Author Topic: What are you buying today?  (Read 2196052 times)

ourkid8

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Re: What are you buying today?
« Reply #330 on: February 02, 2014, 08:04:33 AM »
Don't forget, C has about $2B in preferred which they can call.  I am assuming those will be called as part of this CCAR results as they have been improving their funding model. 

Tks,
S


frommi

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Re: What are you buying today?
« Reply #331 on: February 03, 2014, 08:25:06 AM »
More Lukoil

PLynchJr

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Re: What are you buying today?
« Reply #332 on: February 03, 2014, 09:25:39 AM »
PM

LowIQinvestor

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Re: What are you buying today?
« Reply #333 on: February 03, 2014, 09:51:59 AM »
IBM @ $173.70

ERICOPOLY

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Re: What are you buying today?
« Reply #334 on: February 03, 2014, 10:06:40 AM »
I honestly don't know.
It use to sell at multiples of book value but that won't ever happen again.
It probable sold around the same multiple of bac and jpm pre 08.

It sold for about 10x earnings in 2006/2007.  I remember this well because Bill Miller was spotlighted in a Morningstar article/interview where he was saying that if he wanted to own a commodity, it would be "C".  Commodities at the time were hot and he thought he was clever buying C because of the low P/E.

Banks like C and BAC today achieve their earnings with far less risk compared to then, and consequently I think there should be a risk/adjusted increase in the market P/E for the same dollar of earnings. 

The market will value banks based on earnings, not book values, and they will assign a P/E based on what amount of risk achieves those earnings.

So far the biggest risk I've seen for a bank is the dilution risk (that is, if they can even raise capital -- I'm talking about the risks to the banks that don't completely go under) -- most of the hit to C and BAC's stock price since 2007 has come from dilution, not loan losses (helped by the fact that "bailouts"/intervention let them survive).  So now that they hold a lot more capital (and they are forced to do so by the regulators), that risk is massively reduced.  Needless to say, their funding models are also much cleaner (greater reliance on deposits instead of wholesale funding and LT debt).  And risk has been reduced in many other ways (better terms on loans, better collateral backing RE loans).

Nobody can argue that $1 of earnings achieved in a high risk manner will get the same market multiple as $1 of earnings achieved in a relatively far less risky manner.
« Last Edit: February 03, 2014, 10:11:36 AM by ERICOPOLY »

wescobrk

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Re: What are you buying today?
« Reply #335 on: February 03, 2014, 11:47:11 AM »
I should probably turn my Ira over like Eric.
Watching citi everyday is distracting me from my work.
Down every day for two weeks. About 16 percent discount to tangible book.
New ism number out and below expectations.
Dimon, Moynihan, etc all think 3 percent GDP this year. IMF thinks global growth will increaese. disconnect to everyone saying economy is improving with 1200 point sell off in last couple of weeks.

ourkid8

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Re: What are you buying today?
« Reply #336 on: February 03, 2014, 12:48:43 PM »
My friend, stocks go up and down and take time for the thesis to play out.  Right now we seem to be in the middle of a correction so this is the perfect opportunity to load up!

"The big money is not in the buying and selling but in the waiting. " - Charlie Munger

Tks,
S

I should probably turn my Ira over like Eric.
Watching citi everyday is distracting me from my work.
Down every day for two weeks. About 16 percent discount to tangible book.
New ism number out and below expectations.
Dimon, Moynihan, etc all think 3 percent GDP this year. IMF thinks global growth will increaese. disconnect to everyone saying economy is improving with 1200 point sell off in last couple of weeks.

ERICOPOLY

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Re: What are you buying today?
« Reply #337 on: February 03, 2014, 02:51:33 PM »
Hey, don't feel bad about owning Citi today.  At least you didn't own Berkshire (down slightly more than Citi).

MBI did great though.  Some analyst mentioned that Puerto Rico downgrade won't be so bad.

alertmeipp

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Re: What are you buying today?
« Reply #338 on: February 03, 2014, 06:36:25 PM »
Today, C out-performed BAC, this happen rarely, as u know, BAC is considered a must have for many funds now.

alertmeipp

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Re: What are you buying today?
« Reply #339 on: February 03, 2014, 07:18:49 PM »
FTP.TO and SHLD.
Closed out VXX, still holding some SPY puts.
Don't think the world is ending. In contrast, we are in growth mode based on some of recent #s.