Ashish S's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/155378/comments http://seekingalpha.com/article/88177-why-merrill-s-cdo-sale-doesn-t-mean-big-writeoffs-elsewhere?source=feed#comment-219039 219039 Thu, 31 Jul 2008 06:07:22 -0400 http://seekingalpha.com/article/87688-merrill-cdo-deal-how-can-it-book-a-sale?source=feed#comment-219001 219001
For Lone Star, this deal is oddly similar to the deal the Fed gave to JPM for Bear Sterns .. The Fed took all the downside risk after a small sliver of risk taken by JPM and JPM retained all the upside equity.

Additionally, a little noted consideration is that Lone Star is identified in ML's press release as an "affiliate", which usually means that ML has more than a 20% but less than a 50% stake in Lone Star. So a) this means it certainly wasn't an "arms length" price and b) ML may retain a small portion of the equity.
]]> Thu, 31 Jul 2008 03:13:02 -0400
For Lone Star, this deal is oddly similar to the deal the Fed gave to JPM for Bear Sterns .. The Fed took all the downside risk after a small sliver of risk taken by JPM and JPM retained all the upside equity.

Additionally, a little noted consideration is that Lone Star is identified in ML's press release as an "affiliate", which usually means that ML has more than a 20% but less than a 50% stake in Lone Star. So a) this means it certainly wasn't an "arms length" price and b) ML may retain a small portion of the equity.
]]> http://seekingalpha.com/article/87985-the-mystery-of-merrill-s-asset-reduction?source=feed#comment-218929 218929
CDO notional: $30.6bio
CDO sale amount: $6.7bio
ML's funding commitment on sale: 75%
ML's funding commitment notional: $6.7bio x 75% = $5.025bio
Lone Star's effective equity investment = $6.7bio - $5.025bio = $1.675bio

ML's total loss if CDOs are marked to 0: $30.6bio - 1.675bio = approx. $29bio]]> Wed, 30 Jul 2008 22:28:49 -0400
CDO notional: $30.6bio
CDO sale amount: $6.7bio
ML's funding commitment on sale: 75%
ML's funding commitment notional: $6.7bio x 75% = $5.025bio
Lone Star's effective equity investment = $6.7bio - $5.025bio = $1.675bio

ML's total loss if CDOs are marked to 0: $30.6bio - 1.675bio = approx. $29bio]]> http://seekingalpha.com/article/87527-the-merrill-shell-game?source=feed#comment-217135 217135 Tue, 29 Jul 2008 05:41:30 -0400 http://seekingalpha.com/article/87556-it-s-raining-brics?source=feed#comment-217124 217124
India (Sensex) +265%
China (Shanghai Comp) +92%
Russia (Micex) +242%
Brazil (Bovespa) +334%

US (S&P) +25%

Maybe it does pay to diversify ...]]> Tue, 29 Jul 2008 04:19:20 -0400
India (Sensex) +265%
China (Shanghai Comp) +92%
Russia (Micex) +242%
Brazil (Bovespa) +334%

US (S&P) +25%

Maybe it does pay to diversify ...]]> http://seekingalpha.com/article/87473-yes-financial-companies-can-be-analyzed?source=feed#comment-217006 217006
Calling a bottom is not what Brown has done and is absolutely not what Graham would ever do. Value investing is long term and not about market timing.

That being said, Brown claims that "investors willing to do the analysis can come up with range of loss estimates" for banks. As someone mentioned above, these level three assets like CDOs that ML has just written down again are exceedingly complex and require models put together by teams of PhDs. An individual investor will never be able to come up with this "range of loss estimates." If you can pick up Merrill's SEC filings from three months ago and estimate its $5b writedown, please give me the name of your hedge fund so I can invest!

That being said, I do agree that financials as an industry are now undervalued. However, Brown's approach of doing due diligence and picking the "best" of the pack exposes the individual investor to too much idiosyncratic risk -- no individual investor can pick out the next Bear Sterns or even Freddie or Fannie.

I think the best move for an investor with a three year horizon is to make a diversified bet on financials with 10 names in his portfolio. That way, even if one crashes and burns, he will still be able to benefit from the underlying valuations long term.
]]> Mon, 28 Jul 2008 21:23:33 -0400
Calling a bottom is not what Brown has done and is absolutely not what Graham would ever do. Value investing is long term and not about market timing.

