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jclyak

jclyak
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  • Bank Of America Raises Its Value For Investors [View article]
    I agree with a lot of the comments. Historically management and customer service has been terrible. Litigation historically, namely for the past 5 years has been devastating. I ask all you "historians" what about the future? Is history always extrapolated into the future? I think not necessarily and I for one will be glad to buy your BAC shares based on my view that historical extrapolation in this context is ridiculous.

    BAC has the best assets of any US bank (I own a bunch of Wells and JPM too). If going forward, mgmt. can execute and litigation abates, those assets will yield a ton of income and a rapidly growing PE multiple on said income...just MHO guys.
    Aug 18 10:03 PM | 2 Likes Like |Link to Comment
  • The Only Metric That Really Matters For Long-Term Bank Of America Shareholders [View article]
    I like your analysis. However, I believe a comparison of assets with those of Wells is more probative. I believe BAC's Merrill and US Trust make BAC worth more than Wells, not to mention more deposits and simply a larger, albeit poorly executed operation.

    The really big advantage both JPM and BAC have over Wells is $100 bil. Credit card books compared to Wells $27 bil. or so. Tag a net 8.5% interest on a $75 bil. difference and you have an advantage of $6 bil. a year over Wells.

    Another real plus is the DTA of $30 bil. for BAC. Over the next 3 years this becomes hard cash if earnings get closer to "normal. What is "normal?" I believe BAC ought to be able to $4+ bil. more than Wells if it can halfway emulate Wells operationally. I think a market cap of 14-15 times earnings is quite achievable once the market realizes the banks are vastly better capitalized and specifically BAC has put serial, nutcase gamblers as CEO's in the rear-view mirror permanently.

    Put a 14 PE on $24-$26 bil. earnings and you get a market cap that is $360 bil. plus...around 1.5 times book value....Ok, shoulda got there the easy way like you did...but it is nice to get there using income analysis (which I prefer) too.

    Thanks
    Aug 17 02:15 PM | 4 Likes Like |Link to Comment
  • Bank Of America: Short-Term Obstacles Outweigh Long-Term Value [View article]
    It seems the main premise for concern is uncertainty, timing of resolution and final cost of litigation. No? Mgmt made it pretty clear that it has reserved a bundle toward the $14-$17 bil. settlement with justice. BAC already offered $14 bil. With justice countering at $17.

    It seems that this is the final piece of the litigation puzzle(ok, fingers crossed) and the loss range is pretty well defined and mostly reserved. I really don't think there is anything big, or at least $billions big left. Therefore I sort of challenge your entire "litigation uncertainty" premise with all due respect.

    That said, I have a bundle of BAC warrants, but larger bundles of Wells and JPM.

    Nice article...thanks.
    Aug 5 09:01 PM | Likes Like |Link to Comment
  • Update: JPMorgan Earnings [View article]
    Yup, just shifted a big chunk of my wells to jpm...do the math, based on eps jpm ought to be 45% higher than wells. Perhaps with a bit of a discount for jpm because Wells is so reliable, but I still see jpm heading to the high 60's forthwith.
    Jul 15 01:42 PM | Likes Like |Link to Comment
  • Wells Fargo - Solid Results, But What About The Risk-Return Appeal? [View article]
    Agreed, a solid cash/capital position is extremely desirable, it has paid off in the past and will in the future. That said, the required 8% is very high by historical standards and with much less capital Wells survived and thrived quite nicely.

    Yes, I can see a further 1% to 9% as Wells mgmt said was a goal. Now Wells is at 2.2% above the surplus of the surplus. I just think something might be cooking. That extra, extra 1.2% is about $15 bil. to repurchase now or maybe buy some risk weighted assets (about $150 bil. Worth)

    The much belated large-scale repurchase authorization of 350 million shares was accomplished in March and the 39 mil. Barely moves the needle against employee grants. I'm not complaining, but something might be in the air or near the air.
    Jul 13 04:40 PM | 2 Likes Like |Link to Comment
  • Wells Fargo - Solid Results, But What About The Risk-Return Appeal? [View article]
    Nice write-up. Thanks. I'm very long on the big banks, especially Wells.

    I think Wells has pretty easy potential to add upwards of $15 bil. to net income when NIM even begins to normalize. I just want 100 basis points for this.

    I notice that the buybacks were skinny in Q2. Wondering if they might have a big acquisition up their sleave? Perhaps a big euro loan portfolio or even a bank...admittedly, the latter is out of their modus operendi, but something seems to be garnering their capital hoarding...they are at 10.2 modified Basel III...about $15 billion more than Stumpf said they need. (0n record saying they need 9% which is 100 basis points over required). Any thoughts on the above?

    Thanks again.
    Jul 13 01:09 PM | 1 Like Like |Link to Comment
  • Wells Fargo: Steady As She Goes? [View article]
    Nice analysis. I agree. What gets me excited about Wells though (and BAC...jpm) is 2015 NIM expansion. What are your thoughts on the possibility of reverting to something approaching historical norms and the effect on net income for wells?
    Jul 9 07:16 PM | Likes Like |Link to Comment
  • TripAdvisor: Eyeballs Growth, Can't Justify The Valuation [View article]
    Yup Tony, you got it. They have a monopoly. I posted on that other trip article re my experience with trip internationally, which concurs with your view.

