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charliezap

charliezap
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  • Buffett Banks On Bank Of America's Continuing Recovery [View article]
    Tom, what BAC assets are on the books at below market? Certainly not the $80 billion of goodwill and intangibles! Is it the bad loans? Or the foreclosed real estate?
    Feb 12 08:14 AM | Likes Like |Link to Comment
  • Buy Citigroup: Emerging Market Concerns Are Overblown [View article]
    Yes, I got mistyped here. Credit Suisse report dated 2/7 has TBV for yearend 2013 at $55.44, and 2014 at $59.13. Estimated EPS for 2014 is $5.25, so for some reason not all of the EPS drops down to TBV. 1.25 X 59.13 = 73.91, rounding to $74, same above.
    Feb 12 12:01 AM | Likes Like |Link to Comment
  • Buy Citigroup: Emerging Market Concerns Are Overblown [View article]
    ""Should trade to $60 or 90% of book value on $5.10+ in earnings.""

    More to the point, Citi is alone among major banks in selling at a discount to Tangible Book Value (TBV, i.e., BV without the goodwill and intangibles). Credit Suisse projects TBV for C at $55.91 for 2014 year end. If and when C resumes a decent dividend, C could trade up to 1.25 X TBV (BAC is currently at 1.29 X TBV), or say $74. This may be an ambitious target for 2014, but $65 is a reasonable target, IMO.
    Feb 11 03:18 PM | Likes Like |Link to Comment
  • Buffett Banks On Bank Of America's Continuing Recovery [View article]
    Buffett had more bargaining power than Moynihan at the time. BAC needed a confidence booster, and Buffett had the Good Housekeeping Seal of Approval, so in strict financial terms, Buffett came off better.
    Feb 11 01:05 PM | Likes Like |Link to Comment
  • 2 Big Gold Miners In The Beginning Stages Of Turnarounds [View article]
    AU making a 6-month high today, but still well below the 1-year high. AU will benefit from the declining South African Rand currency, which widens profit margins. Stock price is in strong uptrend, but looking a little overbought on the chart right now.

    ABX's stock action has not been quite as strong as that of AU, but the stock should improve along with the gold price.
    Feb 11 12:57 PM | Likes Like |Link to Comment
  • Buffett Banks On Bank Of America's Continuing Recovery [View article]
    Meant to say: Would Buffett BUY now at $16.72? No way!
    Feb 11 11:04 AM | Likes Like |Link to Comment
  • There's No Way I Can 'Butter My Bread' With This Healthcare REIT [View article]
    Don't quite understand the drop, especially considering the statement: "SNH expects this acquisition to be immediately accretive to normalized FFO per share by approximately $0.06 -- $0.08 per year." Of course, SNH's main focus has not been in MOB's, and maybe this has drawn a negative reaction. To me, the acquisition seems like a good move, so I think there is a buying opportunity here.
    Feb 11 11:01 AM | 1 Like Like |Link to Comment
  • Buffett Banks On Bank Of America's Continuing Recovery [View article]
    Re: ""Buffett Banks On Bank Of America's Continuing Recovery""

    Who knows?

    In fact, Warren Buffett's investment in BAC was a highly opportunistic deal that was very lucrative for Berkshire and carried very little risk. When Warren Buffett did the preferred stock deal, BAC was selling around $7 per share. He got preferred stock paying 6% and warrants to buy common @$7.14 per share. If you're a BRK shareholder, what's not to love? Now the common is at $16.72, and the divi is 1 cent per quarter. Would Buffett now at $16.72? No way!

    Re: ""Berkshire Hathaway was able to exclude 59.5% of the dividends it received from its Bank of America preferred stock investment . .""

    Any other corporation can also exclude a portion of dividends received from another corporation. Nothing remarkable here. But when you have a link to the propagandist website, Newsmax, you lose a lot of credibility with me. (The article takes on Warren Buffett for a $1 billion unrecognized tax gain that is a subject of dispute by the IRS. Nothing remarkable here either, since having a dispute with the IRS is just business as usual for any big corporation, and with a market cap of $277 billion, BRK is big.)

    IMO, BAC is fully valued at its current price, selling at 1.29 X TBV. By comparison, Goldman sells at 1.15 X, and Morgan Stanley sells at 1.07 X. Citi, meanwhile, is at a discount, at 0.91 X. Citi also sells at a lower multiple of 2015 earnings than BAC, 8.6 vs 10.4. Citi is a better buy, IMO.

    Data Source: AAII Stock Investor Pro.
    Feb 11 10:03 AM | 2 Likes Like |Link to Comment
  • Why Casablanca Wants To Split Cliffs Natural Resources, The Bloom Lake Project And The Future Of Iron Ore [View article]
    Anthony

