Are You Crazy Enough To Trade Standard Chartered?

I agree with Tony's NOT VERY LONG or short trading which would have been the ticket with Standard Chartered.
Was not brave enough myself.

But what strikes me is Standard Chartered is very much an Asia, Middle Eastern, African play so the common theme here is LOOSING FACE.

A cultural thing which make explain;
"The New York authorities claim Standard Chartered laundered $250 billion. The bank puts the figure at $14 million. There is a world of difference between those two figures."

Thanks Harvey.

The important thing is being able to distinguish between a market over-reaction to a trivial issue (i.e. this incident involving STAN) and a far deeper problem such as the financial crisis which was clearly going to cripple banks like Barclays. Looking at BP chart in 2010 after spill, you can see that the share price fell from around 600p to 300p over about two months and during this period the trading volume was very high, meaning that the down trend was strong. If you bought your BP shares during this period, I seriously advise you to learn something about technical analysis. You could at least have waited until the trading volume fell and everyone who wanted to sell had done so.

QD:

I agree with you about the DFS. But there's more mud to be slung yet, and the whole story has a dangerously unpredictable political edge.

I am holding on to the stock. I think I was fortunate enough to get close to the low price of the recent falls (trade time - 11:33 on Tuesday). I know others are flipping it but I believe the management will sort this out satisfactorily for shareholders. At worse, it may retrace towards the level I bought at but I truly don't think it will even break through £12.50 in this market...it has too many admirers.

What I don't quite understand about your article above is the comparison with BP. Although we clearly do not know what the news-flow will be in the near future (positive or negative), it comes back to risk analysis. With BP, there were deaths on the rig and multiple parties to blame. Here there are no death liabilities, spill liabilities, environmental clean-up liabilities, health issue liabilities - i.e. a whole load of intangibles. With financials, it will be a fine at worst and a rebuke by 'a regulator' but given that this was already known at a Federal level by both the Federal Reserve and the Treasury Dept., and given that neither of these two bodies can even find Goldman Sachs liable (announced today) for prior sub-prime product related contraventions during the financial crisis then I wonder how a minor regulator within the New York district, who has already been publicly rebuked by the 2 Federal organisations previously mentioned, will have their time in the sun on this issue.

"Various attempts to take advantage of the banking crisis to buy Barclays (LSE: BARC), Lloyds Banking (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) on the cheap also cost me a small fortune. I lost at least half the money I invested.

Never again."

For me it comes down to "investor" or "speculator" I know which I am and it looks as if you have made your mind up too!!

Either can work I am sure but having tried both, one should stick to what works for you IMO.

If only I had the spare cash.

And the upside, rub their noses in someone from Yankeeland trying to make a name for him/herself. The hessian holder of cheap goods for the loose lipped git?

It won't last. Sell sell sell!

Is it just me or is everyone a little bit too short-termist these days?! I believe equity investments are for the long-run and not for the day trader, short-term flipper, algo-trader or any other adjective you would like to use to describe these kind of market participants.

All I will say is that 'the noise' will evaporate at some point and longer term perspectives will prevail again. The age of the 'quick buck' will dissipate with the onset of the next proper bull-market as investors will be too afraid to be out of the market rather than in it. Bull markets usually begin at times of low market confidence or periods of crisis (any kind of crisis...from political to economic and the full spectrum inbetween). The market levels we have reached since the end of May / start of June has shown investors how powerful the beginning of an effective bull market can be. There is a lot of institutional cash still sitting on the sidelines waiting for an excuse to buy relatively inexpensive equities. And yes, equities are still relatively inexpensive. I am not talking about valuing equities against a ludicrously low bond yield necessarily, but against historical equity valuations. The recent 'choppiness' in the equity markets over the past 4 years now will serve long term investors very nicely...it is time to keep the rod in the water, sit back in a comfy chair and wait. Constant trading will eradicate even the more significant gains in a portfolio over time (along with the hideous beast which is stamp duty at 0.5%). So gentlemen, now is the time to be rational and to think long-term. Try and imagine yourself looking back on this period in the same way that we look back now at equity prices from the end of 2008 and the beginning of 2009 period. Quality companies such as WEIR at 350p (now 1740p), PFC at 340p (now at 1570p), RDSB at 1350p (now at 2340p), even SSE at 1075p (now at 1320p).

The caveat is banks...we all know what they have been through and we are all afraid that our investments in STAN or BARC will go the same way as Northern Rock, Lehman, Fortis, RBS, Lloyds etc. - but many, many banks will survive, and more than that, actually thrive - YES THRIVE - in the coming years. So what if banks stabilise at low'ish growth rates and similar multiples to where we are now. I think most investors would welcome their return to being solid, dependable companies with solid, reliable dividend payments - it would show victory for us as tax payers an for us as patient investors taking calculated risk.

Granted, some banks will inevitably have more pain to come than others (and I include STAN in that group)...some will revert to what they once were quicker and on a more stable trajectory than others...such is life. There are winners and losers. That is the risk of equity investing but time heals a lot of pain for equity investments so don't let a 300-500 point increase by the FTSE100 since May scare you away from what you know is the right place to be for the long-term. If you are not in it for the long-term then you get what you deserve...I am not ashamed in saying that.

Time will tell and value will inevitably be revealed in due course.

So without sounding flippant what are the major differences between what is happening here and what happened with GSK (running out of drugs), RR (potentially huge liability) or even HSBC (laundering money for drug lords).

