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LLOYDS is going to FLY

lse:lloy

#2278

Difficult to imagine such a poor outcome, a loss in real terms, given the bull run we’ve just had. I suppose a lot of that was the recovery from the 'great recession’as they call it in USA and also note the dates - they’ve included the dot com crash in that 20 years also.

Even so, seems a little off to me.


#2279

I’d be avoiding tobacco stocks also given the back-lash their main new growth area, vaping, looks likely to be feeling very soon.

Very up market retailers might be a good idea. The rich rarely seem to get poorer, no matter what the rest of us might be suffering. Just a thought, I’ve done no research.


#2280

The richer you are, the less tax you pay.
The more you have, the more doors are flung open to protect your wad from the clutches of the taxman.


#2281

My point exactly - so what listed companies serve these top one or two percent? Ferrari?


#2282

No. I don’t think the recent upticks have much to do with those companies underlying recovery or strengths, just a (misplaced) belief that maybe the Brexit uncertainty nightmare is ending. This is also set against being cheap FX wise and a booming US market - what happens when that downturns?

Any of these stocks can be made to work for the daily long/short trader of course. But would I lodge my savings in such dogs? No chance.

IMHO,

SBK


#2283

Burberry and LVMH are two that immediately come to mind…

ATB

Pref


#2284

Not been funny

But if we see under 55p here over the next few months, I start topping up again on already my monster Lloyds Portfolio held in the Pension Fund

Lets not kid ourselves here, Lloyd’s Banking Group somehow managed to refund over £22 Billion pound in PPI rewards to date over nearly a 10 year period and still started to pay a small Dividend and not gone Bankrupt ( amazing ) … not many FTSE 100 would of survived this massive Bill and still making billions year on year

SO

I am not about to jump ship now, yes yes we down 7% again from 63p 2 weeks ago blah blah … BIG DEAL , yes to the day trader, not to any long term investors looking at long term targets

The party begins in 2020 here with Lloyds IMHO

The next 10 years WILL BE payback here to anyone like me a Black Horse loyalist


#2285

Not many FTSE 100 companies would have been bailed out by the taxpayer OR been allowed to carry on in business after committing fraud on such a scale! Or any scale, in fact.

Still can’t believe no one had done time over PPI.


#2286

Hi Eadwig,

In fairness, if Brown’s government hadn’t swayed LLOY’s then BoD to absorb the toxic mess that was HBOS, LLOY would be in a better place. Taking on that multi-billion pound burden alone cost LLOY holders massively.

As I recall before I even started trading in 2009, a couple of years earlier there were a fair number of reports in the financial press critical of LLOY for being too traditional, far too safe, not adventurous enough compared to other banks. The greatest financial damage to tax-payers was done by investment banks like HBOS & RBS. LLOY would’ve been relatively okay if not for taking on the HBOS disaster. - Regards.


#2287

Fair dues Jack 100% correct…

All we want is our old Lloyds Bank values again , traditional, Safe and very boring


#2288

Whilst the investment bank units played an essential part in the financial crisis via products such as CDOs/sub-prime loans… it shouldn’t be forgotten that it was the irresponsible retail bank outfits at the large base of this pyramid giving loans to people with questionable credit history that caused it to be systematically faulty enough to collapse.
In the UK it was the the retail outfits that first collapsed like Northern Rock.

I’m not sure Lloyds was going to be OK in 2008, it had a massive write down and it might not have survived irrespective of HBOS.
It actually ended up gaining a large number of customers in an uncompetitive way… something that may still come back to haunt them.


#2289

Lloyds won’t be safe and boring for a very long time until it rids itself of all the non traditional businesses.

Since 2008 financial crisis, Lloyds has been technically insolvent which the government at the time soon realised. However, Lloyds and RBS problems for the government were very different and to be resolved required different actions.

Lloyds business were all bad and could not be sold in parts as RBS was carved up leaving just a bad bank. At the time, Lloyds knew of its pension liabilities, credit card bad debts, PPI etc but could not place a one off liability of over £85bn when the market capitalisation was considerably less. The Lloyds directors and government derived the only way out, was using Gordon Brown tactics in reverse, by drip feeding these known liabilities from future investment income to a level that is acceptable by the market. this enabled Lloyds to continue as an ongoing business. However, Lloyds did not expect the security of the car leasing being eroded by falling car prices from over supply of second hand cars.

With the current generation being told that it is OK not to repay student loans, this will have increasing bigger effect of bad debt on normal bank loans and credit which will eat into Lloyds profits for the next 20 years.

Lloyds need to tighten up on credit return transactions as unpaid.


#2290

Hi JW,

Thanks. Valid points. I agree it’s hard to say what exactly would’ve happened to LLOY in 2008 & me saying “okay” is of course relative to the devastating global carnage that spread throughout the sector back then. Obviously LLOY were also badly affected with rising impairments. No-one could deny that. But not to the degree of HBOS, RBS, et al.

Regarding my point about the impact on LLOY from absorbing HBOS, I recall the argument even went to high court about 2 years ago.

Indeed so re Northern Rock, which used to be just another boring building society. But a while after floating on the LSE, along with a few other former building societies, it became a bank & chased ever bigger profits, which meant taking on riskier speculation.

But HBOS & RBS were by far 2 of the worst UK offenders for toxic impairments, largely as their exposure was also global. A lot of their speculation was in USA’s dodgy sub-prime.