    Good luck with AKS. Citigroup just put out a report, reiterating a Sell recommendation and a target price of $2.50.
    Feb 10 08:52 PM | Likes Like |Link to Comment
  • Why Casablanca Wants To Split Cliffs Natural Resources, The Bloom Lake Project And The Future Of Iron Ore [View article]
    OK, I did your google and the first thing that comes up is a Time magazine article on short selling of bank stocks in 2008.
    It says: ""But [the short sellers] have not, by and large, been wrong in their choice of targets. Bear and Lehman died because they were undercapitalized. Merrill's own mismanagement helped to chase it into the arms of B of A. Yet in the case of AIG, the argument is that the company would have remained afloat had its stock price not been driven down, which triggered a credit downgrading that then required AIG to raise $14 billion in capital overnight to meet collateral requirements on its credit default swaps.""
    http://ti.me/1kqxEdW
    Regarding AIG, the fact is AIG would have gone down with or without the shorts. Why? Because AIG was itself indulging in naked shorting; AIG was selling CDS contracts (credit default swaps) in an offshore subsidiary without setting aside any reserves or collateral or taking any offsetting positions.
    http://reut.rs/1kqxEe0
    Of course, the short sellers were not stupid. They saw some wounded fish in the water and went after them. But the wounds were self inflicted.
    Various reports and commissions have come up with a lot of reasons for the banking crisis -- subprime mortgages, lax underwriting, the housing bust, fannie and freddy, etc -- but this is the first time that I have seen it suggested that short sellers caused the problem. If you still believe the shorts did it, I still have a bridge to sell you. I'll take just 10% down -- you can just wire me the money to my Cayman Islands account right now.
    Feb 8 11:29 PM | Likes Like |Link to Comment
  • Why Casablanca Wants To Split Cliffs Natural Resources, The Bloom Lake Project And The Future Of Iron Ore [View article]
    ""What is happening to clf stock reminds me of what the shorts did to the banking industry in 2008--9.""

    If you truly believe that, I have a bridge to sell you -- the George Washington bridge, which is just the latest symbol of political idiocy. The banking industry did it to themselves, selling fraudulent mortgage securities around the world. The shorts did not put Lehman and Bear Stearns out of business -- Bear and Lehman screwed up all on their own. Citibank would also have been busted, were it not for a bailout by Hank Paulson, GWB's treasury secretary. As it is, the bailout diluted all h..l out of Citi, and they had to do a 1 for 10 reverse split to get the stock price back up to the 40's, 50's.

    ""The Chinese government is not going to allow their economy to deteriorate to an unmanageable level.""

    China depends heavily on exports for much of their GDP growth. Sure, they can build more high speed trains and apartment buildings, but they probably have more than enough already. If you think China can control the world economy, and hence their growth, then I have another bridge to sell you.

    BTW: China may be losing market share in manufacturing,, as factories shift to countries with even lower wages, such as Vietnam and Bangladesh.
    Feb 8 04:09 PM | Likes Like |Link to Comment
  • PetroQuest Energy: Recent Operations Update Highlights Lucrative Risk Reward Opportunity That The Market Is Not Seeing [View article]
    Excellent analysis. I had bought PQ in December as a January play -- small cap, low priced, low P/E, but it did not seem to work and I sold in January. Took a small loss. I decided to buy it back on the basis of this analysis, even though it makes the January sale a "wash sale".
    Feb 7 01:25 PM | Likes Like |Link to Comment
  • Warren Buffett Is Wrong About Dividends [View article]
    Re: ""tax disadvantages of a dividend""
    The problem here lies with the tax code, which discriminates against dividends through double taxation, first at the corporate level, and then at the shareholder level. Because of this, many corporate managements are disincentivized regarding dividends, and many large corporations have accumulated large cash hoards. Other corporations have invested in marginal projects, often outside of their field of competence, with detrimental effects on shareholder value. Warren Buffett may have superior talent as a capital allocator, but the same cannot be said for many other corporate managements. Were it not for the tax code, it would, in most cases, be better to return capital to the shareholders, allowing the market to do the proper allocation.
    The solution to this problem is simple. Corporations should get a deduction for dividends paid, in the same way as interest costs are deductible. The loss of tax revenue to the US treasury would be offset by taxing dividends at ordinary income tax rates. The result: no more double taxation of dividends, and the removal of a rationalization for corporate cash hoards that rightfully belong to the shareholders.
    This also partially addresses the problem of Warren Buffett having a lower marginal tax rate than his secretary. Plus, it equalizes the capital structure playing field, as between debt and equity. Currently, there is a strong bias toward debt when new capital is needed, which creates a higher degree of financial instability.
    Feb 7 10:51 AM | 4 Likes Like |Link to Comment
  • Why Casablanca Wants To Split Cliffs Natural Resources, The Bloom Lake Project And The Future Of Iron Ore [View article]
    It looks like Casablanca is "bagged" here with a loss, so they are trying to stir something up. There is a saying that you can't squeeze blood out of a stone and I think it applies here -- its really hard to see how splitting Cliffs can create shareholder value.

    But I'm thankful to Casablanca anyway. The rally of the past 2 days gives me a chance to bail out of my small position with a small profit. The capital is better deployed elsewhere.
    Feb 7 09:46 AM | 4 Likes Like |Link to Comment
  • There's No Way I Can 'Butter My Bread' With This Healthcare REIT [View article]
    Re: ""Short line, nice smiles, intelligent helpful people.""

    When I can't get it done online, or by mail, I mostly I go to the DMV in Riverhead, NY. And guess what (provided I go in the morning): "Short line, nice smiles, intelligent helpful people."

    When I am in Manhattan, I go uptown to the DMV on East 125th Street, in Harlem. And guess what (provided I go in the morning): "Short line, nice smiles, intelligent helpful people." (On the other hand, the midtown and downtown DMV offices can be more problematical.)

    Where do you live? Do you have a Republican governor?
    Feb 6 04:56 PM | Likes Like |Link to Comment
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