Buying Shares

[Notafettler]

I'm not sure I'd be investing in insurance companies in light of the enormous impact CV19 is likely to have

How will it impact on Legal and general profits is the question

 

[cisamcgu]

Seriously? Staggering post

I'm not sure if you are saying I have got it wrong (which is very, very possible), or that this is interesting ?

 

[Notafettler]

Can't help with any tips as I've never owned shares in my life. I have considered it numerous times as the potential gains are obviously attractive, but it seems that the market's one big, unsustainable, loaded ponzi scheme where the uneducated little man is mostly going to come off worst at the hands of "professional" traders and trading algorithms.

Having watched the markets for a fair time it seems that a company's productivity is now largely irrelevant to its share price (massive b*llock-droppings notwithstanding of course) with the biggest effect on the markets as a whole being government fiscal policy and the rampant speculation that surrounds it; with everything (IMO) typically being massively over-valued thanks to government money printing.

I think the lastest crashes have really only taken the QE-driven froth off the markets and returned them to what I'd consider a more legit value. The limited sources I've looked at suggest another, shortish-term QE-led rally before a much longer and sustained downturn. So as a short term pump-and-dump exercise it might be worth buying in.

I'm personally less convinced by the long-term argument as I view the whole stock market as a crooked, distasteful and unsustainable mechanism for speculative "professional" spivs to profit off the legitimate productivity of others, while I think we may be nearing the natural end of the current financial system as we know it..

Your views are product of paranoia and a lack bottle when it comes to investing.

 

[Notafettler]

I'm not sure if you are saying I have got it wrong (which is very, very possible), or that this is interesting ?

You haven't got it wrong you have got it very very wrong. But at least you have admitted to the possibility....respect!

 

[vickster]

How will it impact on Legal and general profits is the question

Don’t know, I’ve not got a crystal ball

It was a general observation for the OP, nothing to do with you

 

[Notafettler]

I'm not sure I'd be investing in insurance companies in light of the enormous impact CV19 is likely to have

It what way will the CV19 impact on Legal and General?

 

[vickster]

It what way will the CV19 impact on Legal and General?

I have no idea, you’re the expert surely?
I’ve not found a crystal ball in the last minute or two

 

[cisamcgu]

You haven't got it wrong you have got it very very wrong. But at least you have admitted to the possibility....respect!

Then please enlighten me, since that is how I thought it works with ITs

 

[Notafettler]

Don’t know, I’ve not got a crystal ball

It was a general observation for the OP, nothing to do with you

If you don't know why are you saying don't invest? Which implies you do know. Or think you know. I am allowed to join in the conversation xx

 

[Notafettler]

I have no idea, you’re the expert surely?
I’ve not found a crystal ball in the last minute or two

I have never said I am an expert. I am testing peoples knowledge.

 

[roubaixtuesday]

Note it is easy to pick the bottom of the market, its called the P.U.L. method. You are 100% guaranteed to buy at the bottom if you use it

 

[vickster]

If you don't know why are you saying don't invest? Which implies you do know. Or think you know. I am allowed to join in the conversation xx

In insurance Cos generally? Because they are going to be hit with enormous bills which I expect will not do their business any good - this just comes from an observation. I have no knowledge (I did have a shares ISA until the shoot hit the fan a couple of weeks ago, I've chopped it in before it lost any more and I'll open a new shares ISA on 6 April).

You appear to have more experience than someone like me who has virtually none (I did make a few quid from Royal Mail shares, although probably sold before they hit their peak)

 

[wafter]

Ignoring your ignorance your final statement implies the end of all forms of business and therefore jobs. Anarchy will reign. Therefore money will have no use.
If QE had not taken place we would have entered a depression leading to spiralling deflation, where consumers and businesses wont buy good/invest because they believe the price of the goods will fall further. Which of course it does.
Companies with high productivity have proportionally higher share prices ie Amazon, google etc.
The main complaint about the Conservatives was a lack of fiscal policy. QE is not fiscal policy.
The government is talking about borrowing money not QE although no doubt some of that may take place. Personally I believe this is the time to experiment with helicopter money (aka helicopter drop)a mix of both fiscal and monetary policy (via QE)
PS share prices in the UK were not considered to be high based on average P/E ratios

I don't see my final statement as spelling "an end to all forms of business" at all. The basic concept of trade can exist without the need for a parasitic financial system that allows those who actually produce nothing of tangible value to profit off the backs of those who do. Trade existed long before the concept of shares, the stock market and all the increasingly complex financial derivitives and investment vehicles it's spawned, no?

I don't doubt that relative share prices are affected by productivity, but they're all inflated across the board by speculation underpinned by cheap debt and free government money. QE and low interest rates might be useful short-term tools in a time of crisis, but they appear to be the new normal and an increasingly ineffective method to prop up slowing economies in the prepetual, ridiculous pursuit of infinite growth and un-ending profit.

So instead of deflation we've had rampant asset inflation as the cheap / free money has found it's way into any speculative "investment vehicle" going; pricing people out of the housing market and exacerbating wealth inequality. Who's to say what will come next, but it's clear to many that the global economy is becoming increasingly broken.

My views are the product of unwiliness to buy into a system that I see as inherently corrupt, exploititive, unsustainable and destructive.

 

[Notafettler]

Then please enlighten me, since that is how I thought it works with ITs

An IT owns shares in other companies who pay them dividends. These are then paid out to the investors in the IT. Income biased investment trusts will have a dividend reserve a rainy day fund. So if the average pay out from the company shares they own fall they can continue to increase their dividends. If the share price of the investment trust falls that doesn't mean the companies paying dividends to the IT will reduce there payments to the Investment Trust. Example The investment trust is trading at £1 and is paying a 6p dividend (equal to 6%). The price of the investment Trust falls to 50p if they continue to pay 6p the dividend is now 12% BUT only if you buy it at 50p. If you owned at 100p you have lost 50% of your capital but you are still getting 6p dividend. My aim was to buy at 50p which gets me 6p dividend equal to 12%. And or if the share price recovers I will have a 100% increase in capital. NOTE the latter is an example only.

 

[Notafettler]

Not sure it actually works like that, but I am no expert, and you are, so I will bow to your greater knowledge

Apologies I am not that good at explaining things. In what way dont you think it works that way?