texalope

This Rally Smells Fishy to Me

I disagree. Banks borrow short and lend long. They are making money every day. Retailers business is improving. Housing has improves. Check out the recent Hovanian conference call. Looking in the rear view mirror will not make money for you. In 2007 the people looking through the windshield made money. The same holds true today.

Buffett's Financial Bets

If muni bond insurance is so dangerous, why is Buffet selling it. He said 77% is in a second position and he's being careful. How can you be careful? He's humasn so maybe he's talking his book. After all, MBIA is about to start selling again.

Buffett's Biography: Is Goldman Sachs the New Salomon Brothers?

I suggest you read " The Culture of Success" to learn how Goldman has navigated 100 years of ups and downs to help you put the current situation in context.

Also, you can read the " Intelligent Investor" . One of the chapters trace the ups and down of 4 different businesses over a period of time.

My opinion is that all businesses are cyclical. The cycle presents an investment opportunity for investors with a time horizon that exceeds the daily newspaper headlines.

The Financial Crisis: Getting the Best of Warren Buffett?

By the way, Buffet has made it clear the warrants were more or less a throw in by Goldman. They were not material to making the deal. He got a 10% yield in perpetuity on his investment unless Goldman decides to pay off the debt. In that case he'll get an additional year's worth of interest= 500 million, not chump change.I call that a very good deal, especially for a company that has cautioned future returns will not equal the past because their size and amount of capital functions as an anchor. Their ability to deploy large amounts of capital for outsized returns was limited. However, the worm has turned- financial events have presented opportunity and Buffet has sprung into action by deploying large amounts of capital for expected outsize returns.

The Financial Crisis: Getting the Best of Warren Buffett?

You clearly don't understand Buffet's modus operandi. In the super cat business they make large bets against the possibility of cataclysmic events. It's hard to quantify potential exposure and the probabilities but the business has proven to be exceptionally profitable. There are few companies capable of competing and consequently premiums can be steep. His bet on the future of the S&P Index is based on over 100 years of steady climb. It's foolish to extrapolate that current events are more than a temporary turn relative to the future. In the interim he's collected 5Billion in premiums to buy cheap assets that will likely be worth considerably more in the future. I wouldn't bet against Buffet's judgement in the longer term. It can prove hazardous to your wallet.

Goldman Sachs: Back in the Crosshairs

Your conclusions are a calculated guess which I would define as a bet. There is no logic to call this an investment.
As a betting man I see the logic.

Time to Discard Price/Book Ratio When Evaluating the I-Banks

Earnings in the IBanks are very lumpy. It's not like selling coke or cereal.
Using a P/E is very risky. Right now, net worth is questionable. There are some assets which may be undervalued too.
I submit that it is impossible to really value these companies at this time. Notwithstanding this, I am an investor in GS because I like owning this kind of business . I like their long term prospects and I feel the stock will reflect their true value over time. If you study their history you quickly recognize this company is a survivor of all kinds of investing climates. They have always attracted superior management that capitalizes on the situations presented to them.
I'm comfortable accepting this as the basis of my investment.