Listening to Dimon, one almost feels sorry for bank executives and their shareholders given the regulatory foot they're under. Asked about share repurchases, Dimon wants to get back to them in 2013. Though little changed in the bank's underlying business or capital strength, JPM was forced to suspend buybacks at $32 share in wake of the London Whale, and now will resume them at a far higher price. [View news story]
The London Whale story sunk their stock to $32. They were trading around $46 before it hit or rumor of it hitting. So no, they did not suspend their stock repurchase at $32 only to buy it at much higher. If the London Whale story did not happen they would be buying it around $46. Distortion.
Legal settlements often ease investors’ minds, but the size of BofA's (BAC -1.5%) $2.34B tab for settling claims it misled investors about Merrill Lynch’s financial health before its purchase was an unwelcome surprise. Some analysts worry BofA’s legal exposure doesn’t seem to be tapering off; it's the bank's 11th settlement totaling $29B since the start of the financial crisis. [View news story]
So what is the benefit of this implied guarantee? Prop up the equity? Cheap debt financing? Take more risks? If equity, FNMA actual operates with an implied guarantee of the government, not a suggested theory perpetuated by the media like the big banks. And their stocks are trading at 0.28 last I look. Cheaper debt? You said they can borrow at zero - "interest free loan" - and I am pretty sure Bank of America bond rates are higher than zero. Take more risks? The way I understand it, banks are now requiring more down payments and toughening up lending criteria and the reserves keep going up despite being encouraged to lend more with zero interest rate by the fed. So they are taking less risks. The people who bought Merril, Countrywide have been booted out. Not people who are running it. So how is the supposed implied guarantee are being abused? Not that I agree there is an implied guarantee. Go rant at people like Ken Lewis if you want to but this constant righteous hectoring of the banks by regurgitating the clueless and hostility fanning media is getting old.
As to the zero interest rate policy, you may believe it is to help the bank but I am proned to believe that it is driven more to prop up the real estate market which benefits most home owners as well FNMA, Freddie and the local government who will have to deal with a housing blights. There are more beneficiaries here than just the banks. Whether I think it is fair is an entirely different opinion. But no, I don't think the tax payers are actively bailing out BAC right now.
Disclosure: I do not work for BAC or any of the big banks.
Legal settlements often ease investors’ minds, but the size of BofA's (BAC -1.5%) $2.34B tab for settling claims it misled investors about Merrill Lynch’s financial health before its purchase was an unwelcome surprise. Some analysts worry BofA’s legal exposure doesn’t seem to be tapering off; it's the bank's 11th settlement totaling $29B since the start of the financial crisis. [View news story]
Why tax payers have anything to do with this? the bank is not currentlty a burden of the government as far as I am aware.
Stephen Elop has until early to mid 2013 for Nokia's (NOK) fortunes to reverse, otherwise his job will be at risk, analysts and investors say. However, they're not holding out much hope that Nokia will have a particularly good Christmas, especially with Apple and Samsung dominating. [View news story]
Nothing in the article said someone will come along and do anything to Elop. Just people reiterating the same thing over and over again.
Disclosure. I am long NOK (and MSFT) and think Elop is doing a great job.
Intel's Q3 Revenue Miss: A Fire Sale For Long-Term Investors [View article]
You may have a long wait because they just increased it last quarter and the trend seems to be raising it every 4 quarters. To raise it now would smack of desperation.
Intel's Q3 Revenue Miss: A Fire Sale For Long-Term Investors [View article]
It's not about being cute. It's about using your opinion, your two buddies and the three people you spoke to and decide that that is factual of the whole market. Secondly, if people are put off by Win8, they can always buy Win7 PCs that use MSFT's windows and INTC's chips. Unless we have 100% adoption of android/iOS and ARM chips. While I do not think I am the norm, but the arrival of the tablet and my desire to own and use one just means that I have 1 more gadget to buy. It does not negate my desire to own a laptop/pc. Tablet to use in bed and on the road while pc/laptop for more serious work like gaming and work-work, which a larger screen real estate will be better appreciated. Maybe the surface pro or equivalent product will solve the dual-need, but I will need to get my hand on one and test it out first.
You do realize that the "recession" that we are in started in 2008 right? Why select this period to point out the slow growth? Considering the severity of the recession, the consistently high unemployment rate and the additional recall issues that they have, the (slow) growth seems like a pretty good feat. Just a thought. Also, it's silly to say that they loss $2bn by spending it on interest payment. They borrowed money and deploy it elsewhere (presumably investments, acquisitions and R&D. You should look at the returns of their cash deployment vs. the interest RATE (not amount) that they are paying. Look at how much the US gov't is paying in interest each year! Are they wasting all that money because that can be used to give everyone a free house and healthcare? In the one hand you complain that they do not invest in their business. On the other hand you complain that they borrow money (because they are wasting money on servicing debt) to invest in their business. Please make up your mind. Confused enough to decide to leave a comment.
Rumor was dismissed as silly by Lenovo before market open. And stock still running up on strong volume. Then again, nothing said it won't end up being down for the day. It's a hated stock. Disclosure: I am long NOK.
