offence in my reference to charts. But returning to the link you provided, I quote.... "Only a currently unexpected bearish reversal and fall through last week’s low at 153p would negate the currently short-term bullish outlook. Even then the major March-to-May 142.1p to 140.1p support zone would once more be expected to hold..." Well the £1.53 line didn't hold very long did it! So I suppose we take comfort that the SP is not going to go lower than £1.40.1 - unless of course it does go lower than that - in which case according to this guys predictions it should hold at £1.25.1 - which is quite some way off the £2.14 he was hoping for.
....but its back down the ladder we go. £1.40's on its way, then how low?
Hello Mr A. Thank you for the read, but you know my view on charts. All I can read into this one is that in the foreseeable future, this guy thinks the Barclays SP is likely to find itself somewhere between 125.1 and 214.6 - a pretty broad window from someone trying to convince us that his charts are the next best thing to a crystal ball. I wonder if in January 2020, when the Barclays SP stood in the £1.80's, whether this guys charts predicted a pandemic low of 70p? I suspect not, but then again, his predictions about the Barclays SP movement, operates through such a broad window, perhaps he did, together with a predicted ceiling of around £3 . Good luck with your recent investment though, it looks like, short-term at least, it is paying off.
Yes it is Rocklawn. Which is why (a) I don't understand what the board are seeking to achieve through buybacks and (b) why people seek to predict where the SP is going through charts. Global and economic market conditions are sending bank stocks down (with others of course) and whilst it may be argued that Barclays business model separates itself from the other banks and suffering more than the rest of late, I think the other main issue besides market conditions is 15 years of negative sentiment against Barclays. IMHO I can see people making money day trading on the stock or buying in when there is an irrational crash, but seeking long-term capital appreciation on this stock is hopeless. You have to go back over 5 years to see when the SP last closed above £2.30, so analysts putting forward targets of £3+ (£3.69 was mentioned the other day!) are having their minds altered in some way. If the Barclays board cared about improvement in the SP (and I am not sure they do), they must have realised that business results are not going to take it there on its own. They must recognise the devastation banks behaviours and the SP has done to investor confidence over the last 15 years and to seek to redress it, they (a) need to act ethically and responsibly and eliminate the negative behaviours and (b) they have to recognise that investors will need attractive returns on their investments - and for many years the returns have been atrocious. Otherwise, where's the incentive to invest long-term in Barclays?
I can only go by my instincts Bhavik and think talk of bear markets, inflation worries and global recession are affecting global equities sentiment. Rather than any actual crash, it seems a two steps forward and three steps back pattern. And when economic woes hit the UK, banks suffer harder than most. And when UK banks suffer, Barclays seems to suffer the most (despite the buybacks!). It finished on the loss leaderboard today, significantly the worst performer of UK banks, with Standard Chartered and HSBC actually amongst the highest risers! My instincts tell me we will be back in the £1.40's before the £1.70's.
A £3.69 target by Jeffries Financial Group means what exactly? I gave myself a much more modest target of £3 - I am now in the 10th year of waiting to hit target! As to 'Crunchynuts' comment about buybacks and dividends, it is what I have been saying since the 2.5bn buy-back started over a year ago. 'Shareholders love buybacks' I am continuously been told. But no-one can explain why and shareholders that I hear from, say they would much prefer the cash dividend. As we have seen buy-backs have negligible effect on the Barclays SP. It's the market and Barclays mess-ups that dictate that. So a Barclays buy-back appears to follow this process. "Take £2.5bn - convert it to liquid - pour it down the drain - but on no account give that £2.5bn to shareholders as dividends, because that is worth 40p a share to them and we can't give money like that to the owners of the bank!"
kennynwten: You were spot on.
