NAB - National Australia Bank

[JetDollars]

All,

What's up with the NAB yesterday? After the CEO announement................

Where NAB go from here?

Your comments, please?

[Joe Blow]

Seems to be finding some support at $28.50 today.

I wonder how much lower it will go.

[Baloo]

They paid me a fully franked dividend that yielded 6% yesterday.

I'm not really concerned about the stocks price if they keep paying those sorts of dividends.

[Joe Blow]

I suspect we're going to see NAB under $28 next week. The dive this week as been steep and on heavy volume so I can't see it bouncing back for a little while yet.

I think a lot of people are going to be looking for better returns elsewhere, although I think that NAB is good value at under $28. I think we're probably going to see NAB trade sideways for a while before it gets any real upward momentum.

[JetDollars]

I just read the newspaper and there are several financial analysis believe that NAB will be heading south toward $26. But that's newspaper analysis view point.....Maybe a hold off from NAB for a while would be a good idea.

I sold NAB yesterday in my ASX Game....looking for opportunity else where.

[Joe Blow]

I just read the newspaper and there are several financial analysis believe that NAB will be heading south toward $26. But that's newspaper analysis view point.....Maybe a hold off from NAB for a while would be a good idea.

I sold NAB yesterday in my ASX Game....looking for opportunity else where.

NAB is continuing it's plunge this morning. It's 10 minutes after the open and NAB is off almost 1% at $28.08.

This one is definitely going much lower.

[stefan]

In my view, NAB should go down a lot more from $28. Still holding it today, but I'm not very optimistic. Once this baby drops another $1, we may see some heavy buying activity. May be well worth a bit of a gamble but I thing it's just a bit too early at these levels.

We shall see... Certainly a solid banking stock but it was a bit over priced and every bit of bad news will take it down further while it takes a lot of good news to move it back up into the very high 20s.

[JetDollars]

yes I can see that NAB is heading down south again. If it close below $28.00 then my guess would be continue heading down south toward $27.00 or maybe lower.

It's quite interesting to watch this stock direction.

[Joe Blow]

yes I can see that NAB is heading down south again. If it close below $28.00 then my guess would be continue heading down south toward $27.00 or maybe lower.

It's quite interesting to watch this stock direction.

NAB is being pummelled again this morning. Down 1.5% to $27.58.

Where will it find support?

I'm predicting it will bounce back a bit before it hits $27, probably when instos with a long term view come in and snap up the stock.

[stefan]

If the market takes another dive tomorrow, NAB could finally drop to $27. I'd see it more in the 25-26 area before it finds a bottom, only based on the lack of good news and the fact that it was overpriced for a long time. Interesting to watch. It would appear that investors are scared that more bad news are burried under all this mess.

[JetDollars]

NAB close at $27.48. Look like NAB keep going down until $27.00 and hopefully bounce back.

[SuperTed]

NAB has normally bounced off its yeild rate, with that support level around 28.50

The problem now is that yeild was suppossed to hold it up, because Stewart guarenteed the dividend.

The key to Stewart guarantee's is that he didnt stipulate it to carry passed the next dividend date (so the great yeild may not be there after Novembers payout).

I have based that NAB will fall around 15% based on Stewarts earnings comment (10-15% down). So around 26.50 should be bottom.

The sale of Irish bank may cause a kick in share price (and NABS bottom line) but until the Aussie side is fixed then it has to stay down. Kinda similar to AMPs ecept NAB cant sell itself and move to Ireland ;D ;D

At the end of the day its been a fundamental issue that has caused the fall so IMO using technical indicators is like most analysts guessing ;-)

Well that was a long one for my first post ;-)

[JetDollars]

Well NAB has bounce back today, it's quite interesting to see where NAB will close today....keep watching.

[GreatPig]

A relevant SMH article:

http://smh.com.au/articles/2004/07/21/1090089201421.html

"Investment houses shun bank stocks
July 21, 2004 - 1:39PM

Investment houses are putting the red pencil through banking stocks as the reverberations of last week's National Australia Bank profit downgrade continue to be felt."

GP

[stefan]

Finally testing $27. That's going to be a very interesting day.

[Joe Blow]

Finally testing $27. That's going to be a very interesting day.

It really is flirting with that $27 level at the moment isn't it... will it finish above or below it I wonder?

I'm betting below.

[profithunter]

Me too

I'm hoping for a big friday arvo sell off. ;)

[Joe Blow]

In my view, if you can get NAB at $26.50 you are laughing if you have a long term outlook.

It hasn't been this price since October 2001 (fallout from Sept 11)... and before that October 2000.

[stefan]

Joe, I agree. It's coming to levels not seen for a long time and I'm sure we will see a big bounce soon enough. 26.5-26.7 is a bargain level at this stage and if I had the money to enter big time, I would do so. It could easily turn into a 3-4 dollar gain once we see it back on track.

[JetDollars]

Stefan,

I agreed with you that NAB is a bargain, but the question is how low can NAB go before it bounce back.

I am planning the buy this stock, but since I am new to the game I am quite nervous because at this stage the stock does not provide any support line whatsoever.

I will sit tie and watch it where it will be heading next week.

The only support is at $23.87 (20/09/01), but I don't think NAB will go down that far.

[stefan]

Jet,
Welcome to the game... ;-)
If only we all knew when a stock reaches its bottom. Now consider this:

- Do you plan to buy this stock for a quick profit or do you actually buy it because you belive that it is good value and will return to higher levels within the amount of time that you are planning to hold it?

If you are clear about what you want from a stock, then you don't have to know if it's going further down or up on Monday. You can make your decision based on your principles.

EG: You are looking for a good investment to hold for a long term. Maybe you are looking for a stock to add to your permanent portfolio? In this case NAB is a buy. If it goes down another 50 cents on Monday is not really of your concern. You know that you bought it at a good price, below the market value. It will reward you with a nice gain. Not next week but on the long run.

Looking for a quick money riser? NAB is not going to do it for you. It may bounce back next week, maybe even $1 but that would hardly provide you with enough profit to make it worth while.

Think about what you want from your investment before you try to buy something.

Not trying to teach you. Just thought I'd give you an idea.

Cheers

Stefan

[JetDollars]

Replied in blue

rd=1;num=1089844635;start=15#23 date=07/23/04 at 20:06:05]Jet,
Welcome to the game... ;-)
Thank you for your welcome
If only we all knew when a stock reaches its bottom.
I agreed that no one will know when a stock reach it bottom and I am not trying to buy a stock at it bottom either.
Now consider this:

- Do you plan to buy this stock for a quick profit or do you actually buy it because you belive that it is good value and will return to higher levels within the amount of time that you are planning to hold it?
If I buy the stock then I will try to hold it for 2 to 3 months or maybe even shorter time frame depending how the stock react to the market. If the stock react badly in the market why would you want to hold it. If I buy the stock I will definately have my exit strategy in place.

If you are clear about what you want from a stock, then you don't have to know if it's going further down or up on Monday. You can make your decision based on your principles.
At the moment the stock does not provide any indication whether it's going up or down, therefore I rather wait to see the indication from technical analysis point of view.

EG: You are looking for a good investment to hold for a long term. Maybe you are looking for a stock to add to your permanent portfolio? In this case NAB is a buy. If it goes down another 50 cents on Monday is not really of your concern.
I believe it is my concern because if it does go down an other $0.50 which I am buying the stock $0.50 cheaper. isn't it what you want? to buy the stock cheaper.

You know that you bought it at a good price, below the market value. It will reward you with a nice gain. Not next week but on the long run.
Yes you can say that I buy it at a good price, but if you buy it cheaper than you should you buy it at a much better price.

Looking for a quick money riser? NAB is not going to do it for you. It may bounce back next week, *maybe even $1 but that would hardly provide you with enough profit to make it worth while.
If it bounce back $1 then it is a pure provide, eventhough it is not enough profit, but it's still a profit. The point is the entry signal is important to me, may be it's not important to you.

Think about what you want from your investment before you try to buy something.
I know exactly what I want from my investment and that is to have a strategy in place in which to generate profit. Without provide there is no point of investing.

Not trying to teach you. Just thought I'd give you an idea.
I thank you very much for your help and much appreciated. It's good to see other point of view. I don't know how much experience you got in share investing/trading, but your points has been taking into consideration.
Cheers

Stefan

[stefan]

If I buy the stock then I will try to hold it for 2 to 3 months or maybe even shorter time frame depending how the stock react to the market. If the stock react badly in the market why would you want to hold it. If I buy the stock I will definately have my exit strategy in place.

That's what I said. It depends on what your trading strategy is. If you plan to hold NAB for a year, there is no point in trying to gain another 50cents. The profit will be big enough in 12 months, regardless if you buy it at 26.80 or 26.30.

At the moment the stock does not provide any indication whether it's going up or down, therefore I rather wait to see the indication from technical analysis point of view.

If a stock is not following a normal trading pattern due to bad news, then there is no chart in the world that will tell you when it will go up or down. By the time your chart is telling you that it is going up, it has already done so and even a 10 year old can tell you then that it's now moving up.

I believe it is my concern because if it does go down an other $0.50 which I am buying the stock $0.50 cheaper. isn't it what you want? to buy the stock cheaper.

Not really. See my statement above. It all depends on what you want from your stock.

Yes you can say that I buy it at a good price, but if you buy it cheaper than you should you buy it at a much better price.

No. Again, see my statement further up.

If it bounce back $1 then it is a pure provide, eventhough it is not enough profit, but it's still a profit. The point is the entry signal is important to me, may be it's not important to you. I know exactly what I want from my investment and that is to have a strategy in place in which to generate profit. Without provide there is no point of investing.

I don't think you know what I'm talking about when I say trading strategy. It's not a strategy to generate a profit. That's actually more of a goal than a strategy.

Lets look at what you just said. If it bounces back $1, then it is a profit. How can say that?

Assuming you buy 100 NAB at 26.30, right at its bottom, before it starts going up $1. This will set you back $2630 + $20 broker fee. (Maybe your fee is higher or slightly lower, but that's not going to change my point.)

Now you sell 100 NAB at 27.30. This will return you $2730 - $20 broker fee. Your initial profit BEFORE Tax is a staggering $60. Depending on your other income, your tax rate would most likely be at leat 30%. Your profit is now $42 after tax or 1.6% of your initial investment.

If you spent more than 30 minutes on analysing and research for NAB, then your profit isn't worth it.

There is a fine line between a real profit that will take you somewhere at the end of the year, or having done 100s of trades all returning small gains that finally don't add up.

Let's do one more thing:

I buy 100 NAB at 26:90. You wait because you think it goes down further. It just so happens that you're right. So you finally buy 100 NAB at 26.30.

Now NAB starts going down further and because of your exit strategy, you sell at $26. You just made a loss:
you paid $2630, sold for 2600 plus fees = $70 loss.

I have done nothing with my shares because I believe it is undervalued and will be worth more in 12 months.

Now NAB starts going up again and you quickly enter it again to profit from its rise. So you buy 100 NAB at 26.05. After 3 months you decide to sell because you made a profit. You sell at 27.05, making $100 minus fees = $60.

NAB goes down again and you decide to buy it once more. You buy 100 NAB at $26.50. It goes up and after 3 months you sell with another win of $1/share making $60 again.

This time NAB is finally moving higher and you decide to buy it anyway, because it could go much higher now that bad news are long gone.

You buy 100 NAB at $28 and hold it until it reaches $30. You sell, happy to have made a nice profit.

Now lets look at the figures:

Over all you have made:
1 loss of $70
2 profits of $60
1 profit of $160
= profit of $210.

I have sold my 100 NAB at the same time as you for $30.
My figures are a bit different:

1 profit of $320 - $40 fees = $280.

In other words, you have worked 4 times harder than me, watching the market, getting nervous every time NAB goes up or down while I have done nothing at all. I simply invested into a stock that I believed was undervalued and a good investment for the future.

You have invested in NAB for a quick profit which you managed to do 3 out of 4 times (pretty damn good) but nevertheless you still end up with less than what I have.

Would NAB have gone down the drain, then I would sit on a paper loss waiting for better times, but if I have done my homework, knowing the banking sector, checked the figures, evaluating if NAB is worth $30 or not, then my investment can't really go that wrong. Otherwise I would have made a terrible mistake somewhere down the line.

I hope this gives you a bit of an idea. I'm off for the weekend and I promise I won't ever bother you again with a posting that big... ;)

Happy trading

Stefan

[GreatPig]

Stefan,

I think it's very easy to pick figures and scenarios that "prove" any point. I could just as easily show Jet making hundreds of dollars and you a loss.

