Since the crash of the bank’s shares, I have now recovered my loss and pondering on the idea of selling up and staying away from the banks. We all know that technically the price is good to buy for a long term. But with all the hassles and issues the global financials are having, is it a good time to bail out now.
My concern is what will happen to the price once the government sell up? Will the market be so flooded with shares that the price will fall? Will it be a good or bad thing for those of us who are still breaking even?

I have only been trading for just over a year and I have done ok to date. But I have no knowledge as to what will happen when they sell as this kind of market is new ground to all traders.

Any tips from anyone? What are your plans if you currently have shares in the big UK Banks?

Cheers All

Cockney Dave

Thank you for the reply Joe. Excellent input

Cheers

No probs Dave :)

Graham hi- I think that Daniels genuinely believed that over time the combinationof HBOS and Lloyds would make a great deal of sense and even knowing what he does now he probably still believes that to be the case. There is little doubt in my mind that Lloyds mgt were bounced into a deal by Gordo. Realistically and imo none of the other banks were probably in a position to take the inevitable hit that would result. Standard Chartered were too busy bleating that they had not been reckless like all their peers and should not be forced into taking any medicine. In fact they did what they could to ensure that Lloyds and RBS would be penalised as heavily as possible for having to be ' bailed out' They saw an opportunity to nobble the competition and used their New labour connections to do just that. HBOS was too big to fail and letting it go to the wall would realistically not have been option - Lloyds took one for the team but that said Lloyds mgt seems to be well aware that they owe the shareholders a lot and will do what they can to give them an excellent return. Within the next couple of years I see share buy-backs and the restoration of the divi and I'll be very happy to take your two quid.

I am interested in this discussion as a long term investor and not a specular.

The spectacular falls in bank shares indicated a widespread failure of professional managers, accountants, and auditors to report on the true financial position of the business they reported on. The main banks had issued rights issue prospectuses to support share prices far above the post crash levels.

In most occupations failure to perform as expected will result in demotion or loss of employment. Can the financial professionals claim to have carried out their duties properly?

The fact that we appear to be hearing less and less from luminaries such as Roubini, Rogers and Farber suggest to me that the double dippers are being rounded up and put back into the asylum. QE has undoubtedly primed the pump and even if it is fazed out gradually I dont feel that we are heading back towrads the edge of the abyss. Talking about abyss wrt to the banks in particular I feel that the action that was taken was spot on to put an end to the media-whipped hysteria that followed the demise of Northern Rock. it was BBC's sensationalist coverage of the first run on a bank sinec the 1930's that set the ball rolling. Sure US investment banks sold the odd piece of subprime trash bundled in with good quality stuff, bought a great investment rating for it from the agencies and got their hedgie mates to short the very same stuff. It was the panic being spread by the media including our own FT and the BBC as well as CNBC that every asset held by the banks was worthless that led to implosion of confidence, surge of mistrust, and collapse of liquidity. The UK rescue package and TARP succeeded in halting the slide. Most of the US banks have already repayed TARP money and others are set to follow suggesting a return to normality across the pond, add to this the mid election results and I too feel that we are on the way up in the US and would not be surprised to the US be the first to begin tightening seeing a further pick up in the Dollar so we may well see some of the speculative money come out commodities and hence a drop in the rate of inflation - ie a Goldilocks recovery. On the back of this asset prices will continue to recoever as confidence returns enabling our main banks to continue to write back property values on the balance sheet and ultimately repay the State. Osborne et al will realise that bank bashing is counter productive, capital ratios are becoming too high and over regulation will choke global competiveness. The penyy will drop that our two partly State - owned banks at current price levels offer an investment opportunity of a life time. Best of all they are ISA able a tax free capital gain and a tax-free dividend flow.

Hi J

What I meant by that is that you can have these shares in an ISA. Any gain will therefore be tax free. I have put all my various ISA's under one roof so that I can buy and sell shares myself rather than pay a fund manager to do it for me. The costs compare favourable and of course you have an opportunity to be a little more creative than some of the players out there. If you take you allowance the gains could be very reasonable indeed. I read an article the other day that there are some ISA 's that have already topped the £1m mark! Stick some of that in good quality high dividend paying stocks such as RSA for example you have income and capital appreaceation. Longer term I am of the opinion that Lloyds and RBS will get back to paying a dividend so I am looking for high capital growth short term and income later. FWIW I have my self invested ISA's with RBS and have found them very professionel to deal with. Of course these are just my own personal points of view so please bounce any ideas off a "professional advisor " before doing anything. Hope this helps . cheers and gl