That being said, Brown claims that "investors willing to do the analysis can come up with range of loss estimates" for banks. As someone mentioned above, these level three assets like CDOs that ML has just written down again are exceedingly complex and require models put together by teams of PhDs. An individual investor will never be able to come up with this "range of loss estimates." If you can pick up Merrill's SEC filings from three months ago and estimate its $5b writedown, please give me the name of your hedge fund so I can invest!

That being said, I do agree that financials as an industry are now undervalued. However, Brown's approach of doing due diligence and picking the "best" of the pack exposes the individual investor to too much idiosyncratic risk -- no individual investor can pick out the next Bear Sterns or even Freddie or Fannie.

I think the best move for an investor with a three year horizon is to make a diversified bet on financials with 10 names in his portfolio. That way, even if one crashes and burns, he will still be able to benefit from the underlying valuations long term.
]]> http://seekingalpha.com/article/85914-what-you-can-and-can-t-learn-from-warren-buffett?source=feed#comment-216118 216118
>> I disagree. If tax is 20% and someone believes that the govt should raise taxes to 30% to pay for more social services, that doesn't mean that person needs to pay extra tax himself. There is nothing hypocritical about using the existing rules to benefit yourself while believing that the rules should be changed.]]> Sun, 27 Jul 2008 23:00:31 -0400
>> I disagree. If tax is 20% and someone believes that the govt should raise taxes to 30% to pay for more social services, that doesn't mean that person needs to pay extra tax himself. There is nothing hypocritical about using the existing rules to benefit yourself while believing that the rules should be changed.]]> http://seekingalpha.com/article/83415-a-month-of-seeing-red?source=feed#comment-196643 196643 Tue, 01 Jul 2008 12:53:40 -0400 http://seekingalpha.com/article/83262-counterparty-risk-could-spread-beyond-credit-markets?source=feed#comment-196287 196287 Mon, 30 Jun 2008 22:05:24 -0400 http://seekingalpha.com/article/83138-on-barclays-new-carbon-emissions-etn?source=feed#comment-195629 195629 Mon, 30 Jun 2008 00:56:34 -0400 http://seekingalpha.com/article/83146-indian-inflation-continues-to-accelerate?source=feed#comment-195627 195627
maoxian.com/archive/as.../]]> Mon, 30 Jun 2008 00:51:38 -0400
maoxian.com/archive/as.../]]> http://seekingalpha.com/article/83128-are-airlines-stocks-a-contrarian-opportunity?source=feed#comment-195193 195193
Also, if you are most bullish on the airline that is "best managed" primarily on the basis of hedging its oil exposure, wouldn't this airline have the least to gain from a correction in oil prices? Airlines that have been punished because of insufficient hedging would gain much more. In fact, you might be best off shorting the hedger and going long another to really capture your view on oil prices declining.]]> Sun, 29 Jun 2008 11:43:56 -0400
Also, if you are most bullish on the airline that is "best managed" primarily on the basis of hedging its oil exposure, wouldn't this airline have the least to gain from a correction in oil prices? Airlines that have been punished because of insufficient hedging would gain much more. In fact, you might be best off shorting the hedger and going long another to really capture your view on oil prices declining.]]> http://seekingalpha.com/article/80606-biggest-winners-and-losers-since-the-5-19-top?source=feed#comment-182070 182070 Mon, 09 Jun 2008 16:48:36 -0400 http://seekingalpha.com/article/78257-the-case-for-amazon-com?source=feed#comment-171077 171077
Also, Vijay doesn't mention this, but AWS (Amazon Web Services) is an extremely innovative cloud computing solution that Google is now trying to copy itself.]]> Wed, 21 May 2008 11:16:23 -0400
Also, Vijay doesn't mention this, but AWS (Amazon Web Services) is an extremely innovative cloud computing solution that Google is now trying to copy itself.]]> http://seekingalpha.com/article/69082-explaining-bear-stearns-current-7-price?source=feed#comment-128391 128391 Tue, 18 Mar 2008 15:45:09 -0400 http://seekingalpha.com/article/65876-a-bank-led-bank-insurer-bailout?source=feed#comment-118464 118464
This is the same model investors have relied on for billions upon billions of dollars of investments!]]> Sun, 24 Feb 2008 18:00:56 -0500
This is the same model investors have relied on for billions upon billions of dollars of investments!]]>