But I blame Reaganomics & Thatcherism more so for unleashing the degree of financial recklessness we saw back then than any individual banks. I mean they were all at it to a degree because they were encouraged by loose deregulation. - Regards.


#2291

Hi @regardless, Well you don’t seem to have a good word to say about those trading LLOY but you aren’t above doing a bit of trading yourself are you - for example your BDEV trade !.

Regarding your long term aspirations for the LLOY share price I am not going to say that the share price is never going to get to your ~80p (?) target. But if you looked closely at the detail of the results on Thursday they said that the current net asset value per share (that’s the value of ALL of Lloyds assets – ALL of their liabilities, divided by the total number of shares issued) is 52p. Is it any wonder then that the share price is only ~57p, as anything over and above the 52p is simply hot air…… And those billions in profit that they make amount to about 3-4p a share. So getting to 80p (ie ~50% higher) is going to take some doing I reckon.

Also you talk about selling your LLOY holding when you reach your target, and I recognise that this would give you a nice cash lump sum. But what exactly would you then do with that then ?. Stick it in current accounts and get paid about 1.3%pa interest ?. When just keeping it in LLOY you would get paid more like 6%. Why would you do that ?. Makes no sense to me.

Actually if the LLOY share price drops back closer to 50p then I may actually buy some. And I only mention that figure because at that level I would feel comfortable that any capital I invested would not be lost to a falling share price. I am attracted by the close to 6% yield and the move to quarterly dividend payments. If I do invest I personally won’t be bothered if the SP doesn’t do a whole lot, as long as it doesn’t fall significantly AND they continue to pay the dividends. That would make the share into a pretty good replica of an old fashioned savings account, but paying 6%. Fine by me.

Anyway LLOY recovered most of yesterday’s losses today, so no great damage was done.

Have a great weekend.

ATB

Pref


#2292

Hi @Eadwig, So I’ve taken a look at ISPY and there is much to like about it:-

  • Good area of future technology growth cyber security.
  • Diversified ETF priced in GBP (but mainly invested in US stocks).
  • Performed very well, doubled since 2016, up 20% since the start of 2019.
  • Happy with LGEN as the ETF provider.

Growth investment though and zero dividends, that’s a hard pill for me to swallow. The current mega run in US stocks is going to come to an end at some point, my only real protection against that is my dividend income and reinvesting that. I’m not going to try and time the market or keep a significant sum in cash as I believe that you are doing.

Have added it to my watchlists and might give it a go at some point if I ever run out of dividend paying ideas. Thanks for the input.

ATB

Pref


#2293

Maybe you’d like USDV ?
( SPDR S&P US Dividend Aristocrats UCITS ETF Dis )


#2294

No issues with any Trader Spreadsheet Prev… I am looking in watching maybe been educated

As I said nothing wrong with a little harmless Banter, we all be millionaires this time next year Rodney

Other from that, if Lloyd’s was hitting 90p in 2014

No reason we cannot we see 80p plus in 2020 :slight_smile:

Other from that I am not in any rush selling any investment that’s paying me a 6% annual yield


#2295

Hi @J_Westlock, Took a look at USDV yesterday. I am generally familiar with the dividend aristocrats idea. Yield is very low at ~2% and otherwise looks pretty similar to Vanguard ETF VUSA which I watch but am not invested in. Performed pretty similarly (charts are almost identical).

From my perspective the S&P has pretty much gone out of the stratosphere and into outer space right now, being at extreme all time high. Cant help feel that it can’t go on forever. So I really don’t think it’s a good idea to be investing in anything there ATM. Of course if there is a correction it will take all of the other markets with it. But at least if I stick with some reliable dividend payers I will have some protection. US investments aren’t a great place for dividend investing in my experience (15% withholding tax plus currency charges) plus the possibility of a further recovery in the GBP/USD.

So thanks for the suggestion but I think I’ll continue to steer clear of US investments, for the moment anyway.

ATB

Pref


#2296

You can get that back 100% with ii and some other brokers.

USA dividends are always lower on average, I think divi rates are the one thing that keeps the FTSE going sometimes. (Dominion is still paying a good divi but is c. 12% higher price than when we last discussed them so the yield is still around 4.5%)

Of course, if there is a correction then USDV may become a good divi investment at that point, perhaps one to add to the shopping list for such a time as when that very late big correction comes.


#2297

Hi @Eadwig, We’ve had this conversation before I think ?, yes you can reclaim the US withholding tax in a SIPP but not in an ISA - see article below:

I have a W8BEN in place and recent experience at receiving a US dividend from Brookfield Property REIT.

Nothing I can do about the ~1% currency charge with my broker either, believe me I asked them. Makes for a 16% reduction in yield. I’d still take that on a 6%+ yield investment (makes it a 5%+ investment), but not ATM with a possible 5% negative currency move possible and I feel that I already have enough overseas exposure and don’t want any more right now (in fact I might even pare it back a bit if I could find something UK centric that I was prepared to invest in).

While looking at USDV my eye also fell on VNQ a US Vanguard Property REIT with a good yield, quarterly dividends, invested in a largish number of REITs, SP done pretty well in the last year. Just added it to my watchlist ATM though as not prepared to invest in US anything ATM due to the currency issue and the elevated level of US stocks in general.

ATB

Pref