Advice for my biggest mistake

cloonty

I know this issue has been discussed before and will be in the future, but i would just like a straight forward answer if possible.
I've little to no experience with shares and took a foolish punt on AIB when they were at €1.49.
I threw in everything i had (€18k) and would just like to know if there is a possibility if it is recoverable in 5 years time or so?
What i mean is have I lost my holding completely as a result of the recapitalisation announced today or not?

Please don't say i told you so. I just want to know if i should write it off as losing all my savings or that it might be there in years to come.

thanks for reading

wobbles-grogan

Of course something might be there in 3-4-5 years to come. The point is you dont know, I dont know and nobody can ever know.

I would say keep them, theyre not going to go down much further.

Going by google, theyre 1.52 today, which isnt bad a loss. I say wait it out, and once they go past €1.70 or €1.80, sell up.

Edit: Oh, and dont put all your savings into a gamble. Thats a more important lesson here...

cloonty

€1.52?? Are you sure you're on about AIB?

wobbles-grogan

http://www.google.co.uk/search?q=AIB&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

1.42 now :-/

turbobaby

wobbles-grogan wrote: »

Going by google, theyre 1.52 today, which isnt bad a loss.

Not sure where you're getting that figure from, but the price of AIB shares is currently €0.48

wobbles-grogan

Wha? Damn it. Cant trust google at all.

Or wolfram...
http://www.wolframalpha.com/input/?i=AIB

oh well....

My advice in this case would be to definatly keep your shares. It cant get much lower so keep them. Thats what i'd do anyway, especially if i wasnt stuck for money right now...

Oh, where do ye get ye'r figures from. I dont have any shares at all so i dunno, might buy some AIB ones now...

Cyrus

cloonty wrote: »

I know this issue has been discussed before and will be in the future, but i would just like a straight forward answer if possible.
I've little to no experience with shares and took a foolish punt on AIB when they were at €1.49.
I threw in everything i had (€18k) and would just like to know if there is a possibility if it is recoverable in 5 years time or so?
What i mean is have I lost my holding completely as a result of the recapitalisation announced today or not?

Please don't say i told you so. I just want to know if i should write it off as losing all my savings or that it might be there in years to come.

thanks for reading

the question is who knows?

are you prepared to risk the remaining value left in them to find out?

had you decided on a point that you were going to sell out at? did you consider your holding at a €1 for example?

cloonty

no point looking at the reasons why i did it now.

just trying to find out if this money is effectively lost for good or not?

brianrcarney

i'd imagine effectively gone as its the governments bank now

cloonty

brianrcarney wrote: »

i'd imagine effectively gone as its the governments bank now

ok but the bank will still be listed it seems though so i would then have a holding?

RoadKillTs

just trying to find out if this money is effectively lost for good or not?

We dont know, sorry.

Open question here.

If the Goverment take full ownership of AIB will they be taken of the market?

cloonty

from what i gather they have not been delisted because of the forthcoming rights issue?

What im saying is i don't really mind if there is a possibility that i can maintain my holding irrespective of there value over the coming years.

Cyrus

cloonty wrote: »

no point looking at the reasons why i did it now.

just trying to find out if this money is effectively lost for good or not?

ive just told you, nobody knows, what im saying is you need to look at this rationally, at the moment you could sell up and recover 25-30% of your initial investment, are you prepared to gamble this money to see if the share recovers, thats the only decision you can make right now.

wobbles-grogan

Cyrus wrote: »

ive just told you, nobody knows, what im saying is you need to look at this rationally, at the moment you could sell up and recover 25-30% of your initial investment, are you prepared to gamble this money to see if the share recovers, thats the only decision you can make right now.

As i pretty much said in my initial post also....

No one can tell what will happen in the future. My guess would be that the price of the shares will go up again, this has to be close to rock bottom. The only way it could get worse is if its taken off the market.

cloonty

Cyrus wrote: »

ive just told you

thanks for the info but take it easy

royaler83

RoadKillTs wrote: »

We dont know, sorry.

