The reason banks are worth investing in
- Thread starter Ken
- Start date
Okay,
I took some time out and looked at historical Charts. Stocks with the least amount of ups and downs over the journey. The stocks for the bigger picture. Since the beginning of life for all of the stocks.
I choose the banks, and they are all pretty similar. No matter what point you bought into a bank the downside across the big 4 was limited as far as the big picture goes. A guess economic conditions were different back then. 1987 saw the Westpac bank lose 50% of their value. It has not all been smooth sailing.
$10,000 invested in WBC in 1981 - would be worth $130,000 + dividends
$10,000 invested in CBA in 1991 - would be worth $110,000 + dividends
$10,000 invested in NAB in 1991 - would be worth $76,000 + dividends
$10,000 invested in ANZ in 1983 - would be worth $140,000 +dividends
Now Inflation obviously takes a fair chunk away from the value, but you could say dividends cover that.
So NAB has been the worst performing bank, and Commonwealth Bank the best in terms of shareholder returns.
Compare this to BHP, which the mining boom has attributed to, and we have the following
$10,000 invested in BHP in 1993 - would be worth $102,875 + dividends
I put charts of MYO and PDN up there. Interesting very similar... in the way MYO rocketing, same feelings towards technology towards Uranium??? Just a comparison that came to mind.
Fosters returns have been acceptable - but far below the banks
$10,000 into FGL in 1991 - would now be worth $40,000 + dividends.
Coates hire illustrates the nature of the business. Being Cyclical. I think BOOM Logistics is going through the same Phase COA did.
ARGO investments is as steady as he mother ship -
$10,000 into ARG in 1991 - would be worth $40,000 + dividends ( but note the chart is heading north at a stepper rate than the banks. So unless the economy stops growing ARG are guaranteed returns you would think.
Just some interesting charts. Most people would have sold out of COA, PDN, MYO, at some stage due to the fear factor.
BHP the mining boom obviously speaks for itself.
My thinking is the Rich Get Richer. The more money the banks have, the morey they are going to make....
I took some time out and looked at historical Charts. Stocks with the least amount of ups and downs over the journey. The stocks for the bigger picture. Since the beginning of life for all of the stocks.
I choose the banks, and they are all pretty similar. No matter what point you bought into a bank the downside across the big 4 was limited as far as the big picture goes. A guess economic conditions were different back then. 1987 saw the Westpac bank lose 50% of their value. It has not all been smooth sailing.
$10,000 invested in WBC in 1981 - would be worth $130,000 + dividends
$10,000 invested in CBA in 1991 - would be worth $110,000 + dividends
$10,000 invested in NAB in 1991 - would be worth $76,000 + dividends
$10,000 invested in ANZ in 1983 - would be worth $140,000 +dividends
Now Inflation obviously takes a fair chunk away from the value, but you could say dividends cover that.
So NAB has been the worst performing bank, and Commonwealth Bank the best in terms of shareholder returns.
Compare this to BHP, which the mining boom has attributed to, and we have the following
$10,000 invested in BHP in 1993 - would be worth $102,875 + dividends
I put charts of MYO and PDN up there. Interesting very similar... in the way MYO rocketing, same feelings towards technology towards Uranium??? Just a comparison that came to mind.
Fosters returns have been acceptable - but far below the banks
$10,000 into FGL in 1991 - would now be worth $40,000 + dividends.
Coates hire illustrates the nature of the business. Being Cyclical. I think BOOM Logistics is going through the same Phase COA did.
ARGO investments is as steady as he mother ship -
$10,000 into ARG in 1991 - would be worth $40,000 + dividends ( but note the chart is heading north at a stepper rate than the banks. So unless the economy stops growing ARG are guaranteed returns you would think.
Just some interesting charts. Most people would have sold out of COA, PDN, MYO, at some stage due to the fear factor.
BHP the mining boom obviously speaks for itself.
My thinking is the Rich Get Richer. The more money the banks have, the morey they are going to make....
theasxgorilla
Problem solved... next bubble.
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And the more they make the more fees they have to dream up so they can make even more next year.
Yeah the fees are absolutley rubbish.
The volatility in the market means more brokerage fees also.
For some reason I think NAB potentially could be powerhouse, once management gets it all right.
I think Westpac need to spin off BT financial group as a stand alone company.
I don't know much about CommonWealth bank or ANZ.
The volatility in the market means more brokerage fees also.
For some reason I think NAB potentially could be powerhouse, once management gets it all right.
I think Westpac need to spin off BT financial group as a stand alone company.
