A potential new legal front is opened against the banks as the U.S. sues Bank of America (BAC), seeking at least $1B in damages for allegedly misrepresenting the quality of home loans it (through its Countrywide unit) sold to Fannie and Freddie. [View news story]
After the citizens of the US sue Freddie and Fannie - including all its management for the last 10 years - for fraud, abuse of power, self-serving conflicting interest, theft, complicity, racketeering, and a few more - then maybe they've got a leg to stand on in suing B of A. It takes some brass as Bill Clinton recently said......
Does Pandit's departure from Citigroup mean bank boards are beginning to take their responsibilities seriously? If so, Bank of America CEO Moynihan could be next. Moynihan inherited a mess (like Pandit), but has been unable to convince investors he has a strategy for getting out of it. Of even more import is the rebuilding of BAC's brand as a leading consumer bank. [View news story]
Agree with Jeffreychood and RalphSchauss in that Moynihan has made strides - some very visible and others you just have to look more closely to see. Investors are nervous about BAC because there was just so much toxic waste at CountryWide that no one is quite sure it's completely under control. As an investor, I literally gag at the money wasted and still wonder why CountryWide executives did not go to prison. It sure looked like fraud to me.
Will agree that the true strategy has not yet appeared - but this company is reinventing itself so a pivot or two is to be expected.
After Ex-CFO, Board Member Leave, Bank Of America Finds New Controversial Directors [View article]
I am a female and I find this article to be a bit ridiculous and sounding a tad bit ignorant of business in general. First - you would be hard pressed to find any company today that is "clean" by the writers apparent definition; lawsuits fly and accusations get made in the ordinary course of business these days. And they get publicized many times before the facts are even knonw. The article, as another writer pointed out, is disparaging the board members based on actions taken against their former companies. Second - what he did not even mention is that this group of board members are a diverse group with real experience in dealing with difficult issues. As a stock holder that is the type person I want on the board where I invest.
One longtime Berkshire (BRK.B) owner suggests big cuts in the company's consumer name holdings means a passing of the torch is nearer as the capital could be getting allocated to new PMs Todd Combs and Ted Weschler. A nice theory says, Martin Sosnoff, but he believes Buffett could be loading the elephant gun for another major acquisition a la Burlington Northern. [View news story]
We can "guess" all we want about what the portfolio moves mean but will most likely still be surprised at the ultimate move. Part of the fun of watching Mr. Buffet and company.
Days before BofA (BAC) shareholders approved the bank's $50B Merrill Lynch purchase, bank execs were told Merrill's losses would hit the combined companies' earnings for years, but chose not to share this info with shareholders. Court documents filed yesterday shed new light on the disconnect, and will likely put more pressure on federal officials to hold key execs accountable for their crisis-era (in)actions. [View news story]
The BAC-Merrill deal is a complex issue of which we may never know the full extent of who said what, who knew what when, etc. As a long-term shareholder and a prior employee I was very negatively impacted financially - but I agree with those who have commented that rehashing the past and piling on with more lawsuits is not solving the issues of today. I'm no fan of Ken Lewis - I found him arrogant and an isolationist - but we were not in his shoes when the powers that be saw another depression on the horizon. Bad judgment by executives is not illegal as of yet.
Buy American Capital For Diversification [View article]
I would appreciate very much if you would please explain why you think the best way to value AGNC is book value. Others who have written about AGNC have made the same statement and I don't see it. The market has shown that it can easily ignore book value as a measue of "real" value - especially where the assets are not physical assets.
Book value for this stock means nothing if the dividends dry up and the stock is trading at a price lower than book - especially if you bought at a premium to book.
(No access to spellcheck button - so apologies if there are errors.)
Why American Capital Agency Should Be A Core Holding In Your Retirement Portfolio (Part 2) [View article]
The company comments on how well they do at picking the underlying assets - but what leeway do they actually have? As the fear surrounding these assets has subsided - more investors of all sizes are interested in acquiring these mortgages. How does AGNC compete against a UBS, Goldman or other large institution for the best of the assets? My real concern with all of the mReits - will they hold true to their guidelines on the assets they pick if the supply dwindles?
Why American Capital Agency Should Be A Core Holding In Your Retirement Portfolio (Part 2) [View article]
The article is full of good information - so thank you. I will note that it's not the past that will make this a good investment if you are currently sitting on the sidelines and considering investment - but your expectations about the furture direction of interest rates, prepayments, foreclosures, etc.
I suggest that you add as a 4th bullet and thus a 4th article a bit about the key factors impacting this investment looking out over the next several years and how you might analyze the impact of those factors on your investment based on a probability matrix.
BofA (BAC) is reportedly in early stage talks with lawyers representing more than 1,000 former Merrill Lynch brokers over a settlement that could cost the bank hundreds of millions of dollars. The brokers, who left the firm after BofA's 2009 takeover, claim they're owed deferred compensation. [View news story]
Actually Countrywide has been the downfall of BAC - Merrill Lynch not so much Yes BAC overpaid for it and possibly lied to the stockholders but the Countrywide acq. has caused BAC stockholders billions.