Open question here.

If the Goverment take full ownership of AIB will they be taken of the market?

Yes, the same as Anglo.

To the OP, AIB is in a similar position to RBS in the UK, they are 84% state owned and looked doomed two years ago but following restructuring etc they are finding their feet again and may even be in profit again.(not sure)

I would not sell now if I didn't need the money but be prepared to wait a long time before it starts climbing near a pound again.

Its not a loss until you sell!!!

cloonty

royaler83 wrote: »

Yes, the same as Anglo.

To the OP, AIB is in a similar position to RBS in the UK, they are 84% state owned and looked doomed two years ago but following restructuring etc they are finding their feet again and may even be in profit again.(not sure)

I would not sell now if I didn't need the money but be prepared to wait a long time before it starts climbing near a pound again.

Its not a loss until you sell!!!

thanks royaler83. I knew there was constructive answer out there somewhere.
Won't be selling either way so will just have to wait and wait!

Cyrus

cloonty wrote: »

thanks royaler83. I knew there was constructive answer out there somewhere.
Won't be selling either way so will just have to wait and wait!

You arent looking at this rationally though, you were waiting to hear what you wanted to hear.

Ask yourself the question, can you afford to lose the remaining money and are you prepared to gamble it further on aib,

they could well avoid nationalisation and be worth something in 5-10 years time, but equally they could be nationalised in the new year and your remaining money is gone.

you have said that you are not going to sell either way, maybe you have already thought through the above

Idu

cloonty wrote: »

thanks royaler83. I knew there was constructive answer out there somewhere.
Won't be selling either way so will just have to wait and wait!

If you won't be selling either way then what's the point of this thread? Were you just hoping someone would come on and tell you that you were sure to recover your money.

The advice in this thread is beyond awful by the way

Cyrus

Idu wrote: »

If you won't be selling either way then what's the point of this thread? Were you just hoping someone would come on and tell you that you were sure to recover your money.

The advice in this thread is beyond awful by the way

whats wrong with what ive said

Idu

Cyrus wrote: »

whats wrong with what ive said

Nothing. I should have put a "some" at the start of the post

rugbyman

The price coming up on google was prob the USA price. i dont know if there is a direct relationship between the prices.


IDU, you have stated that some of the advice given is awful. I dont know whose advice that is other than it prob did not mean Cyrus s advice.
the question was quite simple , sell or stay?.
You have given your opinion on some of the advice given and think it awful. fair enough. Could you give your opinion of whether the poster should sell or stick?

For my part I dont have an opinion, I just dont know. I think the analogy of the RBS is a good enough one.

regards ,Rugbyman

Barr

Have AIB a rights issue to come ?

pirelli

cloonty wrote: »

ok but the bank will still be listed it seems though so i would then have a holding?

Royal bank of scotland and Loylds gave up a large share to their goverment.
LYG are now back in profit and not a bad investment. AIB should follow suit, i am not sure when the price will recover for you to break even as the goverment will not have a positive effect on share price but AIB has set conditions to ensure it remains investable so maybe this is also good news as AIBneeds capital, to get going.

pranal

wobbles-grogan wrote: »

Wha? Damn it. Cant trust google at all.

Or wolfram...
http://www.wolframalpha.com/input/?i=AIB

oh well....

My advice in this case would be to definatly keep your shares. It cant get much lower so keep them. Thats what i'd do anyway, especially if i wasnt stuck for money right now...

Oh, where do ye get ye'r figures from. I dont have any shares at all so i dunno, might buy some AIB ones now...

hi
the 0.48 you are talking about is listed on ISEQ and the 1.48 is listed on NYSE, nothing wrong with google.

its also listed on London Stock Exchange which has the same price 0.48

AIB shares are listed on three different markets

hope that helps

alanceltic

Not that its gonna be of any benefit to you but you really have to look at how things stand today. The question is would be be prepared to invest in AIB "today" at the current share price, what has happened up to now (including what price you bought at) is immaterial and shouldnt influence your decision too much. Capital gains tax is one reason which could influence your decision but only if you have something to offset the losses against.