In the end, no amount of research can ensure you "can't really go that wrong". Individual companies within a sector can perform badly, or even collapse, irrespective of the health of the sector as a whole and without warning. Companies will naturally hide as much bad news as they can for as long as they can. Once it is made public it's often too late.

So your research may lead you to believe that NAB is undervalued and a good investment, but that is not necessarily the case. For all anyone really knows, this could be the start of the end for NAB and their share price might never be the same again. NAB has been trending downwards for the last two years, and while this might be a somewhat bigger hiccup than usual, there's no saying a rally from it is going to reverse that trend.

And even if NAB prices do climb over the long term, unless the gain is better than say 5% pa compounded, you'd be better off just leaving your money in cash deposits.

So I think there's no guarantees with anything, but personally I wouldn't be buying NAB shares for the long term any time soon unless it was obvious that a major trend reversal was underway.

GP

[JetDollars]

Stefan,
Thank you for your details analysis...
I hope what we are discussing not lead into argument...

The problem with you scenario is that if NAB stay below $26.90 then you are holding your capital without any return from investment. Where as me I did make some profits and learn my lessons through trading....that's the different.

What happen when you buy NAB at $26.90 and it keep going down? and never recover? and for the next 2 to 3 years NAB trading between $20 and 26.90, what will you do, just holding to your NAB stock? Where as me I trade through those time and make profit, so what is the outcome?

Let continue with your example:
Recap:
You
Buy 100NAB at $26.90 = $2690

Me
Buy 100NAB at $26.30 = $2630, Sell $100NAB at $27.30 = $2730, Profit = $100
Buy 100NAB at $26.30 = $2630, Sell $100NAB at $26.00 = $2600, Loss = -$30
Buy 100NAB at $26.05 = $2605, Sell $100NAB at $27.05 = $2705, Profit = $100
Buy 100NAB at $26.50 = $2630, Sell $100NAB at $27.50 = $2750, Profit = $100
.
.
.
NOW NAB going down again.
Buy 100NAB at $26.00 = $2600, Sell $100NAB at $25.50 = $2550, Loss = -$50
Buy 100NAB at $25.00 = $2600, Sell $100NAB at $24.50 = $2450, Loss = -$50
Buy 100NAB at $24.00 = $2400, Sell $100NAB at $23.50 = $2350, Loss = -$50
Buy 100NAB at $22.00 = $2200, Sell $100NAB at $21.80 = $23500, Loss = -$20
.
.
.
NAB now trading at around $22.00 after 1 year.
After 1 year trading I make $100 - brokerage fees ($20x16=$320) = Loss -$220.

You bought the stock at $26.50 which meant you are lossing 100 x $4.50 = $450 + $20 = -$470 and if you sell then your total loss = -$490.

There are thousand of scenario out there and this is only two of them.....

Making money does not sound as easy as your analysis, if it is that easy then I will just get my 10 years old neighbour to buy the stock for me.

I am looking forward to your comments and new scenarios....

GreatPig,
Thank you for your input and support....

If you don't hear from me for the next two days then I must be at Steve McKnight Seminar at Melbourne....looking forward to it....take care.

[stefan]

Jet,
Don't worry. We're not having an argument.

You don't understand my point and neither does GreatPig. It's not about proving something. It's about showing some principles on how it all works.

Of course I can come up with a scenario where NAB is a loss and I'll make no money at all. I mentioned that in my posting as well.

This is about knowing what you're buying. You obviously don't know anything about NAB other than it's share price and how it's been trading over the last few months. Fair enough. For your style of investment that may be all the information you need.

My approach is different. If you understand the banking sector (I'm not saying that I do), then you have a background history of NAB that goes far deeper than just looking at charts. You will understand the true value of this company and you can come up with a decision as to wether you want to buy it at this level or not.

If you base your decision on a chart, then chances are that you are plain wrong. Charts do not take anything else into consideration than historic data. Times change and if NAB happens to be in trouble, then the price will continue to go down.

GreatPig is saying that this could be the start of the end of NAB. Yes it could. But if you've done your research then you know why the price is coming down and you know it's true value based on its financials. So his statement is just supporting my initial point. Do a proper research before you buy. If you don't feel comfortable, then by all means, don't buy. I'm not buying either. All I'm saying is invest more time in knowing your stock rather than looking at some charts.

Don't forget. This is not about buying or not buying NAB. It could as well be any other stock.

My example was not to proof anything. It was only to show what can happen if you trade a lot of small gains.

Yes, if you don't get a decent return, then there is no point in buying. That's exactly what my example tried to show.

What happen when you buy NAB at $26.90 and it keep going down? and never recover? and for the next 2 to 3 years NAB trading between $20 and 26.90, what will you do, just holding to your NAB stock? Where as me I trade through those time and make profit, so what is the outcome?

If I do what I'm trying to explain, then this won't happen. If NAB goes down over the long term, then my analysis based on solid financial figures, dividends and profit would have been wrong. Therefore my understanding of this company wasn't good enough. It can happen, but the risk is far smaller than when you base your decisions on charts.

Anyway, for the sake of it let's assume it happens:
If NAB goes down, then your stop loss will kick in. You are then free to invest your money into another stock. I for my part would hold on to NAB and invest my other money into other shares just as you do. (Don't tell me you put 100% of your money into NAB... ) You still sold with a loss while I'm still holding a stock that according to my analysis has a long term value which is much higher than its current level. I might therefore even buy more.

See, you are having a different approach and that's fine. All I'm doing here is trying to show you another way. Nothing is gospel. After trading for 10 years, I've come to some conclusions. I've traded your way many years and I can't see anything wrong with that, other than that it will keep you very busy and nervous for many years to come. :-). The other way may not sound attractive to you but time is your friend when it comes to the stockmarket.
And as you will find out, it is actually the only friend you will ever find.

I wish you happy trading, lots of good gains, profits and a lot of experience. It's well worth it.

[JetDollars]

Stefan,

I thank you for your help, especially with your experienced in the market. I look forward to hear from you again.

Thank you.

[stefan]

Jet,

Don't forget to invite me to your party when you make your first million! :-)

Now I better get going and start that BBQ. I'm feeling hungry. Have a nice weekend! May the new week bring us many good opportunities to trade!

[profithunter]

I am very surprised that nab has dropped this far. I thought NAB was already trading at a discount compared to its peers due to its incompetent managment. Now that it has a new CEO, revamped board and got rid of one of its chief currency traders who dosen't believe 'self' exists, I think nab has got to be a good buy. But I have been wrong before, it could turn into another AMP.

[GreatPig]

Profithunter,


it could turn into another AMP.
Or a Barings ;D

GP

[JetDollars]

Stefan,

A lot of millions flying through my way, now all I have to do is learn how to catch it and catch it fast.

Before you start the BBQ don't forget to buy the meats first.

My first million is edging closer everyday.

[GreatPig]

JetDollars,

Why are you posting at 3:45am ???

Haven't you heard of sleep? :o

GP

[profithunter]

JetDollars,

Why are you posting at 3:45am ???

GP

I find this disturbing too :o

[JetDollars]

JetDollars,

Why are you posting at 3:45am ???

Haven't you heard of sleep? :o

GP

I have to wake up at 3:30AM that morning to go to Steve McKnight property investing seminar at Melbourne.

While waiting for Still_In_School to pick me up I logon to check email and lead to forum....LOL.

ProfitHunter,
Why do you find it disturbing if you don't know the reason?

Try to search for solution first because jump straight to conclusion...

[profithunter]

ProfitHunter,
Why do you find it disturbing if you don't know the reason?

Try to search for solution first because jump straight to conclusion...


Chill out Jet...I was joking, don't take things so seriously ;)

[JetDollars]

ProfitHunter,

I finally got you back. I was just joking as well and I hope you feel that I was angry.....LOL

Got you!

Take care...mate

[stockGURU]

NAB dropping like a brick again this morning. Down to $26.60 at the moment and looking to go lower.

Looks to me like it might sink below $26.50 today.

Time will tell.

[JetDollars]

Look like NAB will be heading below $26.00 in the near future.

I am keeping a close watch on this share.

[stefan]

Will be interesting what happens on Monday after the damning report of their Irish business. Has the market already factored that into the current price?

http://theage.com.au/articles/2004/07/30/1091080444018.html

Happy trading

Stefan

[jkool]

Just my 2cents worth to you prevous rather lengthy discussions here.

I would say that it comes down to what type of trader each of us here is.

If somebody looks into fundamentals, knows the sector, company earnings etc. and sees in these something providing him/her with the right signal to buy/sell then he/she will probably do so regardless of the daily charting results.
On the other hand a chartist will perhaps base his/her decision based on whatever the graph/price history is showing and goes from there.

I personally would not buy NAB based on my charts (which I love:)) unless it shows me some strong reverse signal. I do see the big picture showing price being lowest since 2001 or so BUT I am not going to go against my own trading strategy. I just would not feel comfortable with my decision then.

Just a thought.

[stefan]

I would be very interested to see when any of the chart guys would consider NAB a buy. So please let me know. I'm very keen to see how NAB has to trade until a chart trader gets a buy signal.

Happy trading

Stefan

[jkool]

Again I would say it depends on what you as a charter use to determine the signals.

I am trying to keep my decision process simple using linear regression line and MMA only. For me the NAB would become attractive when
a) long MMA (21 wks) will run nicely in steady incline below the short MMA (13 wks) while short MMA had not crossed it on downwards for substantial period of time (say 4-5 months)
AND
b) price closes in buy/hold zone below linear regression line but above indicator created by linear regression line minus 5%
AND
c) stock closed higher than last week
AND
d) volume increased
AND
e) quick readup on latest companys announcements and news not uncovering anything out of ordinary

Then I will consider it a BUY for myself.

Remark - as you can see my trading is based on a long term system where I only consider weekly price movements. May not be everybodys cup of tea;)

I hope its understandable - no rocket science but easier to see on chart than describe in writting.

[stefan]

jkool,

much appreciated! I'm not going to judge your system. As you said, everybody has his own ideas. It's very interesting to read about them and I'm sure others are interested to hear about different ideas and strategies.

Happy trading

Stefan

[Guest]

NAB trading strongly today, as is most of the banking sector.
Up over 1% since I bought on Thursday.

I thought the stock was very cheap at $26.50 (bound for a rally as is most of the banking sector, strong supports at that price level), but you guys don't seem to be too optimistic.

I'm only a newbie (been following the market for a long time, but this is my first trade), should I take the profit and run or hold?
(At the moment my instinct is hold, but after some remarks by ppl Im not so sure)

HELP ???

[Joe Blow]

NAB trading strongly today, as is most of the banking sector.
Up over 1% since I bought on Thursday.

I thought the stock was very cheap at $26.50 (bound for a rally as is most of the banking sector, strong supports at that price level), but you guys don't seem to be too optimistic.

I'm only a newbie (been following the market for a long time, but this is my first trade), should I take the profit and run or hold?
(At the moment my instinct is hold, but after some remarks by ppl Im not so sure)

HELP ???

It's a tough call Neo... are you in NAB short term or for the long haul?

If you are in for the long haul then I think you got in at a good price. If you are a short term trader then take profits whenever you think. As long as you are in front you are okay! ;)

My personal view is that NAB has a little further south to go yet before it bottoms. But hey, I could be wrong!

Good luck!

[JetDollars]

Joe,

I agreed with you that NAB may still heading south for a short period of time before bounce back.

[Guest]

Thanks Guys,

Appreciate your input...

I am in it for the short term at the moment, my strategy only involves support and resistance lines, been doing OK with paper trading tests of it.

Seemed like good value at the time, currently looking for a possible break above the 10 day moving average, should be able to tell if it was a good call or not by the end of the week.

[GreatPig]

By looking at my chart for NAB tonight, I would suggest NAB is a very close watch for a buy now (for a relatively short term buy at least).

The RSI is pulling up across the 30 line and crossing the 14 day MA as well. The 7 day price MA is turning up, and the last 3 days' lows have all been higher than the previous day's.

I think if I was really considering buying this stock I might be aggressive and buy now, or perhaps be a bit safer and wait and see for another day or so to see if it continues heading up.

However, this is just my inexpert observation - certainly not a recommendation or advice!

Cheers,
GP

[profithunter]

I was thinking about writing some $26.50 Nab puts...I would be happy to buy at that price, if I got exercised then I would get a nice discount.

