Bank of Ireland shares

Timing belt

RaggyDays wrote: »

Banking is the only undervalued sector after 2020, and it's much healthier than it ever was. Money tends to flow out of one sector and into another. A lot of funds are starting to switch away from the frothy Tech stocks where anything with the name "cloud" was selling at sky high valuations.
I like BoI as it is part of a monopoly now, borrow from the ECB for 0.0% lend back out for 3.5% on Mortgages.
For Commercial loans its borrow from the ECB for 0.0% lend back out for anything up to 13%. Plus they are shedding a load of staff and have automated a lot of their banking services.
JP Morgan is another Banking stock to like, they are making a lot of money from retail and commercial banking and have fought back hard against the likes of Square and are now eating away at Squares market.

They have excess deposits that ECB is charging negative rates on. They are required to hold a bond portfolio for liquidity which has a negative yield. There net interest margin including the loans you mention will be less than 2%. Most of their costs are fixed so will struggle to make a profit for the next few years even if there was no bad debt.

JP Morgan is an investment bank unlike BOI so will generate some profit from its fixed income department and investment banking but will struggle like every bank in the current environment as there is a flat yield curve.

RaggyDays

Timing belt wrote: »

They have excess deposits that ECB is charging negative rates on. They are required to hold a bond portfolio for liquidity which has a negative yield. There net interest margin including the loans you mention will be less than 2%. Most of their costs are fixed so will struggle to make a profit for the next few years even if there was no bad debt.

JP Morgan is an investment bank unlike BOI so will generate some profit from its fixed income department and investment banking but will struggle like every bank in the current environment as there is a flat yield curve.

Costs are being forced onto customers, we are already 0.5 to 1% more expensive to borrow than our European neighbours. BoI and others are charging for Cash deposits i.e cash pensions are being hit, retail to follow soon.
ECB provides a tiering system that exempts a large portion of the money parked at the ECB from charges.
Net interest margin is much higher than 2% on Commercial.

Lets wait and see how the results for the quarter pan out, I suspect that some of those investment funds that are getting in early here really know what's happening.

Timing belt

RaggyDays wrote: »

Costs are being forced onto customers, we are already 0.5 to 1% more expensive to borrow than our European neighbours. BoI and others are charging for Cash deposits i.e cash pensions are being hit, retail to follow soon.
ECB provides a tiering system that exempts a large portion of the money parked at the ECB from charges.
Net interest margin is much higher than 2% on Commercial.

Lets wait and see how the results for the quarter pan out, I suspect that some of those investment funds that are getting in early here really know what's happening.

NIM will be less than 2%
Lending volumes down year on year
Cost income ratio shoot up to 80+% (excluding impairments and bad debt provisions...including 160+%)
Customer deposits up 20-30% costing the bank an extra 2-3m due to negative rates.

Without inflation which will generate a yield curve bank will struggle to make a profit and replenish capital used in bad debts for the next 4-5 years.

Let’s see what the results hold that is my prediction.

What ECB tiering are you look at as deposit facility is -50bs. Please explain how you think this works!!

codrulz

I would imagine he's referring to TLTROs.

Timing belt

codrulz wrote: »

I would imagine he's referring to TLTROs.

Maybe but the bank has capacity to lend without availing of TLTROs and I am sure would rather use this capacity rather than parking funds with the ECB in the negative rate environment the issue is finding customers to lend to within the banks risk appetite.

Mad_maxx

Jim2007 wrote: »

No, relative to the definition used by most risk management strategies. Now this is 101 portfolio construction. You want to ignore it that is your business and your money. But putting it out as a normal approach is nonsense.

if you were correct , there would be no institutional demand for publicly listed companies in ireland , there is demand

plenty of companies with market CAP,s of below fifteen billion are worth owning

Jim2007

Mad_maxx wrote: »

if you were correct , there would be no institutional demand for publicly listed companies in ireland , there is demand

plenty of companies with market CAP,s of below fifteen billion are worth owning

But you are not an institution nor are you constructing funds to sell to the general public.


Like I said 101 stuff.

Timing belt

Timing belt wrote: »

NIM will be less than 2%
Lending volumes down year on year
Cost income ratio shoot up to 80+% (excluding impairments and bad debt provisions...including 160+%)
Customer deposits up 20-30% costing the bank an extra 2-3m due to negative rates.

Without inflation which will generate a yield curve bank will struggle to make a profit and replenish capital used in bad debts for the next 4-5 years.

Let’s see what the results hold that is my prediction.

What ECB tiering are you look at as deposit facility is -50bs. Please explain how you think this works!!

I would expect operating profits before impairments to drop from 845m to under 300m for the full year 2020 and once you account for impairments BOI will post a loss for the year. This is already priced in on share price.

