As i stated in a previous blog we have held Lloyds several times in the last 6 months. We effectively noticed that the price would cycle with the bad news from a low of 30p to i high of around 36p. A very nice 20%. Being small time we struggled to catch the peaks and troughs but managed to buy low and sell high enough to earn 10% each time. We always re-invested only the original stake and placed the profit in our cash reserve, so we ended up earning 30% on our investment in around about 4 months. We stayed in to long though just before Christmas we bought back in at what we believed was a new low. Subsequently the price dropped further and we were about 10% down. We have now recovered this and are well on our way to 10% up again.

Our current thinking is to get out once we get to 10% as even though the bad news does seem to have dried up somewhat, we believe the price will remain suppressed for some time. The market has factored in that the government have a large share holding and we won’t see triple figures until that stack is released to private investors. So its a good long term prospect but its one that we don’t have to buy now. We can use our funds on hopefully more productive stocks and leave Lloyds for a later date.