Alex Sebastian

Three Financial Stocks Worth Holding

I would be interested to know over what period you calculated the historical average returns for these banks. In the case of JPMorgan, a five year period was used. To earn such returns in a period characterized by such speculative excess, is not, as we have seen, necessarily an indication of good management.

Overall I think that the financial stocks are still too risky. When Lehman collapsed, the valuation of its senior debt implied a $110B hole in its balance sheet. Also note that when Wachovia was forced to actually value its assets by Wells, it took a $28B hit. The situations at Freddie and Fannie were similar. What is hiding on the books of these institutions? I for one don't want to be a shareholder when we find out.

Rant Anniversary - Cramer's Mad Money (8/1/08)

I am not nearly convinced that the Fed cutting when Cramer wanted it would have done anything. Refinancing a mortgage involves a substantial upfront fee. How do these owners of NINJA loans afford that fee? They had no assets to pay for that financing. And think of where the USD would be. Cramer would have potentially stuck his finger in one of the holes in the dyke, but I wonder how the US economy would be reacting to $5 a gallon oil..?

I used to listen to Cramer, now for the most part I feel he is a rambling idiot. I definitely did not like his bottom call last week...

Bottoming Stocks - Cramer's Stop Trading! (7/31/08)

I wrote in my blog about why I think Cramer is wrong. Just because an investor disclosed a stake, it doesn't mean they "jumped in". They probably have been acquiring this stake for a while and are looking to build positive sentiment by releasing the information now. I am still bearish.