Panic Merchants

[Guest Fast_Action]

Yeah that last 5 minutes will make up for the 900p + its down already

I think this is a crazy investment unless you're strategy is high risk, with of course high expected return.

The FT the other day thought this could go as low 180p. I'd estimate the shares (if the panic subsides) will be worth anything in the region of £2-£5, but a huge gamble. I hope that £75k isn't your life savings.

BTW, is there a reason you want them to fall further? Are you hoping to buy more?

I disagree - I don't think it is a crazy investment at all. If the panic continues, they will be taken over. It is a long term investment.

To answer your last question, yes. If they fall below £2.25, then another 15-25k is going in. We agreed 50k this morning if they fell to £3, but I guess that I will be taking home 24 red roses instead of 12. Fear not mate, she'll be sweet.

[Guest Fast_Action]

Correct.

I have this morning registered with RBS' online sharedealing scheme, but I have not yet had my confirmation email through so I can pile a few hundred into these babies (sadly I don't have the cash reserves of FA either ).

And right now, FA no longer has the cash reserves of FA.

Still positive though.

[AndyBud]

Well it isn't really.

Either the shares will recover of their own accord or there will be a hostile takeover. Either way, you can't lose.

The shares won't necessarily recover of their own accord if there is a continuation of people moving their business away from NRK. Agreed their could be a takeover, but it could also as likely be a firesale of the company and its assets at a very low price.

This is high risk (and high expected return) - I'm not saying it won't pay off, and I hope it does for those investing but its a gamble similar to spread betting on the markets in terms of risk.

[Gaz]

I disagree - I don't think it is a crazy investment at all. If the panic continues, they will be taken over. It is a long term investment.

To answer your last question, yes. If they fall below £2.25, then another 15-25k is going in. We agreed 50k this morning if they fell to £3, but I guess that I will be taking home 24 red roses instead of 12. Fear not mate, she'll be sweet.

My auntie has a room for rent, let me know

[AndyBud]

I disagree - I don't think it is a crazy investment at all. If the panic continues, they will be taken over. It is a long term investment.

To answer your last question, yes. If they fall below £2.25, then another 15-25k is going in. We agreed 50k this morning if they fell to £3, but I guess that I will be taking home 24 red roses instead of 12. Fear not mate, she'll be sweet.

Hope she is sweet, and I hope it comes off for you. I just disagree that this is easy money as stated so far on this thread.

[Guest Fast_Action]

The shares won't necessarily recover of their own accord if there is a continuation of people moving their business away from NRK. Agreed their could be a takeover, but it could also as likely be a firesale of the company and its assets at a very low price.

This is high risk (and high expected return) - I'm not saying it won't pay off, and I hope it does for those investing but its a gamble similar to spread betting on the markets in terms of risk.

Stone me! You are cautious are you not?

If you take time to look at both the assets and liabilities of the company, and couple that with the fact that it is still solvent, and that people have totally misunderstood the situation in which NR finds itself - hence the wholesale panic, I doubt that there will be a firesale. Their mortgage business alone makes them ripe for a hostile bid.

A bit of me hopes that that does not happen, as I have not found them to be bad guys within the financial services industry. If the shares do recover, it will take a long time - and that's fine. If there is a hostile bid, then those of us who have invested will make a killing.

The behaviour of the panic merchants makes this whole scenario look like one from a Tom Sharpe novel. People really have lost the head here. The people that I pity most are the branch staff having to deal with these muppets.

Go on Andy, stick your toe in - you know it makes sense.

[joozy]

Hope she is sweet, and I hope it comes off for you. I just disagree that this is easy money as stated so far on this thread.

Spot on.

I definitely would not be putting in any money into Northern Rock at the moment. The situation's still way to murky - plenty of downside still in this one.

[H_B]

Their mortgage book ensures the value as an entity.

[AndyBud]

Stone me! You are cautious are you not?

If you take time to look at both the assets and liabilities of the company, and couple that with the fact that it is still solvent, and that people have totally misunderstood the situation in which NR finds itself - hence the wholesale panic, I doubt that there will be a firesale. Their mortgage business alone makes them ripe for a hostile bid.