Mad_maxx

Jim2007 wrote: »

But you are not an institution nor are you constructing funds to sell to the general public.


Like I said 101 stuff.

So you think only retail own ISEQ stocks ?

Jim2007

Mad_maxx wrote: »

So you think only retail own ISEQ stocks ?

What I think is that you need to spend some actually learning about portfolio construction and risk management. A micro cap is a micro cap no matter where it is traded and it has no business in the portfolio of the majority of people seeking long term wealth accumulation.

Mad_maxx

Jim2007 wrote: »

What I think is that you need to spend some actually learning about portfolio construction and risk management. A micro cap is a micro cap no matter where it is traded and it has no business in the portfolio of the majority of people seeking long term wealth accumulation.

no answer to that one then

Jim2007

Mad_maxx wrote: »

no answer to that one then

You've already had your answers and that is the end of it.

MyStubbleItches

Jim2007 wrote: »

You've already had your answers and that is the end of it.

The high horseman has decided that’s the end of the matter so back into our uneducated peasant boxes we go.

Mad_maxx

Jim2007 wrote: »

You've already had your answers and that is the end of it.

I asked if only retail owns ISEQ listed companies as you claim no fund manager would touch them ?

You then made another speech

Jim2007

MyStubbleItches wrote: »

The high horseman has decided that’s the end of the matter so back into our uneducated peasant boxes we go.

How many different ways do you need to be told that a micro cap is a micro cap no matter where it is traded?

And in any case you are not in the slightest bit interested in the answer, if you were you could easily educate yourself with a simple search or two.

I don’t for a second expect you’ll pay any attention to what I say. My only objective is to ensure that that people interested in learning to invest do not mistake this for something serious.

Mad_maxx

Jim2007 wrote: »

How many different ways do you need to be told that a micro cap is a micro cap no matter where it is traded?

And in any case you are not in the slightest bit interested in the answer, if you were you could easily educate yourself with a simple search or two.

I don’t for a second expect you’ll pay any attention to what I say. My only objective is to ensure that that people interested in learning to invest do not mistake this for something serious.

So owning a profitable " micro cap " like smurfit kappa or kerry is sheer folly?

Unknownability

Mad_maxx wrote: »

So owning a profitable " micro cap " like smurfit kappa or kerry is sheer folly?

Can he please be perma blocked?

MyStubbleItches

Jim2007 wrote: »

How many different ways do you need to be told that a micro cap is a micro cap no matter where it is traded?

And in any case you are not in the slightest bit interested in the answer, if you were you could easily educate yourself with a simple search or two.

I don’t for a second expect you’ll pay any attention to what I say. My only objective is to ensure that that people interested in learning to invest do not mistake this for something serious.

I’m not a contributor to this thread, I’m trying to educate myself before committing money to my future. Having read this forum over the last 12 months or more it’s pretty obvious to me that you should be disregarded. You have nothing to offer in my opinion ( which is worth less than nothing to you, I’m fully aware). I really don’t know why you bother trying to educate us mere mortals when your rightful place is quaffing champagne with your high roller friends overlooking Lake Geneva.

TLDR; would you ever go away and live your bitter existence on your own.

Mad_maxx

Unknownability wrote: »

Can he please be perma blocked?

No , thats not necessary , i just dont understand why owning a small company in a global context is a problem if they have a long and proven history in this country , a company like smurfit kappa or kerry ? , i dont own either by the way , i owned kerry from 2010 to 2015 , it more than doubled , i should have held on to it , i sold smurfit earlier in the year , i invested my mothers money in it for two years until september 2019 , made her twenty grand profit

one would think both were charlatan gold miners or other obscure outfits without a bean in profit to their name

DulchieLaois

Any thoughts why BOI have not shooted for the moon after brexit deal...somebody has mentioned the fund managers been on hold but I don’t buy into they...they lost value in d last week.

What are people opinion for BOi share price in 2021 ? Will they go up or down ?

Jim2007

Mad_maxx wrote: »

No , thats not necessary , i just dont understand why owning a small company in a global context is a problem if they have a long and proven history in this country , a company like smurfit kappa or kerry ? , i dont own either by the way , i owned kerry from 2010 to 2015 , it more than doubled , i should have held on to it , i sold smurfit earlier in the year , i invested my mothers money in it for two years until september 2019 , made her twenty grand profit

one would think both were charlatan gold miners or other obscure outfits without a bean in profit to their name

Do you actually have an investing objective or put any thought into how you might set about achieving it? If you have not, then of course it is not a problem stuff your portfolio with a bunch of micro caps, if you have then it potentially represents a a serious challenge to achieving your objective.


The people I have dealt with have, the most common being early retirement and most of them achieved it, because they followed the obvious route - a solid plod along a well worn track. You build a portfolio of medium to low risk stocks, that's big/mid caps and aim to generate an annualized return of around 12% - 14% and you'll do very nicely, if fact you'll turn 50k into about 800k over 20 years, if you're willing to make the effort.


