Rubbish theory makes RBS a buy

I know I have been banging on for months, since the shares were 316.5p when I first made them a sale, about how Royal Bank of Scotland (RBS), was totally bust.

Paradoxically this desperate weakness may now make them a buy for investors who like to take the occasional wild punt in stock markets.

The shares are a classic for my rubbish theory of investment. This says that some of the biggest capital gains come from buying investments at the moment when  they are perceived as absolute rubbish.

RBS fits the bill in spades on that score. The shares touched their absolute low of 10p on 19 January when investors were convinced that the only way out for the bank was the Northern Rock solution, nationalisation leaving shareholders with nothing.

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