Pump your money into shares in the big Banks and share in the rewards they rape off thier customers.

Ultimately, anyone who has Superannuation is a co-owner of those banks and your voting rights are used by the super fund to say "good job, go make more money"

Paradox said...

Pump your money into shares in the big Banks and share in the rewards they rape off thier customers.

Ultimately, anyone who has Superannuation is a co-owner of those banks and your voting rights are used by the super fund to say "good job, go make more money"

Nothing like a post based on a well informed opinion.

I don't suppose many will bother checking up on the accuracy of the above opinion so here are a few facts.

Looking at the price of a few of the banks over the last five years compared to today and what the annual dividends are.
Admitedly, CBA is the best so here it is first;-
Price 5 years ago 43.50,
Dropped to 24.03 two years ago, almost 50 %
todays price 55.60
Annual dividend 2.90 per share = 5.2% return to those greedy shareholders.
(You can get 6.1 % on a term investment without being a shareholder)

Westpac Bank (WBC)
Price 5 years ago 23.58,
Dropped to 14.40 two years ago, almost 50 %
todays price 24.24, a gain of 66 cents for 5 years, = 12 cents per year
Annual dividend 1.39 per share = 5.7% return to those greedy shareholders.
(You can get 6.1 % on a term investment without being a shareholder)

ANZ Bank
Price 5 years ago 24.65,
Dropped to 11.83 two years ago, almost 50 %
todays price 25.10, a gain of 45 cents for 5 years, = 9 cents per year
Annual dividend 1.26 per share = 5.0% return to those greedy shareholders.
(You can get 6.0 % on a term investment without being a shareholder)

When all the banks dropped by around 50 % two years ago, it was the greedy shareholders money which was directly at risk. They fell by around 50%.
The deposits were all guaranteed by the government. They didn't drop at all.

Any money put up by shareholders is money at risk. You can make money or you can lose it.
For that risk you expect there to be some increased return otherwise you might as well just put it in the bank at the guaranteed 6%.
If everyone does that there will not be any bank to borrow it from because nobody has put up the money to establish the bank.

Incidentally, the shock value of quoting the enormous 3 billion dollar profit neglects to quote the market capitalisation of CBA as over $64 billion.
That is, shareholders have put up $64 billion to run the bank and they got back 3 billion profit. That's 4.7%.
So in answer to the question in the original post, No I don't find it offensive.

And no I don't have shares in CBA because I think they are overpriced at the moment.

pweedas said...

Paradox said...

Pump your money into shares in the big Banks and share in the rewards they rape off thier customers.

Ultimately, anyone who has Superannuation is a co-owner of those banks and your voting rights are used by the super fund to say "good job, go make more money"

Nothing like a post based on a well informed opinion.

I don't suppose many will bother checking up on the accuracy of the above opinion so here are a few facts.

Looking at the price of a few of the banks over the last five years compared to today and what the annual dividends are.
Admitedly, CBA is the best so here it is first;-
Price 5 years ago 43.50,
Dropped to 24.03 two years ago, almost 50 %
todays price 55.60
Annual dividend 2.90 per share = 5.2% return to those greedy shareholders.
(You can get 6.1 % on a term investment without being a shareholder)

Westpac Bank (WBC)
Price 5 years ago 23.58,
Dropped to 14.40 two years ago, almost 50 %
todays price 24.24, a gain of 66 cents for 5 years, = 12 cents per year
Annual dividend 1.39 per share = 5.7% return to those greedy shareholders.
(You can get 6.1 % on a term investment without being a shareholder)

ANZ Bank
Price 5 years ago 24.65,
Dropped to 11.83 two years ago, almost 50 %
todays price 25.10, a gain of 45 cents for 5 years, = 9 cents per year
Annual dividend 1.26 per share = 5.0% return to those greedy shareholders.
(You can get 6.0 % on a term investment without being a shareholder)

When all the banks dropped by around 50 % two years ago, it was the greedy shareholders money which was directly at risk. They fell by around 50%.
The deposits were all guaranteed by the government. They didn't drop at all.

Any money put up by shareholders is money at risk. You can make money or you can lose it.
For that risk you expect there to be some increased return otherwise you might as well just put it in the bank at the guaranteed 6%.
If everyone does that there will not be any bank to borrow it from because nobody has put up the money to establish the bank.

Incidentally, the shock value of quoting the enormous 3 billion dollar profit neglects to quote the market capitalisation of CBA as over $64 billion.
That is, shareholders have put up $64 billion to run the bank and they got back 3 billion profit. That's 4.7%.
So in answer to the question in the original post, No I don't find it offensive.

