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Barclays Walks a Stock Chart Tightrope

March 24, 2023

Every day seems to bring news of a new bank facing evaporating confidence. The latest is Deutsche Bank. When last seen the shares were down over 14pc on the day.

“We are still on edge waiting for another domino to fall, and Deutsche is clearly the next one on everyone’s minds (fairly or unfairly), said Chris Beauchamp, chief market analyst at IG.

IG, 24 March 2023

Deutschebank in the wars

If you ever thought of buying shares in a traditional mainstream bank take a look at this chart. What a rubbish investment shares in Deutschebank have proved to be and so far from becoming cheap as a result of all this share price misery now the bank is battling for survival.

Barclays has a scary chart

If this chart breaks down from here there will be wailing and gnashing of teeth in the banking halls of England but as an investment Barclays has been rubbish for years. It is so obvious that as investors we need to look to the future, not the past.

Banks nil: techs 10

If this was a football match old style banking is a disaster area whereas in the area of technology there is so much to be excited about. Yes, there has been a dramatic sell-off in some erstwhile hot tech stocks but that is more about valuation than trading performance. Shares went from being valued at five times sales to 20 times sales, or even more, and then back again. Many will have their day in the sun again and there are a host of technology shares that are doing well based on strong underlying corporate fundamentals.

You just have to think about AI and the companies making that happen or best placed to benefit because it is happening. The technology revolution is a work in progress and if an unfolding banking crisis drives tech values down they will often be buying opportunities though I prefer to see the charts positive before jumping in to buy.

Questionmarks over the whole concept of a mixed economy

Maybe this is just me but I think we have ample evidence that Adam Smith’s invisible hand working its magic in a free flowing capitalist economy delivers great results whereas the mixed economy with health, policing, fire services and so much else in the hands of bureaucrats and pay decided by endless battles between unionised workers and the government is a hopeless way to proceed.

The banks are regulated out of sight but does that make a difference; apparently not. If only this hidebound old country of ours was ready for the breath of fresh air that Liz Truss tried to provide. If it was me I would privatise everything in sight. Why not, for example, sell the NHS to American insurance giant, UnitedHealth, they would soon start to sort it out and it would cease to be a political football.

The police, don’t ask. I have thought for years that the British police force is a complete joke, just not a very funny one. My first move would be to sack every officer who is not prepared to (a) go on a diet and (b) go to the gym. Obviously all the racists, misogynists and homophobes would have to go, preferably straight to jail without passing Go. We would end up with fewer police, much better paid and able to at least make the attempt to catch the bad guys instead of being the place where bad guys go to hide.

If we do all this we could then shrink the bureaucracy and maybe start taking decisions closer to the people and places that are going to be most affected.

We could also make a bonfire of taxes. It is so obvious that we should be the lowest taxed country in Europe, not one of the highest and inheritance tax should be abolished immediately as a statement of intent. I would have a long hard look at stamp duty too. What an injection of liquidity that would be for the housing market if it were to go. If we are not going to do things like that what was the point of Brexit.

Let the government go bust. Who cares if we get the country booming and if we did the government wouldn’t go bust.

But none of this is going to happen. It is so sad and so frustrating. London could be the buzziest place in the world with just an iota of imagination by the people in charge of the city and the country. I thought Boris might do it but it seems he was too busy partying.

Rishi – my last little dream is that after the sobersides start he is going to go into the next election with the sort of budget that Liz Truss attempted, something to get the adrenaline moving and not just another yawn.

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