[Guest]

Tanks for your Great insights GreatPig! (pun not intentional ;D)

I think that is one of my problems so far.
I am still learning how to use the charting techniques and don't put enough emphasis on them.

Might have to hit the books again, and put some of the principles in practice. Which indicators do you, the more seasoned traders find most useful?

[stefan]

GreatPig,

If you see a "very short term buy" then what would you consider a target for NAB in the short term? You would have to make a $2 for a decent return, but I'm not too sure that you can get that on the "very short term".

Sure, you can always get NAB for a 50 cent run but is it worthwhile?

Happy trading

Stefan

[GreatPig]

Sure, you can always get NAB for a 50 cent run but is it worthwhile?
That depends on the time frame it takes to get it.

Let's look at some figures:

Current price according to Yahoo = $26.94
Price after $0.50 gain = $27.44

Say you purchased 1000 shares with 0.3% commission (as per the ASX game rules, although in reality you could get more like 0.1%):

Shares bought = $26,940
Buy commission = $80.82

Shares sold = $27,440
Sale commission = $82.32

Profit = $336.86 (before tax)

or 1.25% return on investment.

Converting that to annual returns based on some times to achieve that 50c gain gives:

1 day = 456.4% pa
1 week = 65.02% pa
1 month = 15% pa

So I think if a 50 cent gain could be achieved in less than a month, the ROI would be reasonable. Any less time would obviously be even better. More so again if margin lending were applied.

Now, I don't have the figure for this morning's opening price, but yesterday's close was $26.80 so it's risen by 14 cents today (in fact 15 cents now that I refresh the quote). I can see it possibly achieving a 50 cent gain in a week if this rise continues, even more so in a month.

Of course this could just be a small rally before the price starts falling again, but that is always a risk with any trade. I think the chances on this one are reasonable though.

So let's say there's a buy of 1000 shares at $26.94 and see how long it takes to reach $27.44, if it manages to at all. Of course I would then only sell at that point if the rise looked like conking out.

Cheers,
GP

[JetDollars]

GreatPig,

I must agreed with you because that's what I was thinking to do.

[stefan]

Well, if we assume that one can buy 1000 shares then yes. I was of course looking at a more reasonable amount of money to spend. I somehow don't think that most members here have $30K to spend.

While the % may be the same, the commission would eat away most of your gains.

Not to mention interest on any margin lending you might need to pay for 1000 NAB shares. As you mentioned correctly.

Happy trading

Stefan

[Guest]

Point taken stefan,

I only ended up buying 280 shares for about at $26.50 per share. Today was 25c up to $27.05,
so $154 profit - $40 for brokerage (buy and sell)
$114 net profit in 3 days, a 1.54% net profit in 3 days of trading, or 184% per annum if I keep going this way.

I'm quite satisfied so far as it is my very first trade, now I have to decide when to take profit.

If it drops bellow $27 I will sell (like a stop-loss).

Does anyone have a more concrete goal for the stock?

Also many of you say that there are better opportunities in the market, would you be able to suggest any, Im still learning so any help would be great.

Thanks for all your feedback everyone! :)

[GreatPig]

Neo,


Does anyone have a more concrete goal for the stock?
Please be aware that no one here can offer you financial advice. All comments are just that - general comments.

Since you've actually bought this stock and are looking for ideas on when to sell, I think most people will be wary of offering anything too specific so that it can't be construed as being financial advice. You have to make your own decisions based on your own research and study.

In my example I am just talking hypothetically. I don't own the stock and don't plan to buy it at this point in time. I could very well be totally wrong and the price could take a dive again at any moment.

You've done well so far, so just keep a close eye on the price and sell when you think is best.

Cheers,
GP

[Guest]

Sorry GP,

Didn't mean to be taken like I was asking for financial advice (new to the forum not sure of what is appropriate).

Sorry everyone!

[stefan]

Neo,

Generally you will (or should) find it difficult to get specific information regarding the movement of a stock or recommendations to buy/sell. This is a forum where we can talk, speculate and dream about shares and possible profits.

Of course one can always ask for the opinion of others but you shouldn't expect to see something like: Buy NAB at 26.85 with a short term target of 27.90. Stop loss 26.70. Hold longer term for a target of 30+.

You will find these kind of things in stock trading rooms where people try to profit from each other by recommending stocks they just bought.

However, I can't see a problem discussing different views of a stock. So if ask me about NAB, I can give you my opinion. If however you ask for a better stock than NAB to buy, then I can't help you. If I knew it, then I'd be living a different life... *;D

Well done with NAB! Congratulations on a $100+ profit.

Happy trading

Stefan

[JetDollars]

NAB has been heading north for the last 2 days...I think it going up for a short period of time before trace back to $26.48 (new support line).

[stefan]

Well, the market has just turned sour today. Everything going backwards. (Almost everything...)

This will be real test for NAB to find its bottom here.

Happy trading

Stefan

[Guest]

Wow, did that fly down....

What goes up, must come down.


Down as low as 26.58,
Luckyly common sense prevailed and I sold out (26.88), still retaining a nice profit.

No more NAB for me...

[jkool]

Oh my God..time to panic....I think I will need to realize a loss here. My NAB shares were obtained for something around $29.1...........all 4 of them ;D

I held about 140 NAB shares about two months during the dividends time and chose to take the DRP. In the meantime I got out of all my NAB holdings (only just broke even on them to be honest) and then I received my great dividends: 4 shares. :o So now I am stuck with 4 NAB for average price around $29. Anybody with a business mind here?

I mean can I even sell only 4 shares?

[stefan]

I mean can I even sell only 4 shares?

Why not putting them aside for retirement? ;)

Happy trading

Stefan

[JetDollars]

Why not putting them aside for retirement? *;)

Happy trading

Stefan

That's what I was thinking Stefan...LOL

[stefan]

NAB on free fall over the last few minutes. No holding back on the seller side and close to no support on the buyer side... Interesting times indeed.

[pxk]

New to forum, been reading comments on NAB.

Month ago bought long on RIO & BHP which have been making record profits and they're going side ways at the moment.

NAB has been making losses all over the world. eg NIB (National Irish bank) reported a loss over $100m. Why would you go long. The $24 support is a long drop to take that chance.

NAB went side ways for six days, to shake out the buyers or sellers (sellers won). It's not all gloom and doom with the NAB. Sell short or buy into a company that knows how to profit. Come on $24

[GreatPig]

Stefan,

So what you're saying is it might be a while before it gets to $27.44? ;D

GP

[pxk]

As I was writing the last tag the Nab fell near 20 cents. I think buyers are romancing with the NAB, because its been a top stock for so long, and buyers think the stock has bottomed out and buy, which they proberly
thought the same thing when the NAB bottomed at $29.

Who knows when NAB will bottom but $24 looks good!

[stefan]

NAB has been making losses all over the world. eg NIB (National Irish bank) reported a loss over $100m. Why would you go long. The $24 support is a long drop to take that chance. Sell short or buy into a company that knows how to profit. Come on $24

pxk,
I can't see your argument. You are talking like NAB would make a loss. Yes, they have made losses in some parts of their business but they are still a billion dollar profit company. And where do you take that $24 support from?

I'm not holding NAB but it's been an interesting stock to watch and discuss.

Quote from traing update released 14/7:

Cash earnings before significant items for the six months to September 30 are expected to be 10 to 15 per cent lower than the March 2004 half year result of $1.85 billion.

A drop of 15% is more than reflected in the current price level. I'm no friend of NAB but I'm keen to find value for money. Reading my other postings re NAB you'll find that I'm looking for a long term hold. Certainly it gets more and more interesting with each day. But $24? I'm keen to hear your reasons...

Happy trading

Stefan

[stefan]

So what you're saying is it might be a while before it gets to $27.44?

GreatPig,
;D I'd say so... Anyway, I find NAB a very nice example to talk about strategies and analysis. Well worth a closer look. I'm still keen to get it for the long term and to read what other members have to say. If it wasn't for NAB, this board would be dead :-)

Happy trading

Stefan

[pxk]

We haven't had a large down turn in the economy for about 14 years, which history shows happens every 7-14 years. (proberly fifteen years this time round)

Pending rises in interest rates.

Also there's pressure on banks to drop their fees and charges, which will reduce profits.

NAB profits down comared to last year.

The Stock Market has got the jitters, even companies with record profits are slightly falling or going side ways

If you look at where NAB is on the chart (I would insert an image if I could get the bloody insert image tab to work) NABs been on a downward slide for the last 2 years. Next support level is at around $24 which NAB is almost there. Support and resistance levels are a very big part in trading (only if I could that &^$@*^! insert image to work).

NABs saving grace will be if they sack 1000 workers
or so or start selling some overseas concerns. Results of improvement wont come out until November. I think that hitting $24 wont be that hard.

If you listen to brockers they will say buy buy buy! What else are the going say, they have to make a living.

[Guest]

I aggree with you Stefan, a long term outlook.
My question is, When will the dividend downgrade anouncment come, What will that do to the price and will that be the last of the bad news before a recovery?

[GreatPig]

NABs been on a downward slide for the last 2 years.
This what you want?

GP

[JetDollars]

If you listen to brockers they will say buy buy buy! What else are the going say, they have to make a living.
Never listen to brokers.

I agreed with Stefan that NAB is a long term buy, but when to buy, time will tell.

[stefan]

NAB is currently trading at levels not seen for 3 years. Looks like it has found some support here. I still don't think it will go to $24 without more bad news. Now there's always a risk that more bad stuff is in the pipeline, but for now I'm comfortable that this is a good entry point for a long term hold. Now all I need is some 100K to buy enough shares to secure my retirement.

;D

Happy trading

Stefan

[pxk]

Attachment, thanks Great Pig

Stephan
If you look at that NAB chart over the last couple of years, It more likely to hit $24, bounce around at that level for couple of months go up to the $30 mark then down and a high probability would suggest that the NAB would fall below $24.

By the time the NAB recovers, the district health nurse will be slipping you pension cheques under you bedroom door.

So are you better off putting your money in property, thats out performed the market over the last 10 years.

Putting money on a company thats just past its all time price high (stalling for the last couple of days due too high oil prices) and suposably announcing record profits on 18 Aug.

Prepare and sell short the market when it drops due to economic down turn, because we have to have recession we had too have!(an old paul keating line)

[pxk]

Stefan sorry about the name misspelling thing!

[stefan]

pxk,

I fully agree with you regarding a possible market downturn. And I'm actually speculating to be well prepared for it.

We will always have differences as far as NAB is concerned. You're looking at it from a different angle than I do. I do agree that NAB has been on a downward trend over the last 2 years. But it's a big bank nevertheless. It may currently suffer from bad news and losses in some of it's business but you have to look at the whole picture rather than a few dark spots. For me, NAB is becoming attractive to hold. Even if it tends to go down further. It was heavily overpriced in the 30s and so is the CBA. (Which I predict will be the next big slump in banking). We just had bad news for Westpac in NZ and I have no doub that this will hit the whole sector next week.

From a chart point of view, I can see the $24 target, but keep in mind that NAB has come a long way since it traded at these levels. Check the profit figures and the overall fundamentals for NAB.


By the time the NAB recovers, the district health nurse will be slipping you pension cheques under you bedroom door.
That's exactly what I'm after.


So are you better off putting your money in property, thats out performed the market over the last 10 years.

Which is exactly why I would never put my money in property right now.


Putting money on a company thats just past its all time price high (stalling for the last couple of days due too high oil prices) and suposably announcing record profits on 18 Aug.

Putting money into BHP, a stock that's trading at new hights in a over heated market doesn't sound like a good idea to me. If they announce a new record profit, then the stock may move a bit higher. Expectations are high and so the price has moved up already. I'm not after these kind of stocks. And if you predict a downturn and another one of those recession we have to have, then I certainly won't invest in stocks that are trading at new heights if they depend on a strong economy. China alone won't keep BHP going. And if you think that high oil prices are a momentary thing then I don't agree. Keep in mind that this may well be enough to seriously hit BHP or RIO or all the other big players who depend so much on an economy that we are most likely going to miss for a long time.


Prepare and sell short the market when it drops due to economic down turn, because we have to have recession we had too have!(an old paul keating line)
And why would I go out and buy a stock at record levels then? Some parts of your posting are clearly in conflict with other parts.

I'm looking forward to your reply. Always great to discuss these things.

Have a nice weekend

Stefan

[JetDollars]

Stefan,

I know NAB is a big bank, but there be another AMP?