Hello JayK. I know you meant no offence. Your earlier post did jar with me, but I do generally have respect for your posts as you are usually proven correct and I of course did agree your view about the markets last week, that hit every stock (and I fear worse to come). It's just that every investor is different, they have different outlooks and different attitudes to risk and loss - yet none of us is working with a crystal ball. I have tried everything under the sun in the last nine years to try and get on an even keel and (in terms of capital investment) came within a whisker of 'break even' in January when the SP hit £2.19. Obviously, if I had that crystal ball I would have got out then. And fair play to those who did get out at that time and fair play to one contributor to this site (and it might have been you) who warned at the time to 'get out' as they thought it was going to 'pop' because it went up too fast too soon. I didn't get out, because, in terms of the terrible returns over the nine years, it would still have been a significant loss. And so, in this most frustrating game of snakes and ladders, back down we went to £1.40, partly of course due to global economics, partly due to Ukraine, but significantly contributed to (again) by Barclays repeated mismanagement. Which continually brings me back to the point about buybacks. When this latest round has finished that will be £2.5bn paid out in this manner. I seem to recall the SP was around £1.85 last year when they started. There is no guarantee they will be at £1.85 or above when they finish. So what quantifiable benefit have shareholders received for that sum? Compare it to market reaction when the light is shone on (yet another) Barclays fiasco, that costs the bank £0.5bn and the SP tumbled 10% in a day, with the lasting damage again, being unquantifiable. I
mm.. JayK. As a long-term investor of 9 years standing and having managed to bring my average down from £2.70 to £2.20 in that time and been absolutely stiffed in terms of annual dividends over those nine years, can I just clarify how long, should long-term investors patience last in your opinion? And is 9 years and carrying a current 30% loss, looking at matters too much in the short term would you say? Sorry to ask, but as you say, I clearly need educating, as probably do those poor souls who might have bought in to Barclays when the SP was standing at £7.
Manunited31: To be fair negative external market forces are at play here. But it emphasises my previous points. If the theory is that buybacks reduce the number of shares in circulation and demand pushes up the SP on those left in circulation and increases the amount available for cash dividends on those shares - what is the practical reality? The difference on a daily basis of the buybacks is undetectable, yet another Barclays ****-up can see the SP drop 10% in a day. And when negative market forces are at play, it tends to be accentuated in Barclays because of its 5-10-15 years of negative and untrustworthy behaviours. And are we really going to see an increase in cash dividends paid, due to the reduced shares in circulation? The dividend returns over the last nine years have been appalling. And I unfortunately was involved in Barclays just before the rights issue of 2013 where I was forced to buy into that £5.8bn 'money-raiser' at the supposedly discounted price of £1.85 a share, that put another 3.2bn shares in circulation. Stop messing about with pointless buybacks, I say. Pay the cash over to shareholders or invest it in stock worth buying - which judging by the last nine years performance - isn't Barclays!
Thanks Newdealz. So Barclays could have said the buyback was worth 50p a share and no-one would be any the wiser. I for one cannot understand why the media always say shareholders love buybacks. If I got a further 15p a share cash dividend, which I admit would be spectacular by Barclays standards, I at least would know what value I was getting. With buybacks - I don't.
At the risk of embarrassing myself with a daft question, can someone explain? I assume if the open SP is £1.70 and the number of shares sold in the day matches in number and value the shares bought in the day, then the closing price will still be £1.70. If however, the shares bought included 10.5m bought back by Barclays and cancelled at an average cost of £1.70 - what would the closing price be, if there was no buy-back on that day? In other words by how many pence is the buy-back propping up the Barclays SP on a daily basis - or is it an impossible question to answer? I recall Barclays saying the buy-back was worth 15p to shareholders. At the risk of answering my own question, it might suggest that if the 10.5m were bought every day for 80 days, the answer would be 15p / 80 or 0.1875p added to the share price each day. Any thoughts please?
This response does not mean I hold myself out as an expert - I am anything but. But happy to give my view. In the immediate term I think the SP will fall a little more today - perhaps to £1.42 then bounce back to around £1.46 by close of play. All guesswork. With it currently standing at the £1.45 mark is it more likely to hit £1.40 before £1.50? On balance, I think £1.40. The only thing to stop the fall is the market coming to the conclusion that we are close to the bottom, so that buyers start outweighing the sellers. But to my mind three key things are weighing in favour of a further fall, rather than a recovery. The war in Ukraine - it has taken an average of 10% of the SP of British banks - though of course Barclays is down over 25% since 23 February. Who thinks it is more likely there will be good news in respect of the war that will boost the SP of British banks, rather than further bad news that will depress it? Not I. The second factor - complete silence from Barclays regarding the securities fiasco. No attempt whatsoever at damage limitation on the markets, suggesting to me they do not yet know themselves the real damage caused or are too scared to tell us. And third - and most important - the negative sentiment and complete contempt felt towards Barclays, both in relation to its recent history and to this latest calamity, as exemplified by our largest investor selling up, no doubt in complete disgust and at a huge loss - why buy in if they have sold up? You cannot under-estimate institutional investors attitude towards Barclays - it is an organisation that simply cannot be trusted. And every day that goes by and every minute of silence from the board and every time there is another fallout from another calamitous bungle or malpractice from the bank and that bargepole with with investors touch Barclays gets longer and longer and longer. Having said all of that I do acknowledge the views of investors who say I'll buy in now and wait. I don't care if it goes down further because at some point in time I think it will get back up to £2 and I will make a good profit and pick up dividends along the way. All i can do is try and grit my teeth further and ride it out - hopefully with sanity still intact.
