James Cullen

4 Reasons Why Banks Will Keep Getting Stronger

There's a lot of arm-waving here. Maybe these guys have some facts, they're just don't feel like sharing them. Um hm...

Industry Observers: Shouldn't Something Finally Change at Citigroup?

Long Islander,
This is an observation from a number of people I've talked with; Tom Brown and Vernon Hill were the most recent and were willing to go on the record.
I saw Vikram Pandit was talking about the need to overhaul and simplify the world economy; what about his own company? Put differently, who thinks Citi has credibility -- many will say no, who says yes?

Doug Kass's Killer Shorts - Barron's

Isn't it possible that his #2 point - avoid stocks already heavily shorted - precluded him from shorting many of the most troubled companies?

I'm not saying it worked this time, but in general he seems to be looking for a "variant" view (he often uses that term)... in this case, where there's minimal chance of a squeeze. Part of it is risk management....

Bank Bailouts and Trust Preferreds: Still Too Much Risk Here

Chrispy,
I'm not sure I understand what you're saying. And are you differentiating between preferred stock and trust preferreds (i.e. subordinated debt)?

Bank Bailouts and Trust Preferreds: Still Too Much Risk Here

Citi's trust preferreds are up about 25% today... it isn't so much the risk that stopped me from buying, as it is the expected long-term returns at current prices. Still, a very good trade for those who have it on.

The Wisdom of Convertible Securities

quantumonline.com is great for information, but getting the actual quotes is more of a trick because each site/broker seems to have their own way of inputting it. Try, for example, BAC-PL on Yahoo Finance.

Component Returns for the Financial SPDR ETF

The data might have jumped, but the theme hasn't. Bank stocks are an enormous gamble.

The Wisdom of Convertible Securities

Srdjan,
This is part of a series, and in the prior part convertible arb (buy the convert, short the common) was mentioned. This was the explanation of how to value the convertible; I'll have an update posted soon looking at the trade as a whole.


On Jan 06 05:30 PM Srdjan Popovic wrote:

> Correct me if I am wrong, but you can hedge this position by simultaneously
> shorting 20 common shares at $14.60 for each convertible share and
> de facto making one time payment of $349 for continuous annual distributions
> of $72.50.
>
> For a company of this stature, assuming there is no bankruptcy at
> the horizon, in all likelihood it should be a good deal.

American Express Calls Investment Banks' Bluff

A few of you need to lay off the Visa kool-aid. Just because Visa (and MA) don't hold debt, doesn't mean they aren't dependent on the ability and willingness of their issuing banks to continue lending.

The Financial Light at the End of the Tunnel?

I don't think you should lump American Express in with the credit card "loan sharks" - they cater to the affluent, and aren't like a Capital One...

Bank of America: Earn 6.5% While You Wait

And I mean that, of course, in the most constructive way possible - but to make a further point, I just think that given the present environment, it's foolish to use inductive reasoning (i.e. they've "always" raised their dividend) to suggest the same will hold in the future. While I don't anticipate a dividend issue at BAC, I do feel playing the role of Devil's Advocate/Meredith Whitney is a useful exercise.

Bank of America: Earn 6.5% While You Wait

These are the kinds of things that should go in your article. Leaving them out makes me question how well-thought out your thesis really is.

What Tuesday's Wild Trading Says About Housing, Financials

Tony,
I think a buyout is a possibility, but not enough that you should be buying the stock only looking for a quick pop on such news.

My figures are similar enough to Morningstar's that I'll say I agree with them - my last estimate for fair value is about 10% above theirs, and I think USG is a good stock to buy now for long-term investors.