Raw Greed's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/117069/comments http://seekingalpha.com/article/122520-are-u-s-banks-really-worthless?source=feed#comment-402620 402620
"given the leveraged nature of a bank, significant losses in its portfolio of assets -- in this case, 11% of total assets -- can very quickly result in negative equity"

We only know an approximate degree of how leveraged banks are.

There is already a problem of transparency in the products held by banks. There is a fear of what else might be hidden. You have to remember that many of these products were spawned by a structured products industry that simply didn't exist. These packaged derivatives have all kinds of clauses that can very quickly lead to cash calls and erosion of your NPV.

So the first problem is how to absolutely quantify the total value of these bad assets. Do you use the last mark-to-market value? Average historical prices? Also not every bank wants to come clean about these assets since some of the risks they took are borderline illegal. Full disclosure will involve government intervention and assuredly something bad is bound to come up. Just look at the very simple example of hidden expenditures tied to structuring fees for these products. Which bank wants to get their name out there? That's why this is taking so long to sort out.

So your theory states that "All troubled legacy assets are placed in a special portfolio of non-performing, non-earning assets that have to be charged off over time." In my comment above, it's never going to be "All" but rather "Some". That figure is never likely going to be fully trusted either.

The second problem with your idea is the backbone of your article.

"An ROA of 1.1% is applied to the performing earning assets, after charge-offs from delinquencies in these assets. The ROA on earning assets is conservative, given that many US banks have historically achieved ROAs of 1.2%-1.4%."

What if there were flat to negative ROA figures? Banks will never be what they were for the past twenty+ years. If you take away or minimize structured products, investment banking and broker/dealer operations, what you are left with is the brunt of earnings dependent on consumer and commercial lending. Remember twenty to thirty years ago we didn't have structured products or investment banking operations on the scale that we've had in recent decades. Some of these things (CDS, ABS etc.) didn't exist 10 years ago.

Assuming there is government intervention and forced lending to the public. Your comparison to Japan becomes increasing valid since we are throwing good money after bad. You are lending money to an American public that has a savings rate of 1% and no driving industry or growth in sight. There's no biotech boom like the 80's, .com boom like the 90's, or structured finance boom of our current decade around the corner. We are likely to face Japan like conditions of flat growth.

]]> Wed, 25 Feb 2009 08:31:44 -0500
"given the leveraged nature of a bank, significant losses in its portfolio of assets -- in this case, 11% of total assets -- can very quickly result in negative equity"

We only know an approximate degree of how leveraged banks are.

There is already a problem of transparency in the products held by banks. There is a fear of what else might be hidden. You have to remember that many of these products were spawned by a structured products industry that simply didn't exist. These packaged derivatives have all kinds of clauses that can very quickly lead to cash calls and erosion of your NPV.

So the first problem is how to absolutely quantify the total value of these bad assets. Do you use the last mark-to-market value? Average historical prices? Also not every bank wants to come clean about these assets since some of the risks they took are borderline illegal. Full disclosure will involve government intervention and assuredly something bad is bound to come up. Just look at the very simple example of hidden expenditures tied to structuring fees for these products. Which bank wants to get their name out there? That's why this is taking so long to sort out.

So your theory states that "All troubled legacy assets are placed in a special portfolio of non-performing, non-earning assets that have to be charged off over time." In my comment above, it's never going to be "All" but rather "Some". That figure is never likely going to be fully trusted either.

The second problem with your idea is the backbone of your article.

"An ROA of 1.1% is applied to the performing earning assets, after charge-offs from delinquencies in these assets. The ROA on earning assets is conservative, given that many US banks have historically achieved ROAs of 1.2%-1.4%."

What if there were flat to negative ROA figures? Banks will never be what they were for the past twenty+ years. If you take away or minimize structured products, investment banking and broker/dealer operations, what you are left with is the brunt of earnings dependent on consumer and commercial lending. Remember twenty to thirty years ago we didn't have structured products or investment banking operations on the scale that we've had in recent decades. Some of these things (CDS, ABS etc.) didn't exist 10 years ago.

Assuming there is government intervention and forced lending to the public. Your comparison to Japan becomes increasing valid since we are throwing good money after bad. You are lending money to an American public that has a savings rate of 1% and no driving industry or growth in sight. There's no biotech boom like the 80's, .com boom like the 90's, or structured finance boom of our current decade around the corner. We are likely to face Japan like conditions of flat growth.

]]> http://seekingalpha.com/article/115376-analysts-flip-flop-on-oil-again?source=feed#comment-361059 361059
“They didn’t have control of oil prices when it was on the way up,” he said. “They don’t have control of it when it’s on the way down.”