Sorry Mr A but my view is I could come up with the same numbers staring into a pot of tealeaves. It's gobbledegook. How is it factored into these numbers that Barclays keeps shooting itself in the foot with scandal after scandal and sheer incompetence? Its recent act alone, sending the SP down from £1.70+ to £ 1.40+ in a matter of days? We heard from Mr Wolf say recently that John McFarlane genuinely believed that the share price could be doubled in 3 years to £5.20 when he spoke privately to Barclays staff on 8 July 2015, when the SP stood at around the £2.60 mark. What does it say about JF and the way the bank is run, that the SP has never seen £2.60 since September 2015 let alone get over £3 and that analysts now suggest there is more likelihood of the SP going below £1 than rising above £2.50? The fact is that had the bank not been subject to self-induced scandal after scandal, misbehaviours and incompetence in the 7 years before JF's comments and the 7 years since, then Alistair Strang would today, be looking at a whole different ballpark in terms of the numbers. The banks actions have savagely torn into investor trust and confidence over the years, so that Barclays is now viewed as a high-risk investment, but investor rewards fall way short of being reflective of that risk. And the most galling aspect is that those paying themselves millions and millions each year and purportedly acting in our best interests, don't seem to get it! They are convinced that having shelled out £1.2bn in buybacks already, that has taken the SP from £1.82 to £1.47, that the answer to lifting the SP again, is to throw another billion at it - then have the nerve to tell us the act is worth 9p a share to us as shareholders! It may be that the SP will be lifted by the buyback, but will only hold good until the next Barclays scandal emerges and then the stock plummets again. If the board are genuinely acting in our best interests, then the best they could do is to pay us the 9p per share the buyback is said to be worth, then put the bank up for sale. This being seen as an acknowledgement that the current damaging culture is so ingrained in the bank and has been for more than a decade, that those currently running it, who are clearly part of the problem, are incapable of rectifying the situation.
Remember those 'Paul is dead' rumours that surrounded the Beatles around about 1968? I fear the same rumours are circulating in respect of our beloved CEO. The story goes that on or about 17th January of this year with the Barclays SP standing at around £2.19 he was hiding in his Barclays office when a shelf stacked with securities fell off the wall on to his head and killed him instantly. Some shareholders had inside knowledge of the incident, which is why over the next two months the SP fell nearly 25% - but the rest of the world didn't notice. It is only after the latest Barclays calamity and the prospect of the SP falling by another 15% on a run of 10 consecutive days of losses, that the rumour is now really gaining traction. Apparently the Barclays board are frantically trying to find a lookalike replacement in time for the forthcoming AGM. That will be the hard part. The easy part will be to spend 40 minutes with the lookalike and educating him on how to run this shower of xxxx on £15m a year.
Don't know Zebbo, but I think Barclays silence is significantly contributing to what now looks like an 8th consecutive day of losses.
Great read and great to see institutional investors feel exactly the same as us frustrated small fry private investors. But the problem is Barclays keeps getting into hot water because the whole leadership has been brought up in the same culture that brought about the financial crash 15 years ago - nobody is held to account, so nothing changes and therefore it's carry on as before. It is the same culture whereby 'Fred the shred' brought about the collapse of RBS all those years ago - don't waste time and money on due diligence - if it is going to make us all fantastically rich, just do it. And the footnote to the article. 'Barclays declined to comment'! Not a peep from the CEO on this debacle, so nothing to stop the wild speculation as to how bad the mess is at Barclays and nothing to arrest the fall of the SP.