I don't know much about CommonWealth bank or ANZ.
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Don't understand why you think NAB. are you saying there will only be one bank in Australia?
I personally feel NAB have the worse service record and fees. And as to getting mangement right ;-(
I personally feel NAB have the worse service record and fees. And as to getting mangement right ;-(
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Depends if you're a shareholder or not
Also, historically (prior to the lending regulatory changes of the 1980s) home lenders were slugged extra margins so the rest of us could enjoy the banking operations (savings accounts) running at a loss. Even today some savings products (student & pensioner accounts) run at a loss. If you think personal clients get slugged hard, have a look at the business banking fees of the major banks
Of course, now we have the opposite fee situation - fixed rate loans often running as a loss leader to other areas of the business, to try & build a relationship that is difficult for customers to break, so the banks can cross sell profitable business to their existing clients. The charts posted above suggest they know what they are doing.
i thinik NAB has the worst reputation out of the banks due to its management history. Thus i think if they can get it right and put the profits on the board they have a lot to acheive share price wise.
they have underperformed the other major banks since listing.
there's why you can't invest in all 4 banks.
As a long term investment, you can't argue with the facts.
They will get hit hard with interest rate rises comig this week possibily, so could opportunities to pick some up at a lower price, thus increasing the yield %.
There are stocks out there that are hot now, but in 5-10 years will they still be trading at the same levels. At some point investors would have to take profits due to stocks being cyclical.
banks have proven over a period of time that they are worthy investments due to increasing shareprice and increasing dividend.
Everything has it's price.
they have underperformed the other major banks since listing.
there's why you can't invest in all 4 banks.
As a long term investment, you can't argue with the facts.
They will get hit hard with interest rate rises comig this week possibily, so could opportunities to pick some up at a lower price, thus increasing the yield %.
There are stocks out there that are hot now, but in 5-10 years will they still be trading at the same levels. At some point investors would have to take profits due to stocks being cyclical.
banks have proven over a period of time that they are worthy investments due to increasing shareprice and increasing dividend.
Everything has it's price.
I've found CBA to be the worst - crappy ex-state bank with outdated systems and processes that are only now getting a seeing to ten years after they should have done.
ANZ has been widely reported (and it's pretty obvious by the amount of new products they churn out!) as being the bank that can adapt its product range the quickest owing to the investment its placed in technology - well before the other big 3. They got a big write up in the AFR's MIS magazine earlier this year which is a worthy read if you have access to Factiva or some other AFR archive. Very lean & efficient.
Offshore, RBS is exactly the same - I've even worked on some of their in-house projects.
ANZ has been widely reported (and it's pretty obvious by the amount of new products they churn out!) as being the bank that can adapt its product range the quickest owing to the investment its placed in technology - well before the other big 3. They got a big write up in the AFR's MIS magazine earlier this year which is a worthy read if you have access to Factiva or some other AFR archive. Very lean & efficient.
Offshore, RBS is exactly the same - I've even worked on some of their in-house projects.
Seems to me a Company should strike a balance between their staff, customers and share holders. The banks seemed to lead with the unfortunate idea that the CEO's pay package should be bloated according to the gain in the companies share price. Hence they screwed the staff then the customers all for the short term benefit of share holders.
I wonder what the banks' share price would be if the CEO's remuneration was based on customer satisfaction?
I wonder what the banks' share price would be if the CEO's remuneration was based on customer satisfaction?
I don't really care for which bank serves customers the best.
As an investor returns are all I am after.
I am sure MBL would have pulled some nasty deals over its time but do you complain when the dividend cheque comes in, and the 20% growth for the last 5 years?
With interest rates going up it will be interesting to see the effect in 12 months.
I dont like to predict share prices but I am taking an uneducated guess that the banks will be somewhere around these prices
CBA - $70
WBC - $32
ANZ - $34
NAB - $46
Just a guess.... not ramping, as you can hardly ramp a bank.
12 months is a long time... will see.
As an investor returns are all I am after.
I am sure MBL would have pulled some nasty deals over its time but do you complain when the dividend cheque comes in, and the 20% growth for the last 5 years?
With interest rates going up it will be interesting to see the effect in 12 months.
I dont like to predict share prices but I am taking an uneducated guess that the banks will be somewhere around these prices
CBA - $70
WBC - $32
ANZ - $34
NAB - $46
Just a guess.... not ramping, as you can hardly ramp a bank.
12 months is a long time... will see.
theasxgorilla
Problem solved... next bubble.
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Surely you have some basis though Ken...please tell me these aren't just your Tattslotto numbers?
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