Buy Barclays

Dear Mr. Berko: I’m 77 and still mentally sharp, so I feel silly that I have to send you this email. What do you think of Barclays’ stock? I’m considering the purchase of 5,000 shares for my account. My stockbroker, who has been a close friend of mine for several years, doesn’t like the stock, and I’m not comfortable going against his opinion. He and I have been reading your column for over 20 years, and he respects your opinions. I can afford the risk, so if you like the stock, I won’t have to go behind his back to buy Barclays. — HD, Erie, Pa.

Dear HD: Barclays PLC (BCS-$8.38), founded in 1895, is a British multinational financial services company that’s more commonly known as a very large bank. BCS is home-ported in London and helmed by CEO Jes Staley, a brilliant 59-year-old American banker who joined J.P. Morgan at age 25, ultimately becoming its CEO. In December 2015, Staley joined BCS with the expectations that his impressive management skills at running JPM would be duplicated at BCS. Staley will be spending a good deal of time building capital, carefully streamlining operations, eliminating numerous redundancies, improving communications and reducing staff, all with a goal to make BCS among the most efficient and profitable publicly traded banks. Staley will sell many of BCS’ non-core businesses, including its difficult African operations. Staley will also reorganize BCS’ important investment banking operations, which in the past were poorly managed and had difficulty controlling costs. Staley is also revitalizing retail operations — including British credit cards, personal loans, individual checking accounts, wealth management and business banking — most of which were eschewed by previous management in favor of the glory of international investment banking.

Last year, BCS — with $1.6 trillion in assets, $347 billion in commercial loans and $28 billion in revenues — lost 12 cents a share. And some analysts forecast a 15 percent decline in 2016 revenues as BCS begins to exit numerous non-core assets to focus on capital costs. Meanwhile, core revenues are coming in flat, though the anticipated fallout from Brexit has been a huge yawn. If BCS earns 79 cents a share this year as Standard & Poor’s expects, then the 38-cent dividend, yielding a comfortable 4.4 percent, won’t be reduced again. And when BCS is finally free from the drag of its non-core assets, Wall Street expects better earnings in those years ahead.

I think you’re on the right track, and if a wise lady like you can afford the risk, then take a shot at it and buy 5,000 shares. BCS, as you probably know, traded in the low $60s before the market tanked 10 years ago and traded in the high $10s until late 2015, when the U.K. began making Brexit noise. BCS has over 22 million “retail” customers and over 1 million business clients. There are operations in over 40 countries, employing 130,000 people. And I think a 5,000-share purchase of BCS is a jim-dandy classic wager on a beaten-down, trashed but gilt-edged world-class security that will continue to be a part of Britain for another 100 years. I believe that in the coming decade, BCS will regain much of its previous glory, improve its dividend and trade in the mid-$30 range.

At 77 years young, a lady should not have to hide a purchase from her broker. That’s silly. Frankly, I don’t think it’s a good idea to have a broker who is a close friend. More than you know, good friendships are ruined by bad business decisions. If you can afford to risk $41,900 on a stock, you should employ a money manager to make those portfolio decisions. At age 77, perhaps it’s time to let a knowledgeable, wise, experienced and caring professional make those investment decisions for you. I’m older than you, and 10 years ago, I hired a money manager to run a large portion of my individual retirement account. And my wife and I are very pleased.

By the way, your broker may charge a $450-$650 commission on your purchase, but Schwab would charge $8.95.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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Drew Limsky

Drew Limsky



Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.