If you think there is upside on the share price - hold, if you think there is downward pressure - sell. Its simple really but you wont find a magic answer im afraid.

Arthurdaly

Sounds like you want someone to justify the fact you made a mistake and you are now going to hold the shares regardless of the opinion in here.

The current price has priced in all news available in the public domain (good and bad) and possibly general consensus. Humans will move the price dictated by their actions, buy/sell. How is this share going to pan out? You need to look at the sector/country/gov/institution/. Are you looking for a buy/sell recommendation from a website? Is this not how you ended up in trouble in the first place? Some lad saying the price cant go any lower with no basis for opinion?

delux

Have AIB a rights issue to come ?

I think what happened was that initially a rights issue was planned but when the regulator's people looked over the books they realised the amount of money AIB needed was more than could be realistically raised so instead the govt has to now inject money from the pension reserve fund.

Terrontress

The NYSE price is an ADR which has several shares bundled in to one unit, hence the higher price.

OP, I am holding 1,200 AIB, I had them when they were worth just shy of €25 each.

I'm just holding on in the hope of getting something, someday out of them.

AIB has to sell its Polish, UK and USA interests and this will not be enough to plug the gap. Once AIB is recapitalised it will be a domestic Irish bank and likely to remain so. On top of this, the state's increased holding devalues each share issued.

If the state is in pain for ten years due to the banking crisis consumer finance defaults will increase as will small business. Where is AIB's growth going to come from? Selling finance products to a risky, depressed, saturated market.

In spite of all this, I am not qualified to determine a fair price for AIB so just because things get bad does not mean the price won't increase.

Raskolnikov

Terrontress wrote: »

The NYSE price is an ADR which has several shares bundled in to one unit, hence the higher price.

OP, I am holding 1,200 AIB, I had them when they were worth just shy of €25 each.

I'm just holding on in the hope of getting something, someday out of them.

AIB has to sell its Polish, UK and USA interests and this will not be enough to plug the gap. Once AIB is recapitalised it will be a domestic Irish bank and likely to remain so. On top of this, the state's increased holding devalues each share issued.

If the state is in pain for ten years due to the banking crisis consumer finance defaults will increase as will small business. Where is AIB's growth going to come from? Selling finance products to a risky, depressed, saturated market.

In spite of all this, I am not qualified to determine a fair price for AIB so just because things get bad does not mean the price won't increase.

It's ridiculous that it took nearly 20 posts for someone to point out the difference between a regular share, and an ADR share (not a dig at you, mate). It's also insane that none of you understand the concept of share dilution. A share is a fractional ownership of a business. If the business suddenly issues more shares, your interest in that business is diluted. Also, I just cannot see how AIB can recover when they have to sell over half of the business to try and survive. It's looking like AIB will be reduced to just a Republic of Ireland operation. That Irish operation will lose money this year. It will lose money next year. It will lose money the year after that. I can only see more losses, more recapitalisations and more dilution.

If you ask me, I think a time will come when AIB shares are put into the same bracket as Eircom shares and most people will despise them. Hopefully by the time of capitulation (I want to read this forum and see any member who suggests AIB shares getting run out of the place ). If at that point AIB is cleaned up and the government are offloading their stake, it will be the perfect time to buy. Hopefully I'll get that chance, maybe five years time?

RATM

cloonty wrote: »

no point looking at the reasons why i did it now.

just trying to find out if this money is effectively lost for good or not?

There's every point, maybe not pubically here but at least in your own mind. Reflection on your mistakes and ensuring you don't repeat them is one of the fundamentals of successful investing.