I am pretty sure it's not, but by waiting for uptrend opportunity in the near future would be a good idea.

I know from fundamental analysis point of view NAB is a good buy at the moment. But if it does trending down further then it will be a better buy.

[stefan]

I know from fundamental analysis point of view NAB is a good buy at the moment. But if it does trending down further then it will be a better buy.
Jet,
If you are a fundamental trader looking for an investment then you don't care much if there are a few more % to gain by waiting a little bit longer. As soon as the figures add up, you buy and hold. You buy because you come to the conclusion that a stock is trading below its value. There is no need to find a bottom before you enter.

If NAB turns out to be another AMP then that's bad luck. You can't predict these things. Based on the figures and announcements we had on NAB, I consider it a buy for long term. You wouldn't buy because you're not after the same type of investment. You buy and sell for a quick profit and you base your decisions on charts and trends. Perfectly fine. I agree that right now, there is no clear indication where the price will go next with NAB. So you can't buy it.

I can, because I don't care where the price goes within the next few days. I care where it will be in a year and beyond. And because I think that NAB will continue to make billion dollar profits and pay a nice dividend for the years to come, I have no problem with buying.

Now to make it clear: I don't hold any NAB. I just use it as a good example to discuss different strategies. Wheter a stock is buy or not depends on your investment goals.

Happy trading

Stefan

[JetDollars]

Stefan,

I agreed with you, NAB is a good buy for long term investment, but just because you are a long term investors does not mean you should buy stock at anytime as long as your fundamental analysis is correct.

Fundamental analysis is to look for stock that are undervalue, then you also timing your entry position to take full benefits.

As I mention somewhere in this topic above, waiting for opportunity before you entry your position.

I am picking on you here, but I would like to take the below situation as an example, if I could:
Early on you mention NAB was a good buy at $26.90 for long term, I agreed with you but not at this price and back then I was in believe that NAB does not provide any support line, therefore it might go down further and as you can see NAB went down as low as $26.33 (close on thursday. Which meant a gap of $0.57 that is quite an amount because as a long term investor then you would enter your position quite a large amount.

If you enter your position say at $70k then the different is $1500 which is quite a lot of money.

Take care and thank you for your analysis.

[pxk]

Stefan
History shows that properties in some city fringe areas in our major capital cities never go down they always move up in price, it might be low % but they still go up.


And why would I go out and buy a stock at record levels then? Some parts of your posting are clearly in conflict with other parts.
When the Aussie market takes a dive(not over heated yet) you'll get companies like BHP fall due to panic, but then BHP would recover because of over 80% of their interests are overseas.

Alot of NAB's overseas interests have made huge losses. eg Homeside wholesale lending in the US, stuffed up in Britton, lost in Singapore. Telstra always make a huge profit but their shares go nowhere, "no overseas interests".

(Thursdays quote)

NABs saving grace will be if they sack 1000 workers or so or start selling some overseas concerns.
On Friday the NAB make a short lived effort too boost their share price with an anouncement that they're going to get rid of their IT section, and the price rises 14 cents. (no social consience)
They still have to pay out their staff with a couple of years of wages, Employ contractors to run their IT departments. Whoever wins the IT contract will have them by the short and curlies. Each time they go out to tender(which they''ll have to do every 2-3 years) are they going to replace the contractors with another contracting company who don't know their systems, I dout it. Myer's CEO (ex banking guy) got rid of their Human Resource departments back in 85 or 86 which lifted their share value, got his bonus and then buggered off. Their training went out of the window, down the track sales dropped. 2 years ago they went back to a structure with a HR level to train and motivate the staff.

If we had Banking CEO's running the country we be all on the dole or we would be trying to get refugee statas in countries like the phillipines or even worse "New Zealand" just to get work.

[stefan]

Pxk,


History shows that properties in some city fringe areas in our major capital cities never go down they always move up in price, it might be low % but they still go up.

That couldn't be further from the truth. It's just been a while since the last big pullback in the early 90s. Mind you that the Australian phenomenon of rising property prices has cast a spell on most Investors. They think property never loses in value. We shall see...


When the Aussie market takes a dive(not over heated yet) you'll get companies like BHP fall due to panic, but then BHP would recover because of over 80% of their interests are overseas.

I don't agree. You see, the market will not only dive in Australia. It's pretty sad already all over the world and economies in all major corners of the planet aren't recovering at the speed most people would like. If Australia crashes, then having an overseas interest will not help if these economies are down as well. And that's exactly the way it currently is.

Hey! I do agree with you regarding the IT outsourcing stuff you said. :) Just the usual action. Send some people home, that will increase the companies share price. Doesn't pay off for long as you said yourself.


... we would be trying to get refugee statas in countries like the phillipines or even worse "New Zealand" just to get work.

I'm not going to comment on these remarks.

[stefan]

Come on guys,

What happened to the good old NAB thread?
No more postings? Have you all lost interest?

Let me try to kick start it again...

I consider NAB a buy for longer term, but I now also consider it a buy for short term. It has somehow found some support around these levels and I would expect a quick spike up to the $27+ range this week.

Happy trading

Stefan

[GreatPig]

I'm wondering if it's about to bottom out into a head and shoulders formation.

Cheers,
GP

[stefan]

Which means it would be trading along without any clear indication up or down?

Happy trading

Stefan

[GreatPig]

Stefan,

Which means if it forms a mirror image of the circled bit there then pushes up above about $27 or so, it could recover further.

GP

[stefan]

GP,

Thanks for the clarifiation! So your chart would support my idea then? :o

Happy trading

Stefan

[JetDollars]

I guess NAB found support around the $26 mark. Which mean it is a buy opportunity here. Stop Loss should be set just below $26 say $25.94.

The reason I set stop loss at $25.94 because people liket to trade at the exact number like $26.00, $25.95, $25.90 and so for.

[stefan]

After the CBA hammer today, I'd be careful before I'd buy any banking shares. Let's just see what happens next. I withdraw my short term buy for NAB (for a day or 2 anyway) but stick to the long term one.

Happy trading

Stefan

[stefan]

As mentioned in the CBA thread, they have gone ex dividend today so that explains the pullback. I therefore re initiate my short term buy for NAB.

Sorry for the confusion. Just goes to show what happens if you don't follow a stock...

Happy trading

Stefan

[GreatPig]

I'm wondering if it's about to bottom out into a head and shoulders formation
And this is what it looks like now.

Cheers,
GP

[Lucstar]

Yer, its finally broken the resistance. I've got NAB stocks myself. I just bought into it a two weeks ago. What do you guys think?? Is this just a false alarm?? Or is NAB about to pull something off??

[JetDollars]

the whole market is picking up at the moment so NAB will do well in the near future

[still_in_school]

Hi Guys,

technically IMHO, i think NAB still has some fundamental issues, and over the last couple days it been trading around the $27.00 mark, the main problem i see is, that the stock seems to have risen in value, relatively to the low volume of trades, currently at the moment just purchased some NAB8o Oct $27.50 Puts at .735, option price jumped to .79cents back now trading around .75, but mainly on the T/A im seeing that the RSI is too high and that the stock price should come down in the next few days...

lets see what happens tonight in the US with analyst reportings, could be an interesting monday morning, depending on tonights reportings.

Cheers,
sis

[stefan]

Does anybody know what happened to NAB today? Why is it down 1.2%?
I didn't follow it for a while.

Happy trading

Stefan

[Bingo]

Generally the banks turned down when Japan opened lower. CBA as well. There was a further downgrade of NAB yesterday.

Bibgo

[stefan]

Thanks Bingo! Much appreciated.

[mime]

Anyone know why it is not moving much. The other banks(cba) are volitile right now while nab is sitting pretty still.

[JetDollars]

Generally the banks turned down when Japan opened lower. CBA as well. There was a further downgrade of NAB yesterday.

Bibgo


Just wanna have a bit of fun because I just notice that you spell you name wrong.....LOL...LOL...LOL

[JetDollars]

NAB go ex-dividend today.

Will NAB drop in price as much as the dividend amount? if yes, why? if not, why not?

Your comment/s please!

[DTM]

Just interested whether anyone else thinks NAB is ready to go up. I think its ready to go up and have bought in the money March call options and was wondering whether any one else may think the same or whether others may think it a bad call.

I'm playing this one close to the line and may seem risky but I think that it will go up in the next two days.

:goodnight

[SuperTed]

Not me.

NAB is a donkey only being held up by its dividend. Of late it has been dragged along by the sector as a whole.

[SuperTed]

Not me.

NAB is a donkey only being held up by its dividend. Of late it has been dragged along by the sector as a whole.

But will the sector hold or has an April rate rise been factored in as well?

[clowboy]

I aggree with both of you.....

NAB is cheap if it has started it's turnaround, and that is a big if.

Long term NAB will recover and it is cheap now (IMHO) however if any more bad news where to come out of NAB then the market would overreact and the SP would fall.

That would be a good entry.

Bad news is the likes of a cut to dividend etc.


Just My opinion

[markrmau]

Lenders in the housing market are starting to do (desperate?) things like offer petrol discounts with housing loans. Perhaps a bank with good exposure to the buisiness loans segment would be best (don't know what nab's exposure is).

[ob1kenobi]

The National Australia Bank (NAB) which has been going sideways of late, made a break for the $34 mark toward the end of last week. Could it be that the worst is now behind them? The chart is below but it appears to be on the verge of breaking out and moving up. Time will tell for the NAB. May be worth watching.

[ob1kenobi]

According to the NAB web site, last week they released an Australian Region Market Update, which is an outline of their Business Plan / Strategy from now through till 2008. They see 2006 - 2008 as being their growth times. It's a lengthy document (108 pages) and repetitive but interesting. The report is available as a PDF file at: http://www.nabgroup.com/vgnmedia/downld/Australian_Market_Update_sept_2005.pdf

For the record, I do not currently hold shares in NAB but have had them on my watchlist for awhile.

[TheAnalyst]

If NAB is priced with the other 3 pillars it is $35.60 so its trading at a discount.

[Julia]

If NAB is priced with the other 3 pillars it is $35.60 so its trading at a discount.

There are six analyst recommendations I've seen in the last month which rate NAB as a Hold at best. Good returns are not expected for some time to come.
All the analysts above suggested ANZ and St. George as being their preferred banking stocks.

I wouldn't touch it until it starts to demonstrate more recovery than it has done so far. There are better buys out there.


Julia

[doctorj]

Check out the report about ARB in issue 72 of the Australasian Investment Review for a great example of how good brokers are at predicting the past and ignoring the future.

T/A aside, NAB represents a great recovery story and I believe there are opportunties for investors with an appropriate timeframe.

Disclosure: I hold.

[ob1kenobi]

Check out the report about ARB in issue 72 of the Australasian Investment Review for a great example of how good brokers are at predicting the past and ignoring the future.

T/A aside, NAB represents a great recovery story and I believe there are opportunties for investors with an appropriate timeframe.

Disclosure: I hold.

Doc, I agree with your last statement: "T/A aside, NAB represents a great recovery story and I believe there are opportunties for investors with an appropriate timeframe." It's getting the timeframe that is important. For those that intend to hold for a 12-24 month time frame, it may have potential. Personally I'm still on the sidelines.

[doctorj]

Just thought I'd post this chart. ANZ's profit figure in conjunction with recent market strength seems to be supporting this leg.

I hold.

[TheAnalyst]

Anyone been looking, holding, selling, buying NAB warrants? would like to hear nore.

[Yippyio]

Anyone been looking, holding, selling, buying NAB warrants? would like to hear nore.

Getting hammered at the moment. Is this a buying op or has it got more to go ??? (the million dollar question I guess) please refer to crystal ball.

[Kauri]

Anyone been looking, holding, selling, buying NAB warrants? would like to hear nore.

May not get there but I am waiting down at the $32.00ish level... :)

[TheAnalyst]

Getting hammered at the moment. Is this a buying op or has it got more to go ??? (the million dollar question I guess) please refer to crystal ball.

It depends on your investment time frame, at the moment the share price is below its fundamental price and if it is valued on its last posted net profit without the inclusion of one off asset sales and expenses and compared to the other banks it should be easilybetween $37 and $39 a share.

[happytrader]

Nab does this every report time that I've looked at for years. If it did'nt I'd be shocked. It also gives pretty good call entry signs afterwards without having to guess as well. Just wait I reckon. Save yourself afew bucks.