Wells Fargo (WFC) joins the list of banks adding fees where they can to make up for fee reductions mandated by Dodd-Frank. The bank plans to implement a $5/month fee for those checking accounts not maintaining a $1,500 balance or otherwise behaving as the bank wishes them to. [View news story]
But because it is not BAC, they will get a free pass. Only fees from BAC are attacked and derided.
Microsoft May Have Just Hurt Lumia 900 Sales [View article]
Wait so all android devices are running on the latest version? Will the iPhone 3GS run on, and get all the features of, iOS6? Is the 3GS not selling at all because it does not have Siri? Aren't Aapl and all the other android manufacturers screwed since they do not have the latest OS version because only the latest version sells? Will the 4S stop selling because 5 is coming out in a few months? Will NOK stop making new phones when when WP8 comes out because their products stop at the 900?
Then what do you think of IBM? It has a pretty lousy revenue growth rate too over the last 10 years (up and down but overall flattish). Buffet thinks it good enough to buy. As to debt, telecoms by their nature is very capital intensive. And because of the high cost of the business (constant need for build out and upgrade), that creates a huge moat to competition. You need very deep pockets to get into this space and willing to lose money for many many years. Look at what happened to Lightsquared, Clearwire and their other weaker competitors. Again, the fact that they are able to spend to maintain their leadership in the industry without adding debts is a testament to a strong management team and business model. And as to underperformance to S&P, it just means how much value investors are willing to pay for their business. Not the businesses intrinsic value. If you believe in the longevity of the business model, health of balance sheet, then maybe their underperformance is a sign of value. Anyway, personally, I do not think T is "screaming cheap" here. However, I am obviously a huge fan of their business model and the critical role the telecoms play the mobile/wireless boom cycle.
I am long both T and MSFT (and VZ also). However, I am confused about your arguments. Debt is not necessarily a bad thing if liquidity is properly managed and their businesses are throwing off tons of cash (so no liquidity issue). It is actually comforting to see that they did not have to issue new debt to finance their high dividend while investing in building out their networks. This is a plus. Not a minus. Secondly, their (and VZ also) utility-like characteristics lie in their owning the infrastructure to mobile internet. Yes, they will lose revenues and fees from international calls, text messaging etc...but they make them back on more people using data hence their top line is still growing. And the trend of data usage looks to keep on rising. Not sure how you will "subsidize" that. Unless someone comes along to provide free national internet access. That's not to say that MSFT is not cheap or cheaper. However, T and VZ are still very good investment options as well. Steady slow growth is not a bad thing. You get the benefit of slow and stable appreciation over long period of time and a healthy dividend in addition. What's there not to like?
Listening to Dimon, one almost feels sorry for bank executives and their shareholders given the regulatory foot they're under. Asked about share repurchases, Dimon wants to get back to them in 2013. Though little changed in the bank's underlying business or capital strength, JPM was forced to suspend buybacks at $32 share in wake of the London Whale, and now will resume them at a far higher price. [View news story]
Legal settlements often ease investors’ minds, but the size of BofA's (BAC -1.5%) $2.34B tab for settling claims it misled investors about Merrill Lynch’s financial health before its purchase was an unwelcome surprise. Some analysts worry BofA’s legal exposure doesn’t seem to be tapering off; it's the bank's 11th settlement totaling $29B since the start of the financial crisis. [View news story]
As to the zero interest rate policy, you may believe it is to help the bank but I am proned to believe that it is driven more to prop up the real estate market which benefits most home owners as well FNMA, Freddie and the local government who will have to deal with a housing blights. There are more beneficiaries here than just the banks. Whether I think it is fair is an entirely different opinion. But no, I don't think the tax payers are actively bailing out BAC right now.
Disclosure: I do not work for BAC or any of the big banks.
Legal settlements often ease investors’ minds, but the size of BofA's (BAC -1.5%) $2.34B tab for settling claims it misled investors about Merrill Lynch’s financial health before its purchase was an unwelcome surprise. Some analysts worry BofA’s legal exposure doesn’t seem to be tapering off; it's the bank's 11th settlement totaling $29B since the start of the financial crisis. [View news story]
Stephen Elop has until early to mid 2013 for Nokia's (NOK) fortunes to reverse, otherwise his job will be at risk, analysts and investors say. However, they're not holding out much hope that Nokia will have a particularly good Christmas, especially with Apple and Samsung dominating. [View news story]
Disclosure. I am long NOK (and MSFT) and think Elop is doing a great job.
Intel's Q3 Revenue Miss: A Fire Sale For Long-Term Investors [View article]
Intel's Q3 Revenue Miss: A Fire Sale For Long-Term Investors [View article]
Intel's Q3 Revenue Miss: A Fire Sale For Long-Term Investors [View article]
Short Johnson & Johnson [View article]
More Misery In Store For Nokia [View article]
Wells Fargo (WFC) joins the list of banks adding fees where they can to make up for fee reductions mandated by Dodd-Frank. The bank plans to implement a $5/month fee for those checking accounts not maintaining a $1,500 balance or otherwise behaving as the bank wishes them to. [View news story]
Microsoft May Have Just Hurt Lumia 900 Sales [View article]
Avoid AT&T's 2012 Dividend [View article]
waltunkel, thanks for the compliment!
Avoid AT&T's 2012 Dividend [View article]