Seeking Alpha

Shailesh Kumar

 
View as an RSS Feed
View Shailesh Kumar's Comments BY TICKER:
Latest  |  Highest rated
  • Why Would Treasury Cut AIG's Interest Payment? [View article]
    Ah Felix, you are assuming that the government is interested in holding on to AIG for long! This doesn't make sense. I think they want to make it possible so the government is able to get out of this investment as quickly as possible, with profits, and with a stronger AIG in the wake
    Nov 7, 2008. 02:15 PM | Likes Like |Link to Comment
  • Understanding Brookfield's Malaise [View article]
    Nice writeup on Brookfield. This is one of those core holdings that you buy once and hold on to as long as possible (as long as the corporate model/philosophy stays consistent).
    Aug 18, 2008. 01:19 PM | Likes Like |Link to Comment
  • American Express Calls Investment Banks' Bluff [View article]
    Your article is confusing

    It is not impossible to have the following two things occuring at the same time:

    1. Individual consumers are stretched and are having issues with their credit, including the super credit worthy ones. This is what is affecting Amex and,

    2. Asset valuations at the banks for the mortgage assets (created in the past) have been marked down significantly and there is not much markdown left to take. Additionally, the investment banking activitiy may have picked up in pockets. The banks are also restructuring and disposing off assets, etc. Additionally, some consumers may be pulling their deposits out of Indymacs of the world and putting them at Bank of Americas of the world. Therefore it is quite plausible that some of the banks had a better quarter than what the street thought and the things may indeed be improving for some of the banks. In fact, as liquidity continues to come back in the market, you may find a lot of previously marked down assets written up as the market begins to be able to price them

    You are comparing apples and oranges and jumping to conclusions
    Jul 24, 2008. 12:18 PM | Likes Like |Link to Comment
  • As Merrill Reports, Short Squeeze in Financials Continues [View article]
    Regarding your last observation on the panic buying failing spectacularly, you may be right. I would also like to add to this: Financials today offer spectacular values to long term investors.

    It always boils down to whether you are a short term oriented trader or a long term oriented investor
    Jul 18, 2008. 12:05 PM | Likes Like |Link to Comment
  • Why I'm Committed to the UltraShort Financials ETF [View article]
    Hmmm Mr Lathrop, you talk about fundamentals of the sector but you do not care to discuss valuations. You may be right but only because you have short term outlook. Long term investors might wish to consider this as an excellent opportunity to buy
    Jul 16, 2008. 11:32 PM | Likes Like |Link to Comment
  • Predicting the Financial Sector Rebound [View article]
    Well written. I would be wary of shorting any financials right now. Some sense is coming back to the credit markets and it will not be long before some of the companies start writing up their assets that were written down too far

    In any case, all this is relevant only if you are looking for the short term. Longer term, financials are terrific values right now. I can't see a world where financial sector is not relevant, neither can I see some of the premier names today disappearing.
    Jul 1, 2008. 10:15 AM | Likes Like |Link to Comment
  • How To Buy a Bank (and Other Beaten-Down Stocks) [View article]
    Loved the analysis. I have been aggressively buying financials over the last few months including C, BAC, CFC and WM and have written quite a bit on this on my blog. IBN and RBS look intriguing so thanks for the tip
    Apr 28, 2008. 11:53 AM | Likes Like |Link to Comment
  • WaMu: WSJ Backs Up My Sell Recommendation [View article]
    I don't understand your sell rating. A stock that is trading at such a discount to its intrinsic value cannot be a sell, unless you have a reason to believe that the company will go bankrupt. As DSX Lover states, if management is an issue for a company like this, it will be replaced

    Even worst companies can be a good stock buy if priced at a sufficient discount to its value. It is heartening to see institutional investors getting caught up in the sentiment of the day and not take a long term view. That means it is still possible to get market beating returns for a savvy investor
    Mar 6, 2008. 10:56 AM | Likes Like |Link to Comment
  • Will BofA Really Buy Countrywide? [View article]
    The deal looks bad if you cannot think beyond the present time. It would be a stretch to imagine that the mortgage market will remain in dumps forever. People will start buying houses. Do you think BAC should wait until the market comes back up, Countrywide gains marketshare and profitability, and then buy Countrywide for $50 a share? Why would Mr Lewis make such a boneheaded decision?