And no I don't have shares in CBA because I think they are overpriced at the moment.

5 years is a bit short to assess a gain as it's less than an economic cycle and includes a crash only seen every 20 years or so. You also have to add dividends of 5% to 7%/yr and the tax benefit of dividend imputation. It was floated for $5.40 in '91. Thats 12.4% plus dividends plus tax benefits so its more like 15% to 20% per year for twenty years. We're getting ripped off except people who would have millions of shares to outweigh this. That's why people say there is a lack of competition in the banking sector. Like airports, health funds and telecoms, another example of right wing ideology failures favouring privatisation when it really competition not ownership that delivers the best out come for consumers and Australia.

www.themoneymasters.com

yeah go on and flame me farktards

truth is truth, and we've all been working thinking we're so smart for what....?

oh hang on....

this could be 'conspiracy'

Little Jon said...
5 years is a bit short to assess a gain as it's less than an economic cycle and includes a crash only seen every 20 years or so. You also have to add dividends of 5% to 7%/yr and the tax benefit of dividend imputation. It was floated for $5.40 in '91. Thats 12.4% plus dividends plus tax benefits so its more like 15% to 20% per year for twenty years. We're getting ripped off except people who would have millions of shares to outweigh this. That's why people say there is a lack of competition in the banking sector. Like airports, health funds and telecoms, another example of right wing ideology failures favouring privatisation when it really competition not ownership that delivers the best out come for consumers and Australia.

Thanks LJ, you saved me from pointing that out, 5 years with a financial crisis in the middle of it is a poor representative sample to look at bank stocks. Although I do not think we are being ripped off, there are options and you can shop around for your mortage/term deposit, you don't have to bank with the big boys.

Not that I actually provided an opinon, well informed or otherwise Pweedas. I merely pointed out the fact that if you think banks are making too much profit then there are ways for you to gain from that, and probably are already through your super fund. I can see how my comments may not have been read in the flippant way I wrote it though, so fair enough.

For the record I have a significant amount of money in shares, none with banks. I agree there are better returns elsewhere, although the banks are not bad if you pick your cycle.

People need to understand we live in a market economy, and that economy provides the standard of living we enjoy. A public company will make as much money as it can in a given market. That is its fundamental core aim, increasing shareholder value and return. Our economy would be crap if they did not (imagine if the government ran everything!!). So blaming a company for doing what it is supposed to do is a pretty myopic.

The main issue, as mentioned already is competativeness. It is well proven that lack of competition in any market leads to inflated costs of products and services, stagnation and lack of development and innovation. The debate is whether the big banks have enough competation. I suspect not, but I don't lose too much sleep over it. I bank with whoever I chose to.

If you don't like the big 4 and their profits don't be lazy, don't be a sheep and vote with your feet. It's not as if they are the only financial instututions out there, I've just done some research (read Google ), there are 12 Australian owned banks, 44 international banks trading here, 11 building societies and 115 credit unions spread right around Oz.

As long as you don't live in a 'one ATM town' like Mark (and myself) you have the options and flexibility to bank other than the big 4.

If you don't like paying account transaction fees, get a fee free account, if you don't like ATM fees get cash out when you swipe for your shopping, if you don't know how to internet bank you should, its here and staying.

If you don't like the profits, stop contributing to them. I have 8 accounts with one of the big 4 and only pay fees on two accounts, and even then those are tax deductible.

Personally, I like the profits, I made a modest amount on bank shares coming out of the GFC, my super is starting to recover post-GFC and if the banks weren't so strong before, during and after the GFC our economy would have tanked as well, rather than slow down.

I wonder if the reserve bank and treasury discuss the relative merits of kite vs windsurf via an internet forum ?

I would rather them make a profit than go bust, as recently in sepo land.

As someone pointed out earlier in this thread , dont grizzle , buy share,s in them and stick your cash where ever you want.

GalahOnTheBay said...

^^^ Lol I can't say I have ever seen it mentioned in the RBA meeting minutes, nor have I ever seen a rates decision made that was DOW (dependant on wind)...

Now i get it.......that would be the DOW JONES wINDEX.

seafever17 said...

GalahOnTheBay said...

^^^ Lol I can't say I have ever seen it mentioned in the RBA meeting minutes, nor have I ever seen a rates decision made that was DOW (dependant on wind)...

Now i get it.......that would be the DOW JONES wINDEX.

Only if Laurie's last name is JONES