OP you should start an investment diary and this episode should be your first entry. In future refer back to it before making decisions and never put all your eggs in one basket, spread them across at least 10. It might only be 2-3 that make you money but the idea is they'll make enough to offset losses on the other 7-8 picks. If more than that make money then its bonustime.

displaced dub

cloonty wrote: »

I know this issue has been discussed before and will be in the future, but i would just like a straight forward answer if possible.
I've little to no experience with shares and took a foolish punt on AIB when they were at €1.49.
I threw in everything i had (€18k) and would just like to know if there is a possibility if it is recoverable in 5 years time or so?
What i mean is have I lost my holding completely as a result of the recapitalisation announced today or not?

Please don't say i told you so. I just want to know if i should write it off as losing all my savings or that it might be there in years to come.

thanks for reading

Was listening to a broker i think from bloxhams on the business show on Today fm this morning and he was advising clients to sell their AIB shares and re-invest in Either American financials,BP or SKG .

It will be a long long time before they are anyway near 1.49 again.

Comordha

NCB are advising holders to switch from AIB to BOI as an arbitrage play. Still though you can't go too far wrong with Smurfit Kappa or BP from what I can see.

Raskolnikov

Comordha wrote: »

NCB are advising holders to switch from AIB to BOI as an arbitrage play. Still though you can't go too far wrong with Smurfit Kappa or BP from what I can see.

:eek:

Did they actually use the words arbitrage?

Anyone in the financial services industry who recommended Irish bank shares should be sacked and banned from working in the area again.

radioactiveman

What will happen to ordinary shareholders in December if the new share offering is a disaster and the government is forced to buy up the remainder? If they have a 90+% stake in the bank will it then be delisted?

To the OP: If it is delisted I would say sell, but if it survives maybe consider keeping the shares for when you're old and grey:D

Of course you could also invest in something (like an ETF that won't go bust) that pays a good dividend. Over time that will compound if you reinvest them, probably more than AIB will grow over the next few years, which will be a lost period for them I think.
The bank has huge debts and has to pay them off, as well as a huge dividend to the state (=no growth, even if there is a bounce if they get out of the trouble they're in at the moment).

But at some stage far in the future if they survive they will start to rebuild and there could be a big gain in the shares at that stage.
Possibly "people-on-mars" timeframe but it could eventually work out. I wouldn't go so far as to say there are no possibilities for AIB whatsoever.

pocketdooz

Raskolnikov wrote: »

:eek:

Anyone in the financial services industry who recommended Irish bank shares should be sacked and banned from working in the area again.

I couldn't agree more.

The state of the analysts in these brokerage houses in Dublin never fails to astound me.

I was having drinks with one about 3 months ago who covered the packaging and paper industries - he didn't know what EBITDA was. That's like a doctor not knowing how to take a pulse. I couldn't believe it, well actually I could believe, that was the scary thing.

.

spoonface

At the point of buying shares, it's advisable to decide your trigger ('stop loss') point at which you will sell no matter what. So think about that as a way to decide to sell or not. If I had used this method I wouldn't have lost the full 12K on Boundary Capital shares I bought a few years ago. I'd be very happy now if I had 80% of that 12K in cash instead of thinking 'it won't get much worse' all the way to the bottom.

displaced dub

pocketdooz wrote: »

I couldn't agree more.

The state of the analysts in these brokerage houses in Dublin never fails to astound me.

I was having drinks with one about 3 months ago who covered the packaging and paper industries - he didn't know what EBITDA was. That's like a doctor not knowing how to take a pulse. I couldn't believe it, well actually I could believe, that was the scary thing.

.

Is that the same fella who was a 10.00 euro+ price on SKG??

pocketdooz

displaced dub wrote: »

Is that the same fella who was a 10.00 euro+ price on SKG??

DD, I'd rather not say.

.

displaced dub

pocketdooz wrote: »

DD, I'd rather not say.

.

Thats good enough for me so its someone in Davys:D:D:D