Financials: The Dangers of Zero Weight [View article]
Ultraman, the easiest take away is that these are panicked times so a departure between perception of value and the real value seems very plausible. Look at foreclosure stats. They have skyrocketed but the percent is still tiny. What I think the 0.22 acknowledges is the need to deleverage right here right now for the firm in question to restore (or try to anyway) capital ratios. I don't know when but at some point $0.22 will turn out to be a great price.
Bluedog, in 1990 Citi bottomed out around $5. From 1990's bottom to mid 2000 the stock went up 3000%. The first 30-50% off of the $5 bottom meant nothing. While I would not bet on 3000% again if a bank stock goes up ten fold in the next ten years will buying at $30 versus $20 matter?
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Ultraman, the easiest take away is that these are panicked times so a departure between perception of value and the real value seems very plausible. Look at foreclosure stats. They have skyrocketed but the percent is still tiny. What I think the 0.22 acknowledges is the need to deleverage right here right now for the firm in question to restore (or try to anyway) capital ratios. I don't know when but at some point $0.22 will turn out to be a great price.
Aug 01 12:24 pm
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All Comments by Roger Nusbaum »Financials: The Dangers of Zero Weight [View article]
Bluedog, in 1990 Citi bottomed out around $5. From 1990's bottom to mid 2000 the stock went up 3000%. The first 30-50% off of the $5 bottom meant nothing. While I would not bet on 3000% again if a bank stock goes up ten fold in the next ten years will buying at $30 versus $20 matter?