The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
I'm still holding, and I keep telling myself over and over "be patient, be patient, be patient...".
I'm trying to get a grip on where the share-price realistically should be - and that I can't come to a conclusion on - given that three months ago they were ca £1.35 I can see why some people are nervous and see £1.80 as a top but Barclays are still undervalued when you consider the amount of profit they'll make, their overall net asset value and just about every other metric plus they are cheaper than their peers on a P/E basis but it's all about whether the market likes the numbers or not and then there's how much of a dividend they'll throw back at us as well as debt provision and the general economic outlook.
I think there's some mileage left in the share price before results day so I'll hang on a while longer.
Congrats - that's a decent profit in both percentage and real terms.
It's always hard to gauge the best price to sell at, I think there's more mileage left in the shareprice but leaving some profit for the next guy is never a bad move.
It's hard to compare US banks with British banks - they have a different model with banks focused on retail banking only and others just do corporate banking, while our banks freely do a mix of both.
My thinking though is that earnings for US banks will be down while money put aside for bad debts will be higher, but a lot of that will be priced in or at least expected, it's just the details we need to worry about here. And remember, higher interest rates = higher net interest margins. Most banks will be coining it in on NIM - and to an extent this is unexpected profit, no one saw interest rates spike this high.
The fall in share prices (on both sides of the Atlantic) has made P/E ratios more realistic and in this febrile environment companies that pay dividends are a more attractive investment. Look also at the tech sector - especially companies on high P/E ratios, across the board they had a bad year. There's a news story out that Elon Musk's personal wealth, in paper terms anyway, decreased by about US$180bn over the last year, remember that next time you stub your toe.
The banking sector always trades on much more realistic yields and with dividends should be seen as a relatively safe bet for investors. That said expect some turbulence, there always is. JP Morgan, Wells Fargo, Bank of America, Citigroup and BlackRock are posting their numbers before Wall Street opens, so keep an eye on the news early afternoon our time.
The sharetrading issue seems to have been with ii's platform. There was a note saying they couldn't get accurate prices I think due to a third party. I didn't pay much attention because I wasn't buying or selling. I did though just try a dummy order and the platform seems ok.
Certainly higher - but there are lots of variables, competitors, industry sentiment, news on the dividend etc.
I'll go for a conservative £1.72, certainly the real value is much higher.
We really break through the £1.60 mark that we keep bouncing off and close above that level for a few days.
I'm still holding and happy to do so...
Whatever the short-term noise bear in mind that Barclay's generated £8.4bn of profit in the last year which should be easily surpassed when the next full year results are published , the quarterly numbers this year have been good. Yet despite printing money the share-price has fallen this year, so those who bought on weakness will cash in. Patience is the key here...
Good luck...that's a sizeable investment but one that will pay off even if we have some choppy weather for the next few days.
Be greedy when people are fearful and fearful when people are greedy as Warren Buffett once said.
What I like about Barclays is that the fundamentals are pretty solid, I can't see much downside from here.
Maybe tomorrow but if not almost certainly by early next week if I think you will be right.
An increase in interest rates should be good for the banks - they can charge more for mortgages, loans, overdrafts etc and as we all know they rarely increase interest rates on savings accounts by the same amount that they loan money out.
Currently Barclay's share price seems to be in that zone where the market is ramping it up to around the £1.61 level and then over-selling before a nice little jump again. For us private investors selling the highs and then buying back on the dips isn't going to make us much money, on the margins that the institutional investors operate on you can make a tidy profit.
I have nothing concrete to add which would explain today's rise, but the shareprice looks like it is simply bouncing around between the £1.57/£1.61 levels, other than a sniff of a breakout above the upper limit it's been at this level for a couple of weeks now.
There's some money to be made buying the dips and selling the highs, but only if you have reasonably deep pockets.
What is worth noting is that NatWest has just overtaken Barclay's in terms of market cap - £31bn v £30.7bn.
I wouldn't pay much attention to the actual shareprices - NWG have had a couple of share consolidations, the most recent a couple of months ago which has shoved their shareprice up a bit.
Their relative P/E ratings are different - NWG - 9.5% while Barc is lingering at 5.09%. Barclays is too low for a company that registered a profit of £8.4bn earlier this year.
NatWest though did give the punters a special dividend this autumn - 16.8 pence a share.
You ask about the chartist position...
I'm no expert but just about everything I can see is positive.
The current trading range looks to be between £1.61 and £1.57 so we could well test those a few times before breaking through. There was a bullish looking MACD crossover yesterday which suggests to me that mid-long term (i.e. over the next month or so) the share price should break through the upper trading range. There looks to be deeper support at £1.46 and should we get there, £1.80ish looks to be an upper line of resistance.
But the charts aren't everything...we live in febrile times the geo-economic uncertainty around may have the final word.
Currently I'm happy to hold, the Autumn statement was relatively kind to the banking sector and they are churning profits and printing money at the moment with Barclays being no exception.
As I see it Barclays (and the other banks) are seeing their tax rise to 28% - 25% Corp Tax and 3% surcharge tax. This was flagged up before the Autumn Statement/carefully leaked to the media. Previously the tax situation would have been 19% Corp Tax plus 8% surcharge tax. So a rise of 1% overall. That's pretty lenient considering. There are other taxes to factor in though.
Short-to-mid term - certainly until financial year end and maybe Q1 next year the future looks good even though we are in recession in the UK. Bear in mind that Barclays has good geographical diversification so isn't over reliant on the domestic market.
Regarding a surcharge/windfall tax on banks this week...banks are already subject to a windfall tax of 8%. The issue is that corporation tax is rising to 25% and this would make the basic tax paid by the likes of Barclays up to 33% (plus there are other taxes to factor in). The plan was to reduce the surcharge to 3% but there was some speculation that it would only be cut to 5%. According to leaks/rumours this won't happen, but who knows...