Edit this line: "It’s amazing how different the oil tune sounds from analysts." to

While I'm not familiar with Stephen Schork's historical view on crude oil, may analysts have rapidly switched their views on oil to echo the sentiments of the quote above. ]]> Tue, 20 Jan 2009 13:54:36 -0500
“They didn’t have control of oil prices when it was on the way up,” he said. “They don’t have control of it when it’s on the way down.”

Edit this line: "It’s amazing how different the oil tune sounds from analysts." to

While I'm not familiar with Stephen Schork's historical view on crude oil, may analysts have rapidly switched their views on oil to echo the sentiments of the quote above. ]]> http://seekingalpha.com/article/115376-analysts-flip-flop-on-oil-again?source=feed#comment-361049 361049 Tue, 20 Jan 2009 13:46:14 -0500 http://seekingalpha.com/article/87086-value-investing-going-for-the-gold-and-silver?source=feed#comment-226647 226647
As far as CDE, I believe the stock is a favorite of precious metals shorts. CDE is prone to heavy volatility. If you hold onto your believe that silver is in a long-term uptrend, CDE is a great place to be given that they are poised to be one of the largest silver miners in the world. Bolivia is being developed at a timely pace and the performance of CDE is centered around the short-term fall in silver prices.

I've posted more detailed analysis in the past about LMC and CDE on my blog.

Cheers.

]]> Sat, 09 Aug 2008 06:00:12 -0400
As far as CDE, I believe the stock is a favorite of precious metals shorts. CDE is prone to heavy volatility. If you hold onto your believe that silver is in a long-term uptrend, CDE is a great place to be given that they are poised to be one of the largest silver miners in the world. Bolivia is being developed at a timely pace and the performance of CDE is centered around the short-term fall in silver prices.

I've posted more detailed analysis in the past about LMC and CDE on my blog.

Cheers.

]]> http://seekingalpha.com/article/87086-value-investing-going-for-the-gold-and-silver?source=feed#comment-226645 226645
I didn't republish the article on my blog.

Best,

Andy]]> Sat, 09 Aug 2008 05:48:46 -0400
I didn't republish the article on my blog.

Best,

Andy]]> http://seekingalpha.com/article/82623-the-current-market-atmosphere-easy-money-hard-to-come-by?source=feed#comment-192435 192435

]]> Wed, 25 Jun 2008 08:30:43 -0400

]]> http://seekingalpha.com/article/78513-penn-west-energy-more-questions-than-answers?source=feed#comment-191907 191907
Anyone who writes trivial regarding fundamental analysis has his mind set firmly in one direction. So what if the author missed a major run-up for PWE? His portfolio is up 16.6%. Hasn't anyone told you that it's better not to lose money than to make money?
]]> Tue, 24 Jun 2008 13:04:37 -0400
Anyone who writes trivial regarding fundamental analysis has his mind set firmly in one direction. So what if the author missed a major run-up for PWE? His portfolio is up 16.6%. Hasn't anyone told you that it's better not to lose money than to make money?
]]> http://seekingalpha.com/article/81562-will-the-market-keep-falling-i-hope-so?source=feed#comment-188108 188108
For a blue-chip stock the odds of dropping to 70% are low, not to mention 80% or even 90% off of previous highs. If you play the short game you are betting on further downside after the stock has already dropped 70% or greater. No one knows where the bottom is, so it makes no sense to try and short an investment that you believe is a quality one at $300 or at $90. None of your examples above are quality examples. ARBA, CMGI, NT and YHOO built business models from networks and services that were relatively new and untested.

A better example would be INTC or MSFT in the tech sector. Picking up either of these at 70% or greater discounts would be a solid buy. ]]> Wed, 18 Jun 2008 22:10:13 -0400
For a blue-chip stock the odds of dropping to 70% are low, not to mention 80% or even 90% off of previous highs. If you play the short game you are betting on further downside after the stock has already dropped 70% or greater. No one knows where the bottom is, so it makes no sense to try and short an investment that you believe is a quality one at $300 or at $90. None of your examples above are quality examples. ARBA, CMGI, NT and YHOO built business models from networks and services that were relatively new and untested.

A better example would be INTC or MSFT in the tech sector. Picking up either of these at 70% or greater discounts would be a solid buy. ]]> http://seekingalpha.com/article/81718-hyperinflation-here-we-come?source=feed#comment-187698 187698
www.rawgreed.com/?page...

Since inception of the blog in 2005, I have written over 400 articles. I get nothing from it other than producing a track record. My analysis may be simple, but in trading, quality simply means consistent picking. I'm a value investor. When I buy I detail, cash, debt, ROE, ROI etc. I look at the trend, I look at RSI, among my personal observations. Keeping things simple gives you clear direction and conviction.