Cheers
Happytrader

[brisvegas]

couple broker downgrades coming through for NAB


SYDNEY (AFX) - Goldman Sachs JBWere said it has downgraded its long-term
recommendation on National Australia Bank Ltd to "hold" from "buy" saying that valuations
on Australia's largest bank are "stretched".
The downgrade follows NAB on Wednesday reporting a 4.4 pct fall in September year
cash net profit to 3.31 bln aud and indicating costs had exceeded expectations as the
bank seeks to rebuild its businesses following a damaging foreign exchange trading
scandal in 2004.
NAB is approving loans at a faster rate than its rivals to increase market share.
Goldman Sachs said given NAB's decision to trade nearer term cost leverage for longer
term revenue growth, the company's returns profile has been pushed further out than it
originally anticipated.
The firm said Goldman Sachs said it had previously viewed that share price upside
existed through upside earnings surprise from restructuring benefits and capital
reinvestment.
But this is no longer the case as NAB has indicated it will reinvest many of the
nearer term cost benefits from restructuring back into its core franchise to improve the
future growth prospects.
Goldman Sachs said this strategy will ultimately place NAB in a stronger position for
sustainable longer term growth but it does have the effect of lowering near term earnings
which makes near term valuations challenging.
Given that NAB is trading on a price to forecast fiscal 2006 earnings multiple of
14.4 times, representing an 8.0 pct premium to its peers and has limited prospects for
near term earning upside, Goldman Sachs said it struggles to justify buying the stock at
current levels.

[brisvegas]

31.80 - 32.00 is probable first supp level . personally wouldnt get involved in NAB myself currently

........... pete

[brisvegas]

SYDNEY, Nov 10 (Reuters) - Citigroup Investment Research has

downgraded its rating on National Australia Bank Ltd. <NAB.AX> to

"sell" from "hold" and said the stock appeared overpriced and

restructuring benefits would be slower than anticipated.

"While NAB's rate of revenue growth impressed, expense growth

also looks likely to exceed our initial estimates," Citigroup

analysts Craig Williams and Neil Murchie said in a report.

Citigroup, which kept a 12-month share price target of A$31,

added: "Extracting costs will be more difficult and take time."

Shares in Australia's biggest bank, which is cutting jobs as

part of a restructuring plan, were down 2.4 percent at A$32.38 by

10:52 a.m. (2352 GMT) in a broader market 0.16 percent weaker.

Goldman Sachs JBWere also downgraded its long-term rating on

NAB to "hold" from "buy" and cut its earnings forecasts, while

Credit Suisse First Boston favours other banks.

"NAB have chosen to trade nearer term cost leverage for

longer term revenue growth," Goldman Sachs analyst James Freeman

said in a report. "While this decision may benefit the longer

term trajectory, this has resulted in our returns profile being

pushed out, thus leaving medium term valuations challenging."

NAB posted on Wednesday a better-than-expected 2.6 percent

rise in second-half cash earnings per share, which is earnings

before goodwill amortisation and one-off items, but said

moderating economies would pose challenges to business growth.

"Overall, the result confirmed to us our theme of NAB being a

fully priced restructuring story, with NAB's restructuring on

track -- rather than ahead -- to deliver the turnaround story as

expected, rather than something better," Credit Suisse First

Boston analysts Nick Selvaratnam and James Ellis said.

CSFB said there were better risk/reward trade-offs in St

George Bank Ltd. <SGB.AX>, Westpac Banking Corp. <WBC.AX> and

Australia and New Zealand Banking Group Ltd. <ANZ.AX>.

"The key risk to our NAB investment view is the possibility

of a divestment of the UK franchises at any time," Selvaratnam

and Ellis said. They retained a "neutral" rating on NAB.

Goldman Sachs lowered its 2006, 2007 and 2008 diluted cash

earnings per share forecasts by 3.4 percent, 4.1 percent and 2.2

percent, respectively.

UBS raised its 12-month share price target on NAB to A$31.80

from A$30.84 and trimmed its 2006 forecast by 0.5 percent, saying

the biggest caveat on the bank was its "stretched valuation."

"Turnaround appears to be underway, albeit slowly," UBS

analysts Jeff Emmanuel, Jonathan Mott and Ross Curran said in a

report. "Numerous pressure points are holding forecasts down."

($1=A$1.35)

[TheAnalyst]

These type of analyst reports have came out a couple of times this year but none of them can get it right exactly even though they try. None of these analysts can be exact as they are only making assumptions on some of the information that they have before them. The low earnings growth of between 3 and 4 % between 2006 and 2008 has to be rembered that the analysts are discounting the growth to NPV net present value and the share price as well so they have compounded the inflation and deducted to reduce the increases; this they will not mention as the average person wont be able to work that out and they cannot be exactly accused of under rating the growth or share price. As for the share price they have also dicounted its value as well in other words if the share price in one year from now is going to be $36 they will say $32 as the value is discounted.

Something for us to think about when these analysts speak.

[TheAnalyst]

31.80 - 32.00 is probable first supp level . personally wouldnt get involved in NAB myself currently

........... pete

Thats a really big gap appearing on the graph today and with a stock like NAB it wont be long before it is filled. Sellers must have forgot to get their dividend, so the selling pressure should'nt last to long. ????

[Yippyio]

NAB is now on it's way back up after a low of 32.04.

This would have made a very nice day trade for someone, today. Not me though I bought at 32.47 and sold at 32.28. :swear:

[mit]

Well the corporates are getting back from their lunch and 31.40 is holding.

MIT

[Kauri]

NAB is now on it's way back up after a low of 32.04.

This would have made a very nice day trade for someone, today. Not me though I bought at 32.47 and sold at 32.28. :swear:

And I am still sitting down there at $32.00... waiting.. :hammer: :swear:

[TheAnalyst]

And I am still sitting down there at $32.00... waiting.. :hammer: :swear:

Did you buy call warrants or the actual stock??

[Kauri]

Did you buy call warrants or the actual stock??

I was looking for DMA cfd's, and am still looking (didn't quite reach me at my price of $32.00) :swear:

[brisvegas]

I was looking for DMA cfd's, and am still looking (didn't quite reach me at my price of $32.00) :swear:


you will get another chance . 32.00 is probably tad too low to get a fill being psychological level . 32.10 would have got you a fill . plenty of people will have same idea as you no doubt . have to be ahead of the crowd , if it trades at 32.00 the worry will be if it runs the stops that no doubt would be right under that level fwiw



............. pete

[Kauri]

you will get another chance . 32.00 is probably tad too low to get a fill being psychological level . 32.10 would have got you a fill . plenty of people will have same idea as you no doubt . have to be ahead of the crowd , if it trades at 32.00 the worry will be if it runs the stops that no doubt would be right under that level fwiw
............. pete

I agree about the psychological barrier at 32.00. In hindsight I might have had my support/res. line a tad too low at 31.90. What I had planned was if she came down to that line and bounced I would get on at 32.00 and try to take as much out of the days bounce as possible. In the current market I have found a few where they fall rapidly to a major supp/res level that coincides with a good trendline and bounce quite strongly. I think I have missed this one..

[TheAnalyst]

I agree about the psychological barrier at 32.00. In hindsight I might have had my support/res. line a tad too low at 31.90. What I had planned was if she came down to that line and bounced I would get on at 32.00 and try to take as much out of the days bounce as possible. In the current market I have found a few where they fall rapidly to a major supp/res level that coincides with a good trendline and bounce quite strongly. I think I have missed this one..

Hi Kauri

I bought call warrants the other day when i posted to you NABwmc NABWMA but now i reckon next week you will get your chance to get back in again at maybe $32 but i have gone short today on the Put warrants and plan to sit there and wait.

THis aint advice its my opinion.

[Kauri]

Hi Kauri

I bought call warrants the other day when i posted to you NABwmc NABWMA but now i reckon next week you will get your chance to get back in again at maybe $32 but i have gone short today on the Put warrants and plan to sit there and wait.

THis aint advice its my opinion.

If she respects the T/A I'd say that you have called it right....again :iagree:

[doctorj]

Have been following NAB very closely for the last couple of months after it broke out of its trend. Sitting in a tight range between the .5 and .618 fib retracement of the fall. Volume has fallen away and each day's trading range has been much narrower than average. Several bars can be seen with long tails showing strong rejection of lower prices, but does today's bar with a close near the bottom suggest sellers are starting to win the arm wrestle and a move back below the recent support is imminent?

I guess we'll see in the coming days - anyone else following?

[sam76]

Wow it's been well over a year since anyone has spoken about NAB as a share!

Anyone know why it's going gangbusters today??

[Gurgler]

Anyone know why it's going gangbusters today??

It's not just today - check out the past two weeks!

I've been thinking the same. Doctor J, as the last one to post before today, do you follow this stock? Can you offer any perspective?

(holding, happily)

[barnz2k]

wow didnt notice. It was recovering kinda slowish from the slump and then since start of april shooting vertical haha. cool :)
no big anouncements listed.

[Gurgler]

Is this recent drop related to the US sub-prime problem in some way? Todays SP is its lowest since early Dec 06. For one of the four pillars, this is some sick puppy!

FN Arena reports that there is speculation about that policy:

ABN Amro tips 2008 as the year that Australia’s official four pillars policy for the banking sector might come to an end. For what it’s worth: ANZ and National are seen as the most complimentary, but Westpac is believed to be interested in a tie-in with one of the other three as well.
------------------------------------------------------------------------------------------------------------
Current FNArena ranking, Buy/Hold/Sell ratios and average target price (between second brackets suggested share price upside):
#1 Westpac 6/4/0 ($28.58) (+7.97%)
#2 ANZ 4/6/0 ($31.76) (+8.95%)
#3 CommBank 4/4/2 ($55.88) (-1.10%)

#4 National 4/5/1($42.83) (+7.07%)
#5 St George 0/9/1 ($35.76) (+0.09%)

Source: The Banking Sector Wrap - Week To Wednesday July 25
FN Arena News - July 26 2007
By Greg Peel and Rudi Filapek-Vandyck

Any views/insights (positive or negative) on the future of this stock??

[Ken]

If we take everything account.

For the NAB to bum in the ass.... we would ask ourselves this question

Are house prices rising?
Is the economy growing?
Are there jobs to find easily?


This is very simplistic but if you can answer yes to all questions, then the banks should do okay in the economic climate!

Corrections are corrections...

[Ken]

Chart wise signs were there to go short on the NAB when it broke under $39.00

The chart looks ugly. Very similar to PGL in its drop...

But you know if you're buying NAB at current prices, long term buying is good value.

Suck it in. If you want a big piece of the NAB you will get your opportunity over the next month...

Buy along the time line, average your price out and you should do okay..

[kennas]

NAB starting to look more interesting, but maybe it's just following the XAO...or is that the other way around......:confused:.

Maybe it's another sign of XAO as a potential breakout...

Jumping that 200d ma will be encouraging...

[Ken]

Why are all the banks pretty much unchanged but nab is down the most?

NAB - performs worst out of big 4 again.

Why?

[greenfs]

Why are all the banks pretty much unchanged but nab is down the most?

NAB - performs worst out of big 4 again.

Why?

Whilst I do hold ANZ & WBC (as one must as part of a balanced portfoilio) it is my view that this sector is to say the least very mature. When you have got CBA indicating that they must rely on its Business Banking sector to compensate for the lack of future gains in the personal/housing sector it indicates to me a pretty much guaranteed lack of momentum in the share price going forward.

Given CBA's share of total middle market business clients has (from memory) halved over the past 10-12 years, my view is that its share price must have at least peaked and may even start to drift southwards over coming months/years as it becomes difficult to sustain the current dividend stream.

NAB's immediate share price performance may be due to it contemplating the acquisition of a non-performing UK financial institution as regularly reported in the press over the past week.

I know others may have alternative views and look forward to reading & digesting same with due respect.

[happytrader]

I bought into this one this arvo only because I thought it was cheap enough to hold into the next quarter. Chart wise there is more often than not an overlap in pricebars from one quarter to the next.

Cheers
Happytrader

[Ken]

I think there are some stocks you just dont sell, especially at the age of 22.

I am scared to think of what NAB shares are going to be worth in 30 or 40 years.

They might rip us off with charges and fees, so might as well be part of it.

[2020hindsight]

just for the record
here's NAB for the last 2 years (High Low Close) + averages
Also NAB vs XAO for last 12 months (candlestix) + ditto (percent indicates relative preformance campared to datum of XAO)

PS I plan to do this to a few stocks - please feel free to either
a) help out and divvy the job up between a few of us
b) suggest amendments to graphs
c) request some stocks you'd like me to post (maybe PM me)
d) tell me it's not necessary lol (or too wasteful of memory maybe?)