    Yes, there are risks in this acquisition, but nothing that Bank of American can't fix by supporting this in the short run with additional capital. Once the market stabilizes, this should be a huge score for BAC. One forgets that Countrywide was (or maybe still is) simply the best mortgage company in the country. You also forget that BAC has been a growth oriented company and is now hitting a limiting factor in its growth (deposit accounts cap) and buying Countrywide is probably the best way for them to continue growth. Sure they can acquire internationally and they will probably do that but as a shareholder I sure as hell hope that they do not let this golden opportunity to get Countrywide for a pittance go by

    You did the right thing by buying BAC stock, but for the wrong reasons
    Mar 6, 2008. 10:48 AM | Likes Like |Link to Comment
  • BofA/Countrywide Merger Arbitrage Opportunity [View article]
    As if you read my mind! This trade has been discussed quite a few times in several blogs (links below) and I have to say that this offers a very interesting case study

    www.arohanvalue.com/20.../
    www.arohanvalue.com/20.../

    And also,
    tradinggoddess.blogspo...
    www.princeofwallstreet.../
    Mar 3, 2008. 04:15 PM | Likes Like |Link to Comment
  • Lumber and Forestry Companies: Building a Better Future [View article]
    I own Lousiana-Pacific. Although it has negative earnings, it has cash on the books to the tune of better than 50% of its market cap and sports a P/B ratio of 0.61. It mainly serves the construction market and has been badly affected by the housing downturn. The question is, whether it can survive long enough to see the housing market come back? The company currently continues to restructure and reduce cost and with 532million in cash on the books I believe that it has the stamina to outlive the housing/construction downturn. With the stock already reflecting the worst case scenario, it is a good buy right now for someone patient enough to wait a few years. The dividend also helps while I wait

    jjason, I don't know if this provides enough data to make an intelligent investment decision but atleast this should be a trigger for starting your due diligence. There is some more discussion on LPX on my blog that you are welcome to read
    Mar 3, 2008. 04:06 PM | Likes Like |Link to Comment
  • Financials: Insiders Buying on Consistent Basis [View article]
    Thanks Todd for a good summary of how many value/vulture investors think that the financials are very good buys right now. I have been advocating my readers to start buying financials for some time on my site (www.arohanvalue.com) as this may be an opportunity that one finds very rarely for some outsized gains
    Feb 18, 2008. 01:38 PM | Likes Like |Link to Comment
  • Pundit Failure: We Are in a Bear Market and This Is a Recession [View article]
    Good work. I have been insisting that the recession is here for quite some time now in my blog (www.arohanvalue.com). Needless to say it has generated quite a discussion

    www.arohanvalue.com
    Feb 13, 2008. 03:20 PM | Likes Like |Link to Comment
  • BofA/Countrywide Risk Arbitrage Opportunity [View article]
    Agreed that CFC is trading at a discount to its deal closing value even after adjusting for tvm and this is a very good strategy for above market returns in a short time frame with very little risk.

    However, as a long term investor who views BAC as a great company to own for a long time and who also views BAC to be severely undervalued at this time, buying into Countrywide today actually gives a way of acquiring BAC stock at a discount to even the depressed stock price today. I am inclined to just buy CFC, let the deal close and convert to BAC stock and just let it ride

    Another thing to consider. CFC has a larger dividend yield than BAC today (10.9% to 6.9%). Also the deal does not seem to have a provision to adjust the exchange ratio of shares if CFC pays out dividends in the interim. If CFC does not cut its dividend, it would appear to me that buying CFC today, and reinvesting its dividend would actually get you more BAC stock for your CFC shares at the deal closing than what was announced. Of course, this difference in dividend yields also helps in the risk arbitrage strategy you discuss as you get a net payment for 2-3 quarters in dividends just to maintain your position and do nothing.

    I am surprised as you are that this kind of mispricing exists, but in todays volatile markets anything is possible

    www.arohanvalue.com
    Jan 22, 2008. 04:55 PM | Likes Like |Link to Comment
  • Jim Cramer's Mad Money Lightning Round, 1/16/08: Countrywide Recession [View article]
    Why would you sell Countrywide now? Does Cramer think that Countrywide will go bk before the acquisition by BAC closes?

    www.arohanvalue.com
    Jan 17, 2008. 12:54 PM | Likes Like |Link to Comment
COMMENTS STATS
101 Comments
0 Likes