Bank Of America: Is It In Or Out Of Favor Right Now? [View article]
First - let me say that I'm a long time share holder of BAC.
2nd - I can't make a price prediction as this stock price will continue to be speculative and volatile because people are waiting for the other shoe to fall - they don't believe the numbers. What will nullify the negativism? In my opinion:
1. BAC begins paying a higher dividend thus signaling to the world that the government and all regulators are comfortable with the company's financial stability which means no more monsters in their closets or 2. A new CEO with a reputation for improving operations is hired. Look at HD after the present CEO was put in office. It took a few years - but his impact is seen in the share price now.
I have no problem with the current CEO - he has slogged through a mess we probably know only a little about. However, he is tainted because of the time-frame in which he came to office with the foreclosures, and all the ugly press - again not of his doing but that of the Ken Lewis acquisition of Country Wide. For some reason BAC and its current CEO became the lightning rod for the average guy's "bank hate" when WFC and others were just as guilty.
BTW: You very intelligent readers - I would like to see what the Ken Lewis acq. of Countrywide cost the bank's shareholders. The ALL-IN cost of that deal. Has to be the most expensive acq ever.
Retire Young And Retire Wealthy: An Open Challenge For The 99% [View article]
@ surfgeezer - just saw your second comment - unfortunately AFTER I had asked you to expand. Thank you. I'm still curious as to where you put your money.
Retire Young And Retire Wealthy: An Open Challenge For The 99% [View article]
Hi surfgeezer....
I would like to hear more as your reply confused me more than anything. What I gathered from your reply is that you used leverage (vs. my no debt item) to successfully build a portfolio and by watching the actual cash flow of each transaction vs. betting on price appreciation - you were successful. I have to clarify that we had no debt when the financial tsunami hit - not that we never used debt. As our portfolio had been built over many years and we used compounding nicely. All dividends reinvested where it made sense and due to time frame - enjoyed several stock splits and then watched the stock climb back to its pre-split price. However, I hate to say it - but we had more luck than actual financial acumen at times.
Many financial advisor gurus say do not use leverage for investing - but as you are someone who has used it successfully by watching the cash flow vs. betting on price appreciation - I think more elaboration from you would be very educational as you are offering executable and profitable advice.
Retire Young And Retire Wealthy: An Open Challenge For The 99% [View article]
A good thought provoking article even if the numbers might not make sense and generally very good feedback from the readers.
What no one took into account - at least that I saw but I did not read every comment - was the advent of another "crisis" such as the on-going financial crisis. How do you prepare for that - especially when your investments as well as your chosen career can be negatively impacted?
My husband and I (both over 50 now) had built a multi-million $ portfolio and believed it was diversified. However, the market did a number on our portfolio which impacted our carefully laid plans and the portfolio has NOT recovered to date.
What I can say is that the pain could have been worse but we lived our lives like much of the advice in many of your comments. For example: 1. we had no debt 2. we started saving early 3. we attempted to have multiple sources of income 4. needs vs. wants was well understood 5. we lived under our means 6. we have no children to support (this makes a huge impact on financials)
However, I am going back to work (was self-employed in the financial services field - a shrinking field at the moment) although the job will be more basic than my past career which means much less salary.
Home Depot: This Home Improvement Store Is Cheap [View article]
Mark - I will answer although I'm sure Nadeem will weigh in as well but the reason there are pull backs are varied - the path to a certain price is not linear - just look at Apple. Reasons:
1. Momentum / market psychology can drive a stock's price versus company fundamentals. 2. Electronic trading. 3. A hedge fund or other large volume holder may change its opinion as to future value and dump the stock - although fundamentals may still hold. 4. Fear - the whole market can move downward on bad news out of Europe or any where.
Many more - but the main point is that the ascent of a stock is seldom linear.
A potential new legal front is opened against the banks as the U.S. sues Bank of America (BAC), seeking at least $1B in damages for allegedly misrepresenting the quality of home loans it (through its Countrywide unit) sold to Fannie and Freddie. [View news story]
It takes some brass as Bill Clinton recently said......
Does Pandit's departure from Citigroup mean bank boards are beginning to take their responsibilities seriously? If so, Bank of America CEO Moynihan could be next. Moynihan inherited a mess (like Pandit), but has been unable to convince investors he has a strategy for getting out of it. Of even more import is the rebuilding of BAC's brand as a leading consumer bank. [View news story]
Investors are nervous about BAC because there was just so much toxic waste at CountryWide that no one is quite sure it's completely under control. As an investor, I literally gag at the money wasted and still wonder why CountryWide executives did not go to prison. It sure looked like fraud to me.
Will agree that the true strategy has not yet appeared - but this company is reinventing itself so a pivot or two is to be expected.
After Ex-CFO, Board Member Leave, Bank Of America Finds New Controversial Directors [View article]
Second - what he did not even mention is that this group of board members are a diverse group with real experience in dealing with difficult issues. As a stock holder that is the type person I want on the board where I invest.