[gazelle]

Still have to do a bit more work to gauge possible price points , but looking for NAB to either low into the 18th January or setup a cntr trend reversal on this date . The 2002 correction ran out 1094 pts and thus far the current pullback has ran out 873 so I am just using that figure as a reference guide . current mkt position is trading below the 45 deg line which is normal within an accelerated downtrend but I think the timing componet might set something up with short and intermediate cycles moving into proportional alignment . it could very well turn out to be nothing but the traps are set and I will try and read the mkt as it moves into this date .

Regards Gazelle

[gazelle]

Scenario 1 : might have a better possibility of playing out as indicated by outside reversal . still looking at the possibility of a low into the 18th but with the accelerated nature of trend pitch could well overun time . see what unfolds picking bottoms in a high momentum mkt is a high risk low probability strategy ( AKA McLarenn ) it might be prudent to wait for a few higher lows to confirm a strengthening mkt structure .

Regards Gazelle

[Miner]

Scenario 1 : might have a better possibility of playing out as indicated by outside reversal . still looking at the possibility of a low into the 18th but with the accelerated nature of trend pitch could well overun time . see what unfolds picking bottoms in a high momentum mkt is a high risk low probability strategy ( AKA McLarenn ) it might be prudent to wait for a few higher lows to confirm a strengthening mkt structure .

Regards Gazelle

Today's special note from Huntleys NAB, WBC and ANZ are given as a buy.
Recently one of the directors has bought more than a million dollar worth shares from market.

[gazelle]

Nice low into 3453 . Scenario No 1 played out as expected . should at least stabilise around these lvs .

CBA : Significant timing date 25th January . same method of approach .

[AnDy62]

Bizarre performance today, managed to fall from early highs to 30.34, then rally back to the 32s, but still down. Anyone know why, CBA etc were all fine and no announcements that I could see

[treefrog]

into solid downleg following classic DT formation - looking for next substantial support at $31:oo


(what?? too short?? - its as long as it needs to be and no more or less) - ignore this drivel

[nikkothescorpio]

Bizarre performance today, managed to fall from early highs to 30.34, then rally back to the 32s, but still down. Anyone know why, CBA etc were all fine and no announcements that I could see

Read my mind - I've no idea why it dropped to that level and then just as fast went back - someone hit the wrong keys on a sell?????

Anyone with any ideas?

[Bill M]

Another director John Thorn bought 1,000 shares yesterday. Whilst it's not a lot money wise it was none the less his own money and the shares were bought at market price. The other director bought $2.2 million worth, not a bad sign of confidence.

[3 veiws of a secret]

Another director John Thorn bought 1,000 shares yesterday. Whilst it's not a lot money wise it was none the less his own money and the shares were bought at market price. The other director bought $2.2 million worth, not a bad sign of confidence.

I just wonder if the directors sold out today,seems this share is reeling .
Sadly I picked a few ,before it nosedived to $28.59.....trust me to walk away from the screen to make a cuppa of tea ,and not clear my order! :eek:

[treefrog]

interesting level for NAB

the weekly shows it at its 4 year low with momentum still screaming south but a closer look for the last week's candle shows a Long-Legged Doji;

"Long-Legged Doji: This candlestick has long upper and lower shadows with the Doji in the middle of the day's trading range, clearly reflecting the indecision of traders."

wouldn't argue with that - here's the chart - oh, and a zoom in on the Doji

[AnDy62]

NAB has held up very nicely today, bucking the trend for the other big banks. Happy to ride it out with a share like NAB, and accumulate those nice dividends, held this for around 3 years and still am up 21% even with this recent turmoil. Show me my investment in 10 years, that's what I think with NAB It's learnt from a few hard knocks and I think will improve as a company in the coming years :2twocents

[MRC & Co]

Wrong thread

[dhukka]

NAB has held up very nicely today, bucking the trend for the other big banks. Happy to ride it out with a share like NAB, and accumulate those nice dividends, held this for around 3 years and still am up 21% even with this recent turmoil. Show me my investment in 10 years, that's what I think with NAB It's learnt from a few hard knocks and I think will improve as a company in the coming years :2twocents

Sounds like someone is fishing for reassurance. Self reassurance (or delusion) is popular in times like these. NAB will be a good company in the coming years because they've learned from a few hard knocks, not exactly a sound basis for an investment decision. Good luck with that.

[AnDy62]

Thanks mate, my portfolio is still nicely up, must be due to all my self-delusions helping me :rolleyes: It's easy to criticize people, but a bit harder to do better yourself as you have probably found out the hard way... :cool:

[AnDy62]

Btw big shot, my argument re NAB and learning from mistakes was not founded by delusion but through many sources I've read- see 'Top 100 Stocks for 2008'- they talk about how NAB now focuses on sustainable, organic growth and has cut their cost profile - lessons learnt from past mistakes, particularly the UK. If you don't believe me do a little research on it. It is hardly a pathetic delusion but a well agreed upon fact, same story with how AMP is run. So, sorry to prove your little psychological quip incorrect buddy :)

[dhukka]

Btw big shot, my argument re NAB and learning from mistakes was not founded by delusion but through many sources I've read- see 'Top 100 Stocks for 2008'- they talk about how NAB now focuses on sustainable, organic growth and has cut their cost profile - lessons learnt from past mistakes, particularly the UK. If you don't believe me do a little research on it. It is hardly a pathetic delusion but a well agreed upon fact, same story with how AMP is run. So, sorry to prove your little psychological quip incorrect buddy :)

Now I know you're delusional if you think reading Top Stocks constitutes research. Wasn't NAB in Top Stocks 2007 edition? How did that pan out?

[AnDy62]

Did you see the phrase 'many sources'? I don't consider Top Stocks good research - I was just pointing out my original post about the hard knocks wasn't my own self-delusion. Anyway, kick the boot in again... I don't really care.

[adamim1]

NAB worth investing in after their big crash? It seems like they have plateaued, and maybe on the rise?

[McNovice]

what's our verdict on these guys? The telegraph business insider yesterday said sell. I still think they are at a good price today

[AnDy62]

^ I wouldn't pay too much attention to that, I've seen many other sources saying the opposite - it's subjective. Personally, I feel that there can't be too much more down side from here especially with that dividend. Also, NAB has the most exposure to agribusiness of the banks in Australia and might be well positioned in that regard. DYOR.

Disclaimer- I don't hold NAB but will look to jump back on some time.

[Grinder]

Noticed there is no postings on this forum on NAB, so I will start one. After todays results and the price climb there seems to be quite alot of interest. I have been quite bearsih on the big banks shorting them of late, but am starting to think it's NAB could push up through $33. What do others think?

[Grinder]

aahh.. there it is. Don't quite know what happened, but there is a thread after all. Must be Fri arvo, nevermind.:o

[oldblue]

Noticed there is no postings on this forum on NAB, so I will start one. After todays results and the price climb there seems to be quite alot of interest. I have been quite bearsih on the big banks shorting them of late, but am starting to think it's NAB could push up through $33. What do others think?

Hi Grinder
Do you have some T/A reasoning to support that or is $33 just a gut feel following a better than expected result?
I hold NBA but must confess I have no idea how the SP will go. I reckon the banks will be hostage to bigger, world-wide-type influences for a while yet and I can't guess how those will play out.

:confused:

[robots]

hello,

great result for NAB, for many who follow the man, in this case Michael Chaney it is good news

thankyou

robots

[dhukka]

hello,

great result for NAB, for many who follow the man, in this case Michael Chaney it is good news

thankyou

robots

A great result? I'd call 8.7% increase in eps in the current environment reasonable but hardly great. Compared to 2H07 profit and eps were both down. Provisions for bad debts are up susbstantially and volumes are slowing. A tough environment for the banks going forward.

[oldblue]

I'd call it a solid result in a very tough environment.

Just not too confident of prospects going forward and after all, that's what the market is interested in.

:confused:

[Grinder]

Hi Grinder
Do you have some T/A reasoning to support that or is $33 just a gut feel following a better than expected result?
I hold NBA but must confess I have no idea how the SP will go. I reckon the banks will be hostage to bigger, world-wide-type influences for a while yet and I can't guess how those will play out.

:confused: Nope, no T/A on the SP to suggest otherwise, just thinking aloud after yesterdays close and was interested to hear from someone else. Don't hold NAB but will be watching closely.:D

[mapna]

I guess this is just a day-to-day momemtum, the global financial crisis is still very bad, AIG just posted a big loss in the US, European financial markets are also effected heavily by this crisis.

"AIG Tumbles

AIG lost $3.87, or 8.8 percent, to $40.28, contributing the most to the declines in the S&P 500 and Dow. The world's largest insurer reported a first-quarter net loss of $7.81 billion, compared with earnings of $4.13 billion a year earlier. AIG wrote down contracts it had sold to protect investors by $9.11 billion in the quarter to comply with rules that require the company to estimate their present market value. Standard & Poor's and Fitch Ratings cut the company's credit grades after the announcement. "

based on the comments from number of analysts, they reckon financial crisis is still far from over yet. There are still more coming out after the bad results from AIG


IMO - DYOR

[karundus]

I am holding NAB i bought in at $32 ...

What do you think the share price will get up to in the long term?

[hoppielimp]

It appears that between the Banks most of the Banks feel the write downs are almost complete for them.

They have said though that because of how the insurance companies categorise their sub-prime exposure as investments, that their reporting of these issue will start to surface this year...hence the bad news in theory, will come pretty much from insurance companies...not the retail/investment banks.

[questionall_42]

It appears that between the Banks most of the Banks feel the write downs are almost complete for them.

They have said though that because of how the insurance companies categorise their sub-prime exposure as investments, that their reporting of these issue will start to surface this year...hence the bad news in theory, will come pretty much from insurance companies...not the retail/investment banks.

Hoppielimp - can you elaborate on that. I would have thought that accounting standards were consistent between banks and insurance cos, so that there would not be in any discrepancy in how they report their losses or write-downs.

It is also arguable that the banks have completed all their write-downs; in theory, as the economy slows, more write-downs would surface. Take Commander Communications (CDR) as an example, or even the ABSs or CNPs or AHGs - big losses waiting to be booked.

[gazelle]

On the weekly chart NAB has ran out 180 & 360 deg into the 16th May which could indicate a change of trend is due . The initial drive into Nov high was approx 875pts in 90 days with price action exhausting into the top . The current rally has ran approx 875pts in 63 days so price has balanced in a shorter period of time indicating a strong trend . NAB has a historical tendency to change trend on seasonal dates so I have looked at price in relation to the geometrical angles and points of resistance for additional confirmation . The uptrend is still in place with the largest pullback in the current drive being 453pts in approx 15 days or a little over two weeks . we can use this as a directional gauge to reduce our current position in the anticipation of a pullback in either time or price back to the target level . 3530 level comes out on 1/2 & 1/4 retracement points so any further weakness below this point will indicate change of trend . Price is trading above the 45 deg angle from 4470 so if time turns trend it might only be for 1 - 2 weeks at most . 10th Oct is another significant date to watch .

[Frank D]

NAB goes ex-div last day of this month, so there is an expectation that price is going to gap down....

[gazelle]

Time has turned trend and price is trading below 3530 mid point level and below the 63 3/4 deg angle from 4484 top ( 1x 2 ) which further indicates short term resistance . Downside target is around 3029 which will balance the previous counter in price . Previous counter ran down 15 days in time which will set the ( possibility ) of a an equal move down in time and price to 3029 towards the end of the month . There are other timing dates coming in so I will look at these in further detail but balancing counters asgainst each other can provide us with a directional gauge to expect trend to turn but the primary componet is time .

[jwjw2121]

Seems a bit of a drought on NAB related posts here... very cheap at the moment although I read an article with reference to David Hunts predictions (he correctly predicted that the market would downturn after october last year) - he reckons that the market will bottom out in mid-Oct/early Nov after the US hits its predicted bottom in early/mid Oct. so the question is to hold or sell and buy back at a lower price? Extremely cheap today at under $20 given that most analysts value it at $33-35.

[YELNATS]

Seems a bit of a drought on NAB related posts here... very cheap at the moment although I read an article with reference to David Hunts predictions (he correctly predicted that the market would downturn after october last year) - he reckons that the market will bottom out in mid-Oct/early Nov after the US hits its predicted bottom in early/mid Oct. so the question is to hold or sell and buy back at a lower price? Extremely cheap today at under $20 given that most analysts value it at $33-35.