Everyone has the same choice - the exciting high risk world of trading, with a poor chance of success or the solid plod.... the problem is it's a one of decision, you won't know the potential outcome until it is too late to correct.

Jim2007

MyStubbleItches wrote: »

I’m not a contributor to this thread, I’m trying to educate myself before committing money to my future. Having read this forum over the last 12 months or more it’s pretty obvious to me that you should be disregarded. You have nothing to offer in my opinion ( which is worth less than nothing to you, I’m fully aware). I really don’t know why you bother trying to educate us mere mortals when your rightful place is quaffing champagne with your high roller friends overlooking Lake Geneva.

TLDR; would you ever go away and live your bitter existence on your own.

I'm not trying to educate you, but I was hoping that if you have been reading this forum for 12 months, you'd have at least been prompted to dig out one of the many lists of recommend texts and put the time into educating yourself.

roosterman71

Jim2007 wrote: »

You build a portfolio of medium to low risk stocks, that's big/mid caps and aim to generate an annualized return of around 12% - 14% and you'll do very nicely, if fact you'll turn 50k into about 800k over 20 years, if you're willing to make the effort.

Jim, would you mind explaining how 50k becomes 800k over 20 years? I can't get my head around it. Like if I put in 50k now into big companies or ETFs or whatever, how does it get to 800?

Mad_maxx

DulchieLaois wrote: »

Any thoughts why BOI have not shooted for the moon after brexit deal...somebody has mentioned the fund managers been on hold but I don’t buy into they...they lost value in d last week.

What are people opinion for BOi share price in 2021 ? Will they go up or down ?

SP was already baked in

" sell the news "

Mad_maxx

Jim2007 wrote: »

Do you actually have an investing objective or put any thought into how you might set about achieving it? If you have not, then of course it is not a problem stuff your portfolio with a bunch of micro caps, if you have then it potentially represents a a serious challenge to achieving your objective.


The people I have dealt with have, the most common being early retirement and most of them achieved it, because they followed the obvious route - a solid plod along a well worn track. You build a portfolio of medium to low risk stocks, that's big/mid caps and aim to generate an annualized return of around 12% - 14% and you'll do very nicely, if fact you'll turn 50k into about 800k over 20 years, if you're willing to make the effort.


Everyone has the same choice - the exciting high risk world of trading, with a poor chance of success or the solid plod.... the problem is it's a one of decision, you won't know the potential outcome until it is too late to correct.

i still have not been told why successful irish companies like Kerry or Smurfit Kappa are taboo ?

cute geoge

Could you tell us some of them 12 -14% annual return or at least where to find them easy .I listened to you early last year and kept away from Bank of I . when it was dropping like a stone and fair dues for your correct analysis .But when B. of I. hit rock bottom at E1.40 -1.50 you surely knew it was worth a gamble!

cute geoge

cute geoge wrote: »

.... when B. of I. hit rock bottom at E1.40 -1.50 you surely knew it was worth a gamble!

But it was if course a gamble.

50k invested with a net yield of 14% will yield almost 800k after 20 years.

I dunno what Jim's particular strategy is but s&p500 dividend paying etf that pay 6% aren't too hard to find... . 8 to 10% growth per annum over two decades is not what hasnt been seen in the past.

S&P500 is 2.5 times what it was 20 years ago.....

There are loads of micro stocks that have performed wonderfully... Naming them is easy, they are still microstocks and most folk would consider them higher risk than necessary for a long term investment with normal expectations.

Accumulating etf can be expected to yield 14%

Jim is correct, I've a wad of my pension in 4D pharma and I hope it works out well for me but it's lunacy really.

Mad_maxx

Mad_maxx wrote: »

i still have not been told why successful irish companies like Kerry or Smurfit Kappa are taboo ?

They aren't taboo but anyone will advise that anything beyond a tiny percentage of your portfolio invested there is gambling rather than investment in comparison to investing is a large cap diversified portfolio of stocks.

We all know this

cute geoge

how many stocks for a diversed portfolio ,would you be talking 30 or more at about 3% each .Currently have
B. of I
fbd
Ryanair
kerry
greencore
vodafone
c&c
united drug
glanbia
some are worth a few thousand where a few would be considerably more .What other stock are worth adding at the moment

cute geoge

cute geoge wrote: »

how many stocks for a diversed portfolio ,would you be talking 30 or more at about 3% each .Currently have
..........

What are your investment aims?

Diversification is subjective but I'd not class 30 stocks as great diversification...... Because it's all stocks.... No bonds... No cash...no commodities. ... Bla bla bla.

Anyone after true diversification shouldn't really be picking their stocks IMO... ETFs & indexes offer diversification.