Surely it should never feel comfortable buying a bargain share?

QuantumDealer

"Is it just me or is everyone a little bit too short-termist these days?"
You're certainly not alone, but we're probably in a minority, perhaps even among Fools.

My impression is that the market contains substantially more traders, speculators and wannabee millionaires than it does genuine investors.

In one way at least this is to our advantage: the various indices are largely driven by speculators' criteria.
Consequently shares which are thought to be bad for traders, but are in fact good for investors, can be undervalued,.sometimes substantially so.

mrburns:

I don't really get it either. A traditional happy-clappy August perhaps, made goofier by the Olympics razzmatazz and Draghi spiking the punch. Then there's Germany quietly giving a little bit of ground. Equities might be perceived at the moment as a bit of a win-win, since your downside is partially covered by the prospect of further QE.

I would like to believe that it's my core premise of the wall of frightened money parked in sovs finally starting to feel left out of the action. That low-beta dividend blue chips seem to be leading the action might suggest that.

Might just be a kind of "clear the shorts in May, then go away" mentality.

Eeexcellent:

July 2011 FTSE 6ish, Today 5847

I share your concerns. Recently took my NG position off the table (what the hell, it's gone up since, but I was happy to take 18% and I don't fancy the fight with the regulator) so I've got cash to burn and I'm finding it hard to really justify a buy at the moment.

I chart my portfolio against the 100 and it's generally done its intended "inside the margins" job. But I have noticed a clearly visible divergence over the past 4-5 months. I don't know whether this represents a trend change, a seasonal blip or stock-picking genius (unlikely, since I'm about 60% big, blue and boring). I can only hope that as and when the rally which neither of us can quite understand hits a correction, some of the blue-chippiness will stick to the sides of the glass, as it were.

Don't know what to do at the moment for the best. Even my preferred temporary park of corporate bonds is looking iffy. So I'm investing it in patience.

Good luck to you.

duffmanchon
"It won't last. Sell sell sell!."

Nice to see someone with the courage of his convictions.
What's the thinking behind them?

goodlifer:

I'm a cheapskate and I love a good catastrophe! Makes decisions so much easier...

Not convinced about the immediate prospects for the mining sector, though I have been stalking BLT and ANTO for a while.

AZN and AV I already have, and don't feel inclined to double into. They're behaving themselves reasonably well for now. RDSB I also have, but I'm not keen on BP. As my somewhat acid remarks hereabouts would indicate, I'm not in love with management.

As for banking, it's a business I have limited understanding of, so tend to steer clear. For a private investor, it seems like a question of hidden treasure or buried turds.

In my view, technicals indicate a temporary drift upwards, and with the switch of sentiment over a perceived euro backstop (ie finally allowing the ECB to do what it says on the tin) supporting the trend. All boats are rising, which isn't great news for value hounds.

Nope, equity markets are not a good place, IMHO, at the moment for the minority extremists - whether they style themselves "value", "contrarian" or whatever. Forget bulls and bears, sometimes the donkeys take over, and there are a lot of those sturdy beasts out there.

So, to my thinking, what ain't in stays out for now. To refer back to the standfirst of the article, I reckon I'm doing fear at a time of greed. Which actually means that you're right to be fully in for the ride.

Any of your ideas could do well short-term, but are you poised for a nifty exit? Good luck to you, but I prefer my decisions served slow. And I'm not too fussed about having cash on the sidelines, with inflation trending lower.

A momentum attitude would probably agree with you that this is a buyers' market. I'd be more inclined to regard it as a traders' market.

Goodlifer.

No important decisions will be taken while the Olympics are on. In the next month or so we will see if Germany will cough up for the entire euro zone, I can see volatility coming.

The last crisis kicked off after the Beijing Olympics. Could be a coincidence but I can't see much upside from 5840.

And thanks, duffmanchon
"I can see volatility coming."

That's what the experts are always saying, but it never seems to happen.
Let's hope you've got it right at last.

Well, I take the view that central banks have to be seen to make a valiant effort to control inflation, yet nobly, surreptitiously (and conveniently) fail in the task, so that state indebtedness can be attacked from that, less politically sensitive side.

I agree with you that there's a massive backwash of inflation building up in the system. All I meant was that I'm happy to be holding some cash (about 12%) short-term, right now. The tale isn't told yet, there are going to be big bumps in the road and I'd like to be able to take advantage. If I miss out, I miss out.

The long-term story seems inevitably to be one of at least latent inflation, the main issue being how many tricks governments have to continue suppressing bond yields. I reckon investment money will flow and find its own level soon enough, the only issue is perception of risk. The whole point at the moment is a delicate dance about increasing money velocity against a background of declining growth. I wouldn't want the job!

I don't have your mileage, but I can remember fags at around £1 a pack...

A propos Rio, I merely meant that the sector in general (not Rio in particular) is all about massive forward-planning capex and falls more into the growth than income bracket. And though I haven't gone into detail about Rio specifically, I'll bet its divi policy isn't snow-white...

If I'm wrong, I'll meet you at Draghiplatz in Frankfurt sometime and buy you a beer! Or if I can't afford it, you'll have to shell out some DMs...

"I can remember fags at around £1 a pack."
They used to be a bob for twenty.

"I'll bet its divi policy isn't snow-white."
Probably not, but I don't think they've actually been caught doing anything
naughty recently.

Anyway cheers, good luck, rude health!..