One longtime Berkshire (BRK.B) owner suggests big cuts in the company's consumer name holdings means a passing of the torch is nearer as the capital could be getting allocated to new PMs Todd Combs and Ted Weschler. A nice theory says, Martin Sosnoff, but he believes Buffett could be loading the elephant gun for another major acquisition a la Burlington Northern. [View news story]
Days before BofA (BAC) shareholders approved the bank's $50B Merrill Lynch purchase, bank execs were told Merrill's losses would hit the combined companies' earnings for years, but chose not to share this info with shareholders. Court documents filed yesterday shed new light on the disconnect, and will likely put more pressure on federal officials to hold key execs accountable for their crisis-era (in)actions. [View news story]
As a long-term shareholder and a prior employee I was very negatively impacted financially - but I agree with those who have commented that rehashing the past and piling on with more lawsuits is not solving the issues of today.
I'm no fan of Ken Lewis - I found him arrogant and an isolationist - but we were not in his shoes when the powers that be saw another depression on the horizon. Bad judgment by executives is not illegal as of yet.
Buy American Capital For Diversification [View article]
Book value for this stock means nothing if the dividends dry up and the stock is trading at a price lower than book - especially if you bought at a premium to book.
(No access to spellcheck button - so apologies if there are errors.)
Why American Capital Agency Should Be A Core Holding In Your Retirement Portfolio (Part 2) [View article]
Why American Capital Agency Should Be A Core Holding In Your Retirement Portfolio (Part 2) [View article]
I suggest that you add as a 4th bullet and thus a 4th article a bit about the key factors impacting this investment looking out over the next several years and how you might analyze the impact of those factors on your investment based on a probability matrix.
BofA (BAC) is reportedly in early stage talks with lawyers representing more than 1,000 former Merrill Lynch brokers over a settlement that could cost the bank hundreds of millions of dollars. The brokers, who left the firm after BofA's 2009 takeover, claim they're owed deferred compensation. [View news story]
A Portfolio For Older Boomers [View article]
Bank Of America: Is It In Or Out Of Favor Right Now? [View article]
2nd - I can't make a price prediction as this stock price will continue to be speculative and volatile because people are waiting for the other shoe to fall - they don't believe the numbers. What will nullify the negativism? In my opinion:
1. BAC begins paying a higher dividend thus signaling to the world that the government and all regulators are comfortable with the company's financial stability which means no more monsters in their closets or
2. A new CEO with a reputation for improving operations is hired. Look at HD after the present CEO was put in office. It took a few years - but his impact is seen in the share price now.
I have no problem with the current CEO - he has slogged through a mess we probably know only a little about. However, he is tainted because of the time-frame in which he came to office with the foreclosures, and all the ugly press - again not of his doing but that of the Ken Lewis acquisition of Country Wide. For some reason BAC and its current CEO became the lightning rod for the average guy's "bank hate" when WFC and others were just as guilty.
BTW: You very intelligent readers - I would like to see what the Ken Lewis acq. of Countrywide cost the bank's shareholders. The ALL-IN cost of that deal. Has to be the most expensive acq ever.
Retire Young And Retire Wealthy: An Open Challenge For The 99% [View article]
Retire Young And Retire Wealthy: An Open Challenge For The 99% [View article]
I would like to hear more as your reply confused me more than anything. What I gathered from your reply is that you used leverage (vs. my no debt item) to successfully build a portfolio and by watching the actual cash flow of each transaction vs. betting on price appreciation - you were successful. I have to clarify that we had no debt when the financial tsunami hit - not that we never used debt. As our portfolio had been built over many years and we used compounding nicely. All dividends reinvested where it made sense and due to time frame - enjoyed several stock splits and then watched the stock climb back to its pre-split price. However, I hate to say it - but we had more luck than actual financial acumen at times.
Many financial advisor gurus say do not use leverage for investing - but as you are someone who has used it successfully by watching the cash flow vs. betting on price appreciation - I think more elaboration from you would be very educational as you are offering executable and profitable advice.
Retire Young And Retire Wealthy: An Open Challenge For The 99% [View article]
What no one took into account - at least that I saw but I did not read every comment - was the advent of another "crisis" such as the on-going financial crisis. How do you prepare for that - especially when your investments as well as your chosen career can be negatively impacted?
My husband and I (both over 50 now) had built a multi-million $ portfolio and believed it was diversified. However, the market did a number on our portfolio which impacted our carefully laid plans and the portfolio has NOT recovered to date.
What I can say is that the pain could have been worse but we lived our lives like much of the advice in many of your comments. For example:
1. we had no debt
2. we started saving early
3. we attempted to have multiple sources of income
4. needs vs. wants was well understood
5. we lived under our means
6. we have no children to support (this makes a huge impact on financials)
However, I am going back to work (was self-employed in the financial services field - a shrinking field at the moment) although the job will be more basic than my past career which means much less salary.
Home Depot: This Home Improvement Store Is Cheap [View article]
1. Momentum / market psychology can drive a stock's price versus company fundamentals.
2. Electronic trading.
3. A hedge fund or other large volume holder may change its opinion as to future value and dump the stock - although fundamentals may still hold.
4. Fear - the whole market can move downward on bad news out of Europe or any where.
Many more - but the main point is that the ascent of a stock is seldom linear.