NAB has an amazingly good dividend yield of over 10% fully franked at the current price around $19.15, assuming they can hold or improve their dividend.:)

[mit]

Reminds me back in 2002 where the dividends were over 7% and higher than home loans. You could borrow to buy the banks and make money on the dividend.

However, it is different today, even if our Banks are not hiding many more nasties, the fact that they cannot get funds to loan to others could crimp their earnings quite a bit and if I wanted to buy a bank I wouldn't buy the worst performing bank.

[xoa]

If the Australian housing bubble starts to burst, our banks will find themselves in a very difficult position. That's what investors are afraid of. They're profitable for now, but so were Fannie Mae, Bear Stearns and Lehman Brothers until late last year. NAB has been hammered the most, because it has a reputation for being the worst managed Australian bank.

[robots]

hello,

so today we had 7 bil sold and 7 bil bought, thats a lot in for the buy man

the funds are setting up there returns

thankyou
robots

[mit]

The funds could be ones selling. A third of the volume happened at the lowest price at the market open. sounds like dumping to me.

Of the 32 million shares exchanged 10 million sold at the lowest price.

[oldblue]

hello,

so today we had 7 bil sold and 7 bil bought, thats a lot in for the buy man

the funds are setting up there returns

thankyou
robots

Hi robots.

Where does the 7b figure come from? My broker reckons it was a shade under 32m which admittedly sounds like a bit more than retail investors having a dabble.

;)

[oldblue]

Hi robots.

Where does the 7b figure come from? My broker reckons it was a shade under 32m which admittedly sounds like a bit more than retail investors having a dabble.

;)

The penny's finally dropped, robots.
I guess it's the ASX turnover figure for the day? The point is that funds may be buying but funds are also obviously selling.

;)

[mit]

If the Australian housing bubble starts to burst, our banks will find themselves in a very difficult position. That's what investors are afraid of. They're profitable for now, but so were Fannie Mae, Bear Stearns and Lehman Brothers until late last year. NAB has been hammered the most, because it has a reputation for being the worst managed Australian bank.

Hasn't our Housing bubble already burst? I know it kept going for some markets but tt peaked in 2003 for Sydney/Melbourne which are the biggest markets.

[xoa]

Hasn't our Housing bubble already burst? I know it kept going for some markets but tt peaked in 2003 for Sydney/Melbourne which are the biggest markets.

Take a look at the median house price in Australia for the past decade. It's spiked like an exponential curve. Dorothy, we're not in Kansas any more.

[Sunder]

Hasn't our Housing bubble already burst? I know it kept going for some markets but tt peaked in 2003 for Sydney/Melbourne which are the biggest markets.


Take a look at the median house price in Australia for the past decade. It's spiked like an exponential curve. Dorothy, we're not in Kansas any more.

Mit was talking Sydney/Melb

Syd:
RPData Index
30/06/05 538.484
30/06/06 546.197
30/06/07 559.770
30/06/08 562.292


Melb
RPData Index
30/06/05 353.468
30/06/06 368.093
30/06/07 402.817
30/06/08 444.414

In Sydney, you could have done better holding cash.

I wouldn't call it the bubble bursting, but it's not exactly "exponential growth" either.

[xoa]

In Sydney, you could have done better holding cash.

I wouldn't call it the bubble bursting, but it's not exactly "exponential growth" either.

That's good then (maybe) for any banks which are only exposed to Sydney.

Nationally though, Australian house prices have inflated faster than anywhere else in the English speaking world, including the USA or UK. That in itself makes our banks very vulnerable.

[oldblue]

Meanwhile, a nice trade in the banks for those with the money and nerve to have bought yesterday, particularly NAB.
Where to now is the bigger question.

:confused:

[mit]

That's good then (maybe) for any banks which are only exposed to Sydney.

Nationally though, Australian house prices have inflated faster than anywhere else in the English speaking world, including the USA or UK. That in itself makes our banks very vulnerable.

I know that WA has still been going strong but I thought that the volume would have been less than the Melbourne/Sydney markets

[mit]

Meanwhile, a nice trade in the banks for those with the money and nerve to have bought yesterday, particularly NAB.
Where to now is the bigger question.

:confused:

I was thinking about it Dividend at 10% and the PE ratio of under 8, it was tempting but I didn't like the fact that it was falling so much faster than the other banks

[Nashezz]

I had bought the day before at $21.29 (at what I though was already pretty good value) on margin. So while I wasn't overly concerned at the big drop the next day I was spewing I had bought one day too early to get the fat prophets.... When I looked on Thursday during the day it was $18.80 and probably even lower at some stage!!!!

[chatty]

NAB will raise capital by $3 Billion. Do you think this will have negative impact on its current share price? As this will certainly have dilution effect. In addtion, given the loss from some corporate loans, future dividends will have to be revised down as well imo.

[Ruincity]

Chatty i'm no expert but I believe the answer to your question is YES.
This sort of money hungry BS is unfair to current shareholders.
Especially those holding at higher prices.

Apparently there is going to be an offer to retail customers to buy at the same price..
This will probably be around the time that the price falls below the $20 offer which I predict it now will soon.

Anyway I look at it 2 ways:
1. Fkn greedy bastards you stink.
2. Get in now and make the money before everything goes bust (ie intelligent move because NAB is uncertain and scared).

Consider trying to raise funds for something like Iron Ore in the present times.....
Surprised there hasn't been more discussion regarding this..

[sammy84]

I think the opposite will happen, and I quite positive as a NAB shareholder. The capital raising was oversubscribed firstly, indicating the willingness of institutional investors to be part of NAB. Their tier 1 capital will be at 8% now. Also if you look at mirvacs share price today, I think they rose around 15% after a successful capital raising. Finally, but most importantly, they beat ANZ and Westpac to it. The amount that the other banks are going to be raise will have to be lower, or a bigger discount given 3b that NAB has now secured. This can only give NAB a competitive adv against the other banks for any acquisitions in future.

[Ruincity]

Fair points Sammy.

In my limited history I have seen few capital raising's that have had a beneficial result on SP.
It is just an outright admittance of a cheaper value for the SP IMO.
One thing must be kept in mind that the price is discounted!
And quite substantially I feel.

I am a holder.

[alphaman]

most importantly, they beat ANZ and Westpac to it.
It's not that simple. With this placement NAB's tier 1 increases to 8%, but ANZ is already 8.1%.

Anyway capital raisings rarely reverse price trends. Any price effect is just a reflection of the current state of the general market.

[sammy84]

It's not that simple. With this placement NAB's tier 1 increases to 8%, but ANZ is already 8.1%.

Anyway capital raisings rarely reverse price trends. Any price effect is just a reflection of the current state of the general market.

Agreed, this wont be good news for short term investors. However in the long run I think it will help strengthen the company. Does anyone out there think this might be NAB preparing to buy some of suncorp? I have no reason to think this besides the fact it is a very large amount raised.

[dhukka]

I nearly fell off my chair laughing when I saw the title of today's announcement by NAB.


NAB to strengthen further its capital position
The fact is NAB needs this capital to cushion the writeoffs coming down the pike. Assuming a 20$ issue price NAB will be issuing 150 million shares, a 9% dilution to existing shareholders, yeah that is something to happy about.

[canaussieuck]

I nearly fell off my chair laughing when I saw the title of today's announcement by NAB.


The fact is NAB needs this capital to cushion the writeoffs coming down the pike. Assuming a 20$ issue price NAB will be issuing 150 million shares, a 9% dilution to existing shareholders, yeah that is something to happy about.

Quite surprised that they got what they were after here Dhukka, does that say anything at all? The worst US banks couldn't even raise capital when they needed it.....or is it a reflection of the availability if capital now as compared to a month ago?

Cheers,


COz

[dhukka]

Quite surprised that they got what they were after here Dhukka, does that say anything at all? The worst US banks couldn't even raise capital when they needed it.....or is it a reflection of the availability if capital now as compared to a month ago?

Cheers,


COz

Agreed, the glass half full point of view would be that at least they could actually raise capital. Here is a quick quiz though, out of all of the capital injections to US financial institutions, how many of them are trading above the issue price?

[canaussieuck]

Agreed, the glass half full point of view would be that at least they could actually raise capital. Here is a quick quiz though, out of all of the capital injections to US financial institutions, how many of them are trading above the issue price?

This is just a guess, but a big zippo, nadda, nil, zilch, goose egg comes to mind?:D

The sad thing is some may not recover at all, and thats the tax payer who's now the long term investor.

COz

[oldblue]

Let's not forget that banks need to continually increase their capital if they are looking to increase their business ( assets).
In NAB's case they are effectively replacing the need to underwrite the next two DRP's which is what banks normally rely on for their incremental capital increases.

;)

[magnets]

hi,
i'm new to shares and need some advice/help
The announcement yesterday about issuing shares has me confused, as i understand it if a company has 100 shares to sell and i buy 10 of them. If they then they release another 100, shouldn't i be issued with a further 10 so that i maintain my % stake in the company?

If this is correct, (i'm with etrade) will my portfolio jump in number of shares held? or do i have to manually adjust it. (and how do ifind out what numbers need adjusting)

If i'm wrong, ugh, I don't want to think if i'm wrong, i bought when they were 25.10

Thanks for helping!

[oldblue]

It's big subject but briefly, a company is not obliged to make a pro-rata issue to all shareholders every time it issues new shares. There are rules to follow of course but it means that a shareholder doesn't always get to keep his or her proportion of the capital.
In NAB's present case, they are making a placement to institutional holders to be followed by an offer to retail shareholders of $10,000 worth of new shares, ie 500 shares each. Note that the offer is not proportional - every holder gets offered $10,000 worth.

:)

[nomore4s]

hi,
i'm new to shares and need some advice/help
The announcement yesterday about issuing shares has me confused, as i understand it if a company has 100 shares to sell and i buy 10 of them. If they then they release another 100, shouldn't i be issued with a further 10 so that i maintain my % stake in the company?

If this is correct, (i'm with etrade) will my portfolio jump in number of shares held? or do i have to manually adjust it. (and how do ifind out what numbers need adjusting)

If i'm wrong, ugh, I don't want to think if i'm wrong, i bought when they were 25.10

Thanks for helping!

Magnets got some bad news for you.

The reason they are issuing more shares is to raise capital so they will not be giving out shares to existing share holders for free.

You will get nothing from this round of capital raising unless you buy more shares in the capital raising. Your % holding has been diluted as stated by a few of the other posters.

[dlcx]

Another newbie here.. so in a case like this, where the SP of NAB has fallen around 8%, is there potential here to buy some for short term gain?
Is there much chance of NAB going up again (eg by 5% in coming weeks)

Or in such a situation, would it contiune to slide?

[YELNATS]

$20 a share was never going to be a very enticing offer to existing shareholders.

With the price around $22-$23 over the past week, they should have been aware that this announcement would have at least a 10% deflationary effect on their share price, which is what has happened now.

A bit of a lose-lose situation. Lose if you don't take it up, lose if you do, or at best only break even.:mad:

[Ashsaege]

Didn't CBA do a share placement a few months ago? CBA's SP was smashed, but then quickly recovered. I think NAB will follow suit :2twocents

[skc]

Didn't CBA do a share placement a few months ago? CBA's SP was smashed, but then quickly recovered. I think NAB will follow suit :2twocents

CBA's placement was specific for the BankWest acquisition. NAB's placement is for general shoring up of capital... so can't really compare the two on even footing imho.

[dhukka]

Another newbie here.. so in a case like this, where the SP of NAB has fallen around 8%, is there potential here to buy some for short term gain?
Is there much chance of NAB going up again (eg by 5% in coming weeks)

Or in such a situation, would it contiune to slide?

What is the chance of it raining on Saturday? This is essentially what you are asking. What do we know about the current environment? There is great volatility at the moment, moves of 5% a day in either direction are possible, so no doubt there will be rallies that you can trade.

Other things to consider for longer term holders. The current capital raising dilutes existing shareholders by about 9%. Next years eps forecast for NAB was -1% (according to comsec). Given the capital raising, the current news on exposure to insolvent firms, NAB's exposure to CDO's and CLO's, and as we enter the really nasty end of the credit cycle, do you think NAB is more likely to be receiving earnings upgrades or downgrades in the next 6 -12 months? Then, even if you do believe earnings downgrades are forthcoming is it already reflected in the stock price at current levels?

