any comments, thoughts, on this stock.

Well while you have all been chatting about the rights and wrongs and what is or isnt gambling, I have been pondering speculation and investment by reading some weekending press on the more delicated subject of NRK:-

FT mentions that Philip Richards of RAB Capital (now owns 6% of NRK) has called on institutions to stop lending out stock to force shorters to buy back stock. He also said that if the Bank were forced to hold a fire sale the value of equity would be destroyed only for the shorters then to move on to another subject. His views were supported by Manx Capital based in Isle of Man which bought just under 2% last week.

FT -money section mentions that NRK will refund penalties and charges incurred by savers who have withdrawn money if they are prepared to re-open their accounts and reinvest the same sum. However, ISAs will lose their tax advantage if the sum was withdrawn and not transferred to another provider.

Business Magazine- infers that the Bank can survive but the best it can hope for is to "resume life as a pebble".
Under separate comment, it mentions that National Australia Bank may be a potential suitor. Its CEO was former head of Woolwich. NAB also owns Clydesdale and Yorkshire banks. It goes on to say that although NRK may not be ideal to fill the gaps in the Clydesdale/Yorkshire footprint, NRK does have a significant share of mortgage market and successful online savings franchise.

Seen various mention about Darling intending to extend 100% backing to the first
100,000 in savings with any bank or building society.

I have not bothered with any political aspects as they do not deserve comment.

Please add any other comments seen which you think is of factual interest. Gus

That was the week that was.

Well that was an interesting week to go away, just back from Turkey and didnt read any news when I was away, I regretted not buying at 450p last Friday week before going away what a close shave that was.

Is it a punt now or have we all given up.

No, don't worry you have not missed all the fun. This one will run awhile yet. Plenty of blame, scapegoats and political intrique. They will be writing a book on this one day, not to mention a film!

Cynic,

I didn't say it was not gambling, just that it was a lot less risky, you could say it is gambling in slow motion with plenty of time to cut your loses unless you are a day trader. Look at the chances SEO holders had to cut and run.

Gambling is betting on the outcome of an unknown event, which could either lead to a profit, or loss of your entire stake. Investing is betting on the future of a share which may lead to an increase or a decrease in the money invested. One is a "win or lose all" at a fixed point in time, and the other is a "gain or lose some" over a rolling period of time. Both involve research, and I suspect (don't gamble so I'm guessing) that the disciplined are more successful than the undisciplined. The last point is probably where the synergy lies between gambling and investing. Gamblers and poor investors fall in love with the feeling of winning (a rising share price) or a successful bet, but don't know when to stop or cut their losses when they're losing (or profit is falling). If you are undisciplined and have no targets or goals with your investments then you are essentially gambling your money. The only difference is your money will dwindle over a long period of time instead of completely dissappearing in one hit.

In my opinion anyway...

Strawbs.

You have all missed the point that for many people and funds buying and selling shares is about investing in the future perceived growth of companies in anticipation of sharing in their profits. It is not gambling!

"perceived growth" = hoping for the best as do all gamblers!

Guscavalier.
Interesting read. thank you.
My only factual statement, not yet covered is to comment that ALL lenders have now virtually withdrawn from anything other than prime lending.
Not factual anymore, but this leads me to believe that all major lending institutions are facing similar problems to NRK, albeit on a smaller scale.
Industry sources are advising me that this will persist at least to the new year, with the more optimistic saying normal service will start to resume in the mortgage and loan market no earlier than March, even if November sees a significant cut in BoE base rate.
If this is the case, then bank balance sheets may look healthier but next years P&L may be a bit off colour. The entire sector looks a little bit of a gamble at the moment, for we do not really know how far the inter bank lending crisis has dug into the pockets of other banks. All we know is NRK breached FSA liquidity rules. Other banks could have come within a farthing of that, and we will never know, but that hardly makes them an inviting investment.
On NRK, I have chosen to keep out. If it gets around the 150p mark, I might revisit my choice.
Alan

This is too much intense debate on NRK we all know that if some one comes sniffing around for a takeover this will head north sharply to 400-500p even on a rumour of a takeover.