It doesn't matter if you employ throwing darts or elliot wave analysis as long as your results in B&W prove profitable to you. ]]> Wed, 18 Jun 2008 11:14:32 -0400
www.rawgreed.com/?page...

Since inception of the blog in 2005, I have written over 400 articles. I get nothing from it other than producing a track record. My analysis may be simple, but in trading, quality simply means consistent picking. I'm a value investor. When I buy I detail, cash, debt, ROE, ROI etc. I look at the trend, I look at RSI, among my personal observations. Keeping things simple gives you clear direction and conviction.

It doesn't matter if you employ throwing darts or elliot wave analysis as long as your results in B&W prove profitable to you. ]]> http://seekingalpha.com/article/81718-hyperinflation-here-we-come?source=feed#comment-187692 187692
The most BASIC premise of inflation is not an increase in prices. It simply means more dollars competing for the same goods. Looking at MZM money supply as I posted in previous articles shows that our money supply has increased over 16% in just the first half of this year. We recovered in roughly 3 years following the .com lead recession after the Fed increased money supply 21% in 2001.

Can anyone point to a single recession in U.S. history that hasn't lead to an higher adjustment in the cost of living following our recovery?

CT recovery if you want hard statistics I offer you to read my historical calls on buys and sells 100% have been posted in the past and in SA articles. My personal belief is the quality of analysis is tied to accountability. I post my buys and sells to produce a track record, of which I have roughly 3 years posted for all to see. ]]> Wed, 18 Jun 2008 11:03:19 -0400
The most BASIC premise of inflation is not an increase in prices. It simply means more dollars competing for the same goods. Looking at MZM money supply as I posted in previous articles shows that our money supply has increased over 16% in just the first half of this year. We recovered in roughly 3 years following the .com lead recession after the Fed increased money supply 21% in 2001.

Can anyone point to a single recession in U.S. history that hasn't lead to an higher adjustment in the cost of living following our recovery?

CT recovery if you want hard statistics I offer you to read my historical calls on buys and sells 100% have been posted in the past and in SA articles. My personal belief is the quality of analysis is tied to accountability. I post my buys and sells to produce a track record, of which I have roughly 3 years posted for all to see. ]]> http://seekingalpha.com/article/81561-investing-in-china-s-falling-stock-market?source=feed#comment-187677 187677 Wed, 18 Jun 2008 10:47:31 -0400 http://seekingalpha.com/article/80510-buying-airlines-as-a-gold-and-silver-hedge?source=feed#comment-181622 181622
You are staring at an opportunity to buy travel infrastructure starting at .30 on the dollar.

A few years ago CAL was under $9 and shot to $40 in about a year, giving some investors a few hundred percent gains. The same was true for AMR and basically all airlines. This is the cyclical nature of the sector. ]]> Sun, 08 Jun 2008 22:40:23 -0400
You are staring at an opportunity to buy travel infrastructure starting at .30 on the dollar.

A few years ago CAL was under $9 and shot to $40 in about a year, giving some investors a few hundred percent gains. The same was true for AMR and basically all airlines. This is the cyclical nature of the sector. ]]> http://seekingalpha.com/article/74543-a-true-china-bear?source=feed#comment-161163 161163
I will follow up with an article about bear markets.

Best,

Andy]]> Sat, 03 May 2008 12:28:41 -0400
I will follow up with an article about bear markets.

Best,

Andy]]> http://seekingalpha.com/article/73312-gold-prices-in-for-short-term-rise-according-to-gold-to-oil-ratio?source=feed#comment-158449 158449 Tue, 29 Apr 2008 06:27:28 -0400 http://seekingalpha.com/article/73425-using-the-gold-to-oil-ratio-to-monitor-gold-equity-investments?source=feed#comment-156273 156273
Johngonole, the September 2006 article points out that I suspected gold would continue to rise. You are correct that inflation and hyperinflation will cause both gold and oil to rise. The articles objective is to point out that oil was/is rising dramatically out of line compared to gold. ]]> Fri, 25 Apr 2008 00:03:12 -0400
Johngonole, the September 2006 article points out that I suspected gold would continue to rise. You are correct that inflation and hyperinflation will cause both gold and oil to rise. The articles objective is to point out that oil was/is rising dramatically out of line compared to gold. ]]> http://seekingalpha.com/article/48039-lundin-mining-should-resume-its-foward-run?source=feed#comment-99877 99877 Fri, 26 Oct 2007 03:28:48 -0400