[Ashsaege]

CBA's placement was specific for the BankWest acquisition. NAB's placement is for general shoring up of capital... so can't really compare the two on even footing imho.

imho? Sorry I don't know that lingo.

Well yeh cant compare most things on an even footing, though outcomes can still be the same.

[oldblue]

imho? Sorry I don't know that lingo.

Well yeh cant compare most things on an even footing, though outcomes can still be the same.

I think it means " In my honest opinion".

Some of this shorthand does take a bit of working out but stangely enough, once learnt it seems to stick!

:)

[skc]

imho? Sorry I don't know that lingo.


I think it means " In my honest opinion". :)

I used it as "In my humble opinion" - but the opinion was also honest :)

A great function under google is the define: {subject}. Works for lots of acronyms, short hands and financial terms.

[Ashsaege]

I used it as "In my humble opinion" - but the opinion was also honest :)

A great function under google is the define: {subject}. Works for lots of acronyms, short hands and financial terms.

I kinda sound like an old fart who isn't up with today's lingo.. Though actually Im only 22 and I have clocked up many hours over the years chatting on the internet in short hand. IMHO is pretty much the only thing i haven't bothered to learn... i thought it was something similar to LOL

[magnets]

IMHO is pretty much the only thing i haven't bothered to learn... i thought it was something similar to LOL

heh
i spent a year trying to work out why my dad would send me emails, sometimes with very serious news in them and end it with LOL

he thought it was Lots of Love.

[nth brisbanite]

I've just received my offer to purchase up to $10,000 worth of new NAB shares. The most interesting thing for me is that the offer price will be the lesser of (a)$20 and (b)weighted average price during the 5 days before 12th December. At least I won't be paying $20, and losing money, like the institutions did with NAB's recent $3 billion placement. The current share price is $19.

I'll probably take up the maximum amount as I consider it to be a good buy. What is everyone else on this forum doing?

[oldblue]

No real science in this but I'm unlikely to participate if the SP stays around current levels. Too many other (seemingly?) attractive stocks around at the moment, competing for my cash when the market turns.
But if the SP were to jump or crash in the last few days before 5 December I may reconsider.

;)

[rewesh04]

Boys

The bank is not that dumb, watch the SP for NAB around the end time of the offer, Of course will raise over $20 , or else people will not buy any shares from the offer. Even if the share price stays below $20 mark , the bank itself will buy a huge amount to make the sp goes over $20 . Watch and see !!!!!!!!!!!!!!!!

[oldblue]

Boys

The bank is not that dumb, watch the SP for NAB around the end time of the offer, Of course will raise over $20 , or else people will not buy any shares from the offer. Even if the share price stays below $20 mark , the bank itself will buy a huge amount to make the sp goes over $20 . Watch and see !!!!!!!!!!!!!!!!

I'm not sure that NAB is all that concerned if the full $250m ( less than 8% of the total sought ) is not subscribed.They reserve the right to scale back if applications exceed that figure. After all, the institutional offer has already raised $3b and restored NAB's Tier 1 capital to above the magic 8%.
The SPP should be interpreted as NAB " keeping faith" with its small shareholders, IMO.

;)

[nth brisbanite]

The bank is not that dumb, watch the SP for NAB around the end time of the offer, Of course will raise over $20 , or else people will not buy any shares from the offer. Even if the share price stays below $20 mark , the bank itself will buy a huge amount to make the sp goes over $20 . Watch and see !!!!!!!!!!!!!!!!

Is the above legal? Isn't that manipulating the market? :confused: I'm sure that ASIC would investigate NAB if they dared to buy huge amounts of shares to pump up the price.

[robots]

hello,

they should be sending us letters to sign for the sacking of 80% of the management team because the performance has been pathetic,

Chaney has a lot to answer, and I believe Ahmed Fahour should be stood down for offloading shares at $24 each a month prior to capital raising

thankyou
robots

[ROE]

Boys

The bank is not that dumb, watch the SP for NAB around the end time of the offer, Of course will raise over $20 , or else people will not buy any shares from the offer. Even if the share price stays below $20 mark , the bank itself will buy a huge amount to make the sp goes over $20 . Watch and see !!!!!!!!!!!!!!!!

huh? what the hell are you on about?
lot of company has raised equity recently and their share price tank way below the raising equity price.

WES - $30 tank to $19 bucks
CBA - $33-$34 bucks tanks to $29 recently
IPL - $2.50 tank to $2.25 recently recover...still way off $4 mark before
the equity raising.

I tell you why people buy them at $20 ..most of them are place for institution and that the only time they get to buy a large chunk of shares at fixed price..any other time they have to buy it over weeks and months before they get the required number of shares
and when they do that it could drive the price up 10%-20% by the time they are done buying.

The market decide the price of the stock got nothing to do with they want to maintain a certain price level.. if NAB make more bad debt and the condition get worse you see it tanks below $20, not saying that it will but that how the market works.

[oldblue]

That's pretty much how it is.
And you can add SBM and CSR to the list of stocks trading below their recent issue price - although 'recent" might be stretching things a bit in SBM's case.

[skyQuake]

NAB making a break.

Tiny volume on the break and follow-thru today prob means this is some kind of false break.

[oldblue]

There's been a bit of talk about the prospect of NAB needing to have another capital raising.
After the success of the ANZ "easy money" SPP it's possible that there's a bit of a rush to get set with a few NAB in case they follow suit.

The story is a few days old but here it is.

http://www.businessspectator.com.au/bs.nsf/Article/NAB-debt-may-prompt-capital-raising-TTDZQ?OpenDocument&src=srch


;)

[skyQuake]

And here we have a nice island reversal coupled with a false brk. Might re-enter shorts at end of day.

[dracula]

And here we have a nice island reversal coupled with a false brk. Might re-enter shorts at end of day.

The SPP offer is $21.50
I wonder if the market price will drop further on Mon, or we can hedge to lock in 80 cents profit...

[skyQuake]

The SPP offer is $21.50
I wonder if the market price will drop further on Mon, or we can hedge to lock in 80 cents profit...

I'm short NAB and playing it on the short side so take my bearishness with a grain of salt.

In general the share price takes a dive on the day the instos trade their placed stocks.
I'm loving the price action at the moment. Dow up 2%, NAB ends the day in the red; False brk, island reversal, laggin price leaders - all say loads about how NAB is gonna fare.

[nomore4s]

I'm short NAB and playing it on the short side so take my bearishness with a grain of salt.

In general the share price takes a dive on the day the instos trade their placed stocks.
I'm loving the price action at the moment. Dow up 2%, NAB ends the day in the red; False brk, island reversal, laggin price leaders - all say loads about how NAB is gonna fare.

You don't think that gap might be filled though?

I've noticed on alot of the stocks that have had capital raisings gap down and then end up trading back at the price level before the raising not long afterwards. This probably has more to do with the strength in the market lately though.

[skyQuake]

You don't think that gap might be filled though?

I've noticed on alot of the stocks that have had capital raisings gap down and then end up trading back at the price level before the raising not long afterwards. This probably has more to do with the strength in the market lately though.

Though there is that possibility, I consider that remote for now. Its still technically an island reversal, and I'm waiting for it to play out. In the meanwhile I would still be playing NAB to the short side, though I do expect a squeeze sooner or later.
-----------------
This is NAB's second raising in 12 months, and it was the bad debt provisions that drove it down, rather than the cap raising. Have a look at BBG, they raised, and never got back up again.

Cheers

[Motogoon]

Hey, i've never bought shares from a share purchase plan but have a opportunity to with NAB.

Is there a minimum amount of time i have to hold them after purchasing or can i just sell them as soon as i get them?

Seems like an easy way to make a quick profit if you're allowed to do that & if the price stays where it is.

[oldblue]

Hey, i've never bought shares from a share purchase plan but have a opportunity to with NAB.

Is there a minimum amount of time i have to hold them after purchasing or can i just sell them as soon as i get them?

Seems like an easy way to make a quick profit if you're allowed to do that & if the price stays where it is.

Offer closes 21 August.

Allotment date 31 August.

Holding statements/Confirmation Advice despatched 2 September.

No minimum time required to hold once you know you have them.

;)

[ajjack]

Maximum application is only $15K, and even then it is likely
to be scaled back.

Not to worry, there's still a quick and easy profit to be made,
provided the markets stay strong for a few more weeks.

[YELNATS]

Maximum application is only $15K, and even then it is likely
to be scaled back.

Not to worry, there's still a quick and easy profit to be made,
provided the markets stay strong for a few more weeks.

I wonder how the scale back will be performed.

Will it be a set % scaleback for all amounts up to $15,000 or will the higher amounts be scaled back by a bigger % than the lower amounts?

The answer to this could determine how much I allocate to this SPP, as I don't want to tie up cash unnecessarily even for perhaps a couple of weeks, when it will only be refunded to me.

[oldblue]

I wonder how the scale back will be performed.

Will it be a set % scaleback for all amounts up to $15,000 or will the higher amounts be scaled back by a bigger % than the lower amounts?

The answer to this could determine how much I allocate to this SPP, as I don't want to tie up cash unnecessarily even for perhaps a couple of weeks, when it will only be refunded to me.

With the paper profit at over 20% on current SP I won't be worrying about tying up a bit of cash for a couple of weeks!

;)

[hijk]

I received two different applications for the NAB share offer for different holdings.

The application says any shareholder can only apply for a maximum of $15k.

If allocations are scaled back as seems likely, and there is a minimum number of shares offered to each holding after a scale back, I might get a bigger allocation by splitting my application over the two separate holdings.

Does anyone more experienced know how scale backs are typically done ?

[oldblue]

I'm not sure that there's anything "typical".

I've seen situations where up to a minimum amount has been allocated, then a percentage. Sometimes it's a reducing percentage above a minimum, sometimes it's an absolute percentage. Personally, if I had the funds I wouldn't try to finesse the game but would apply for the max and hope for the best. The opportunity cost of tying up funds for a couple of weeks shouldn't be a consideration, IMO.

;)

[YELNATS]

I received two different applications for the NAB share offer for different holdings.

The application says any shareholder can only apply for a maximum of $15k.

If allocations are scaled back as seems likely, and there is a minimum number of shares offered to each holding after a scale back, I might get a bigger allocation by splitting my application over the two separate holdings.

Does anyone more experienced know how scale backs are typically done ?

I'm in the same position, with 2 different holdings, one inside a SMSF, the other outside.

My gut feel tells me to apply for the same amount for both holdings, that way to secure the most shares in total.

[YELNATS]

With the paper profit at over 20% on current SP I won't be worrying about tying up a bit of cash for a couple of weeks!

;)

Point taken. It's just that I don't have unlimited funds and would also like to participate in BEN's SPP which is around the same time.

At the moment BEN's market price of $8.65 is around 28% above their offer price of $6.75.

Need to make the most hay possible while the sun shines.

[oldblue]

Point taken. It's just that I don't have unlimited funds and would also like to participate in BEN's SPP which is around the same time.

At the moment BEN's market price of $8.65 is around 28% above their offer price of $6.75.

Need to make the most hay possible while the sun shines.

I wouldn't normally do it but in that situation if I didn't have something else to sell I'd be tempted to try to raise a short term loan from my wife, my mother, my kids .............

;)

[skyQuake]

Put it on the credit card even! Free money!

Preferably the BEN cc, so that way they make money, and might haev a surprise profit upgrade before you get your SPP shares ;)

[Taltan]

Why not just sell the existing NAB or BEN shares that you must of had to have the SPP entitlement. Sell BEN at 8.65 and buy at 6.75. Even considering the scale back risk its a damm good deal

[oldblue]

Why not just sell the existing NAB or BEN shares that you must of had to have the SPP entitlement. Sell BEN at 8.65 and buy at 6.75. Even considering the scale back risk its a damm good deal

Precisely.

Unless of course you were only holding a handful of shares to qualify for any SPP's around.

;)

[SilverRanger]

Anyone here knows how the scale back works for NAB? The offer document didn't state this in detail.

And of course we would all hope that NAB would do what ANZ did to please its retail shareholders, but how likely would this be?

[Rainmaker2000]

Scale back will happen........I don't know the methodology........I only own 28 NAB shares......so whatever the scale back, it will be a substantial increase to holdings:)

[oldblue]

Yes. a scale back is almost certain given the tone of NAB's announcements and the rumoured adverse reaction of underwriters to ANZ's decision to accept all applications in full.

NAB reserve the right on this of course and also method of scaleback.