A bit of me hopes that that does not happen, as I have not found them to be bad guys within the financial services industry. If the shares do recover, it will take a long time - and that's fine. If there is a hostile bid, then those of us who have invested will make a killing.

The behaviour of the panic merchants makes this whole scenario look like one from a Tom Sharpe novel. People really have lost the head here. The people that I pity most are the branch staff having to deal with these muppets.

Go on Andy, stick your toe in - you know it makes sense.

Have you been to the gambling forum? Cautious?

I just disagree that this is a low risk venture, "easy money" venture. I think there is a risk akin to spread betting on the markets associated with this "investment". That doesn't mean people shouldn't invest if they want to.

Whether people have misunderstood the situation or not, there is still a mass withdrawal of business from NRK.

They are also a company whose whole strategy was based on the interbank money lending system, which has in recent weeks not been as easy to access, due to the issues in the US.

Their mortgage business is mainy in the high risk market (bad credit history, high LTV etc).

That to me says high risk with investing in the company.

[Guest Fast_Action]

Their mortgage book ensures the value as an entity.

Correct. That is my part of thinking behind buying these shares.

[H_B]

Their mortgage business is mainy in the high risk market (bad credit history, high LTV etc).

High risk in the UK market is completely different from the American situation.

You still have to have a reasonable credit rating here to get a mortgage from a company like NR, and UK requirements around provign salary etc are pretty stringent in comparison.

[AndyBud]

High risk in the UK market is completely different from the American situation.

You still have to have a reasonable credit rating here to get a mortgage from a company like NR, and UK requirements around provign salary etc are pretty stringent in comparison.

I never compared it to the US market....Least I don't think I did

Doesn't really matter either way. People default on loans. NR have a loan book which has a higher risk of this happening, due to the type of loans and those who take them.

As I say I hope it works out. To make this out to be an easy money investment is wrong, particularly as some posters seem to have taken notice and want to invest on the basis of the P&B General Nonsense forum.

[Guest Fast_Action]

As I say I hope it works out. To make this out to be an easy money investment is wrong, particularly as some posters seem to have taken notice and want to invest on the basis of the P&B General Nonsense forum.

Think you are going a wee bit mad there Ted!

[AndyBud]

Think you are going a wee bit mad there Ted!

Didn't someone earlier in the thread say they might take money out of an ISA to invest in these shares? You'd have been as well taking it out yesterday and putting it on Dundee Utd - less risk and high return

[H_B]

Doesn't really matter either way. People default on loans. NR have a loan book which has a higher risk of this happening, due to the type of loans and those who take them.

But they have the same mortgage book they have had for several successful decades. It is no less secure now than it has been at any point.

Subprime in the UK isn't particularly subprime.

It is the American shambles of a mortgage market which involved lending money to any hobo on the street, packaged up as attractive bonds and sold on, which has led to scare stories about high risk subprime investments.

[Guest Fast_Action]

Didn't someone earlier in the thread say they might take money out of an ISA to invest in these shares? You'd have been as well taking it out yesterday and putting it on Dundee Utd - less risk and high return

This is adding some excitement to an otherwise dull afternoon for me. Floating about at 279 right now. Doubt I will get my wish of less than 225.

And I would never bet money on a football team as I never gamble. Never even done a coupon.

[H Wragg]

I never gamble.

[Guest Fast_Action]

This is adding some excitement to an otherwise dull afternoon for me. Floating about at 279 right now. Doubt I will get my wish of less than 225.

And I would never bet money on a football team as I never gamble. Never even done a coupon.

Straight up. I have never done a coupon. Would not know how to.

[AndyBud]

But they have the same mortgage book they have had for several successful decades. It is no less secure now than it has been at any point.

In the 6 month we'll see the first of low fixed term, high LTV buyers (taken advantage of the low rates we've had for the last few years) who will be forced to renew their mortages at a higher rate - this is a major risk for NR due to their loan book. I would say it currently is less secure than its been.

[H_B]

In the 6 month we'll see the first of low fixed term, high LTV buyers (taken advantage of the low rates we've had for the last few years) who will be forced to renew their mortages at a higher rate - this is a major risk for NR due to their loan book. I would say it currently is less secure than its been.

Fair point.