Bank of Ireland shares

What amazes me is that so many of these folks have a capital loss tax shield that they are clearly not utilizing…..based on the 2008 madness….many might have I dunno 10k or 20k of capital loss to crystalise that they could then utilize to shield capital gains moving forward….but once bitten twice shy….I'm sure many gave up on equites after 08 debacle ("its a racket").

After all was said and done the Government owned 36% of BOI….so dilution for say a 2007 vintage holder wasn't quite as good as 14%…..but the real killer…like in any bubble but especially in bank stocks……..is you buy at cyclical peak at some crazy multiple to book value because RoTE is just so good it justifies it……and then you get hit with share price decline as reality sets in….which probably accounts for perhaps I dunno….80% of the loss a 2007 vintage BOI saw in their holding…and then cause the bank is in trouble its trading below book….and then all of sudden they're forced to raise equity way below book which leads to horrendous dilution to existing holders….

As you can see below…….2007 BIRG buyers started paying 3 times book for the bank!!!!!! 3x times book!!!!!………the government when it had to come to rescue was buying into the bank WAY below book….and this was being kind……NAMA was effectively overpaying at the same time for lots of the banks NPL books…which functioned as another defacto bailout to whatever equity value was left in the banks themselves……BIRG was the tallest midget for sure….but in retrospect there was too much emphasis placed on keeping AIB & even BIRG trading in the market…..NAMA was somewhat of a cutout for the reality that the Irish government had to privatise the whole Irish domestic banking system and probably should have done so as opposed to looking for the optics of private market capitalism by allowing Prem Watsa and Wilbur Ross to provide PR cover to the bailout while running away with billions of the upside that could have acrued to the State.

Hindsight is 20/20….so think the sub-optimal situation occurred above due the fact that situation just kept deteriorating and policy makers were stuck with decisions they had made when things appeared less bad!

Fun fact that I'm sure some journalist will pick up on soon.

On April 20th, 2020…..Bank of Ireland's mkt cap dipped to €1.46bn.

Fast forward to today….and if you take the announced 2024 buyback of €350m….then add in the 60c dividend being paid out today actually which amounts to I think about €800m being sent out the door….and then take the bank on its word of likely paying out another interim dividend later in the year of perhaps as much as 30c per share.

Thus, the total capital return to shareholders for Bank of Ireland in 2024, including the buybacks, final dividend, and interim dividend, would be approximately €1.474 billion…which you could have bought the whole bank for back in 2020.

It's a lesson to NVIDIA buyers at today prices etc…….buying when everybody else is feels safe….but its about the most dangerous thing you can do….2007 BIRG buyers were in the herd also and felt safe cause everybody around them was doing it……April 20th, 2020…..it felt very scary to be buying BIRG.

The following heuristic haunts my day to day investing decisions….and its a simple flow chart of financial markets actions in action….Innovator>Imitator>Idiot.

The first two make money……..and idiot gets wiped out….in most any situation I think you should ask yourself when buying into a situation where you sit on that continuum.

Good work! You took a calculated risk and got your reward….not 100% clear in 2020 that everything would be OK and you got paid to take that risk

Is there any indication of the 2024 dividend?