The only debate should be where is the bottom.

much obliged for your comment hewittalan6. Sorry driver - should have realised that it would be too taxing after the Turkey trip

Janet. Interesting article. I think day trading is addictive. Feelings can be similar to supporting a football team (Fever pitch) with all the highs and lows. The fact that you admirably admit to losses on Nrk is healthy for you, many others implode. I lost a 4 figure sum shorting the Dow last week unable to believe that it could climb higher with oil at 80 dollars, housing in freefall potential war with Iran etc. but the market can remain irrational longer than solvency as they say especially with an interest rate drop! I think DMA access reduce those scary losses as much of the fall happens during the auction ie with partygaming so if you can off load then it helps!

Doesn't look good if true.

Telegraph: Hedge funds plot Northern Rock Raid

The Times: Banks Shun Northern Rescue

Strawbs.

Good read, Strawbs.
For my part, I think the more likely end result for NRK is a fire sale of its mortgage book, or at least a large part of it at a knock down price to secure its liquidity.
It can do this if it sells the more profitable areas, such as its lifetime trackers and equity release products, and its higher rate 100%+ products.
These would be more attractive to potential suitors, particularly if rates look to have topped out. It would retain its less profitable, but more secure long term fixes and the cash realised would saisfy liquidity requirements.
It would then retain its deposit business and its Internet model too, and continue by providing loans and mortgages based on its sub prime model of brokering other peoples money.
This should be acceptable to every party, investors, depositors and government and allow them to continue as what NRK always was, before its delusions of grandeur. A provincial bank.
BTW. One company who do not seem to be mentioned who I think may have a sniff at NRK is Lehman Bros. I admit they are no bank, but they have had very close links with NRK and are known to be very keen on the UK securitisation market at prime levels. If they were to be seen with a major bank interested in NRK deposits, that might be a sign of things to come.
All IMO.
Alan

I think the most telling part (if true) is how many big banks have avoided bailing out Northern Rock. It shows how much the climate has changed. I'm sure they, and private equity, would've been fighting each other a few years ago for the business. Now anyone in trouble is left to sink or float on their own.

Strawbs.

NRK's mortgage lending model was "built on sand" they have only 70 branches. Just imagine if say BARC or HSBC with their thousands of branches had copied them the mess we are recovering from would have been huge.All along sensible lenders saw the danger inherent in NRK's lending strategy even if the FSA didnt.

It does not look good; it will be heading lower this week.

"The Bank of England has been trying to get someone to make a bid with no success at all this week," said one market source. "The easiest thing to do is to buy a lot of the assets. It's much more likely to happen this way."

If you queue long enough you will grow weeds.

Driver,

Shouldn't that be:

Suspected hedge fund man seen outside potential target

Strawbs

Press has not been favourable, I agree, but this Company has shareholders and I think that we are now more likely to see NRK trying to soldier on. I grant you that the background to the financial and housing markets leaves much to be desired but, I do not think shareholders are ready to be stripped by aggressive Hedge Funds taking assets at a distressed discount. As mentioned in previous posts RAB Capital have 6% and the Manx outfit have bought 2%. This may well develop into a battle of the Hedge Funds with others buying assuming the sp weakens. Moreover, there would be political fall out with over 6000 currently employed by NRK especially in Labour territory. My 212p purchase price looks excessive at present but, I think we will see a good few twists and turns to come yet and am not totally despairing about what the newspapers say.

Guscavalier
I agree it could turn out to be the best recovery play this year.

Strawbs
Nice one.

short term play is much more difficult to call ...... knee-jerk reaction is that sp will again dive tomorrow, but sometimes the obvious is overturned by events and a recovery, perhaps very short, will happen instead as some bears take profits and/or sp is forced up to encourage more sellers.