With 2008 looking like it could be a volatile year to say the least, with sectors like Banking, Financial, Construction, Household and Retail all falling. I thought now would be a good time to bounce some views around about companies that have fallen, and may offer an excellent Contrarian Investment. As always it will be about timing, and trying to identify companies that have fallen too far, and have strong fundamentals. ie will not going belly up.

I'm sure that with so many investors with various expertise imputing, we can all help each other to not making to many costly errors. And make some tasty profits, in a year which could throw up some very interesting valuations.

I will kick it off with a company called Cattles CTT. see next thread.

One of the better dividend cover is RBS with 2.4, but the concern is the acquisition of ABN Ambro which had the largest loans of low quality at risk of the European Banks, estimated at 27 billion. The problem is nobody knows what percentage may never be repaid.

I will certainly wait after the Banks to report before I invest.

RBS carried out due diligence on ABN AMRO albeit before the sub prime disaster became fully apparent. The end year bad debt provision announced by RBS in December may prove to be sufficient and the dividend may well be safe, however the dismal sp reflects the uncertain outlook for 2008/9. No doubt Fred Goodwin will have something to say about that next month.

Hopefully RBS have made sufficient debt provisions. I think the best way for me to buy in would be in three separate purchases to spread the risk. One before the Finals next month, the second after but before the dividend x date and last later. More dealing cost I know but this could be safer way in.

Posted here "....BANKS.....need for massive provisions relating to derrivative trading..."
-er, makes me wonder whether Bankers should be re.named?

Just what is it that they think is good practice? Or- is it that when the market is flat, they can create some Bonus-enhancing trades by shuffling money about?

It seems to me that Bankers that make good profits using well-established prudent principles should receive bonuses, whereas those that do a spot of profiteering on the side with derrivatives, currency side-bets and the like which effectivly are there to "hedge" a position . . . . should not.

By taking the Gains and Losses (in the prudent banking) over time the quality of an executives performance can be judged. If they offset a bad-call with some side-bet then IF that means the Bank doesn't lose money, the fact should be included in their bonus. However, if their activity turns into repeating this it should not, for to encourage such activity is against sound business principles that should have been used in the first instance.

Spitfire BDEV trading update on thursday 17th January.

Thanks Halifax will place in diary, I had a look at other House builders and will add PSN to watch list.

Citi's figures are hard to comprehend, unless I have misread them, a 4th quarter Subprime writedown of $18 billion, consumer credit costs of $4 billion which gives a loss for the quarter of $9.8 billion.

RBS seem to have been hit most today down 20p to 395p, still sidelined on this at the moment. Even though I'm looking for an entry point, I just hope that the UK banks have allowed enough in there earlier writedowns. If they have under estimated this and with the housing problems in the UK it could become fairly ugly.

Made a purchase in cattles today, probably not at the bottom, but hopefully not to far off.

I will turn my attention to RBS now, but will buy in three tranches over the next few month's to try and spread out the risk. With all the doom and gloom in the press I'm sure we will see lower prices overall, as has always happened markets are always too pessimistic and too optomistic.

Each way I look I see shares that are vey tempting Aviva being another, but I think it's best to even out the risk of buying over a longer period.

Agree but dont you think one should wait until all the US banks etc have reported?

It's risky either way, I certainly need to spread the risk over time with RBS, a small purchase before Finals then decide on when to top up afterwards. Even if dividend is halved (unlikely) it would still be over 4%.

Still sidelined but wouldn't be surprised to see a dip to 350 on on bad days ahead.

BDEV trading update pleased the market today with sp headind towards 400p, good to see that forward order book is 1.26bn, compared to 1.34bn last time, and that it has 69% of full year sales already secured, down from 74% last year.

The problem remains that any weakness or negative news in the economy, will bring an over reaction to the sp, I don't think we are at the bottom of this cycle yet.

Yes maybe better to wait on interest rate cuts to see market reaction.

Sold CTT today into the rally for a decent profit, and have put an order back in at lower price. I have decided that the markets are so volatile, that I will trade short term. Wouldn't be surprised to see another sell off tomorrow, so have buy orders in place on RBS and AV. also.

My thinking is that I want to hold these shares long term anyway, but will take advantage of these markets at this time. So even if the price may go lower I'm happy to hold a few years.

Good luck..................

BT Group, brought some yesterday for long term, 3rd quarter results out tomorrow. French Telecom reported today with very good results Turnover up 60%, which should give support to telecoms sector.

Still waiting for CTT (again) RBS, AV. VOD,

Have a feeling we will be testing recent lows soon.