    Recently somebody wrote somewhere that the TRIP site per visitor monetization rate is a fraction of FB's. It should be the reverse. People visit Trip because they are near-term buyers of relative high-end items. These site visitors haven't yet made up their mind so they can be persuaded. The ability to immediately close the deal with an "easy" to accomplish booking makes trip more valuable to visitors to this monopoly and will earn trip monopoly level margins...my thesis anyway....margins that will be much better than FB margins per visitor.

    Lonely planet is dwarfed by Trip on the street and in terms of usage, Frommer is out of business, and the other book based travel guides will soon follow, further enhancing the Trip monopoly....and Trip is totally in its infancy in terms of monetization....my thesis anyway.
    Jul 7 05:17 PM | Likes Like |Link to Comment
  • TripAdvisor: Eyeballs Growth, Can't Justify The Valuation [View article]
    Let's debate this the afternoon of July 23. Ok?
    Jul 7 02:43 PM | Likes Like |Link to Comment
  • TripAdvisor: Eyeballs Growth, Can't Justify The Valuation [View article]
    I invest medium term or longer and don't do stops..or shorts..paid $82 in early may so I have a way to go to have a loss to stop....
    Jul 7 08:34 AM | Likes Like |Link to Comment
  • TripAdvisor: Eyeballs Growth, Can't Justify The Valuation [View article]
    Brice, it is tough to finely value TRIP. The value is very tightly leveraged to what the market perceives as its earnings potential at a given time. I agree the earnings potential is up in the air and it had better be able to demonstrate that it is capable of netting $1 bil. annually in the not too distant future to justify (and then some) its current valuation.

    I perceive it will quite likely become the Disneyworld of web travel and leisure planning. The Disneyworld model in Florida is one designed to fully capture the visitor and never let him out of its vast complex...only to hop on a plane home, never having seen any of the remainder of Orlando or Florida.

    Trip can and is capturing the entirety of the travel planning experience without the need for site visitors to go elsewhere. Now visitors can search preferentially reviewed hotels, vacation rentals AND book them without ever leaving the TRIP ecosystem. (Soon restaurants) Next will be shopping and attraction bookings and targeted ads to sell nice things to the affluent group of Trip site visitors.

    Will Trip make $1 bil. net income one day in the near future assisting 260,000,000 monthly site visitors with bookings and tempting them with other goodies so as to justify a $15 bil. market cap.? Yes, I believe so. The real question is whether it might make $5-$10 bil. annually in 2-3 years doing this with perhaps 750,000,000 monthly site visitors? Another question is whether Google might decide the synergies of Trip and its platform are just too great to pass up, even before Trip demonstrates its true earnings potential.

    Yeah Brice, I'm long and I believe the shorts just might be certifiably insane.....does this position lack subtlety? (And yesss...all the bad things could still happen to Trip, my eyes are open)

    Jeff
    Jul 6 05:23 PM | Likes Like |Link to Comment
  • TripAdvisor: Eyeballs Growth, Can't Justify The Valuation [View article]
    Nice support for your position Amir from a numerical extrapolation standpoint based on history. Just wondering whether you put any credence in mgmts discussion at the cc? Gathered that the last 12 months was a pain for gain consolidation period...like a lot of pain...meta-search, general positive changes (vacation rentals, hotel listings & direct Trip mobile bookings and restaurant bookings) with a ton of gain in the present and near future ...not to mention a major tv campaign that is cost heavy at the outset...

    Your analysis lacks any real qualitative support for your conclusion that growth will be linear, or at least close enough to linear to make the stock highly over-priced...I get a much different feel for this company based on boots on the ground analysis, the actual changes in the website, mgmt discussion of its monetization efforts (that are in their infancy) in the cc and elsewhere.

    Query: are you an in-depth user of Trip services? Historically, so you can ascertain the breath and depth of the recent huge changes? I'm not trying to be condescending...I usually think just like you on these momentum plays...especially ones with no p/e, but shorting TRIP? Hmmmmm, you're in good company (many shorts) and I've bought quite a few of those shorted shares. Time will tell.

    Btw, thanks, nobody seems to want to discuss this company anywhere...this is a breath of fresh air...from a smart guy.

    Jeff
    Jul 5 07:20 PM | 4 Likes Like |Link to Comment
  • At Current Levels, Shares Of TripAdvisor Are Priced For Perfection [View article]
    Michael an excellent analysis...thank you. I'm a TARP warrant investor in big banks and love fundamental analysis intertwining macro and micro factors with hard numbers as you have so eloquently accomplished. I'm not a tech, social media nor momentum stock investor. TRIP is a major exception for me. Bought a lot of it @ $82 in May.

    My purchase is rooted in a Peter Lynch "One Up on Wallstreet" sort of premise. I have traveled extensively over the past decade and have been a TRIP user addict. Having spent 4 months in Thailand and Vietnam last winter, including remote parts I witnessed that TRIP literally owns the hotels and restaurants. There are TRIP signs proudly hanging everywhere in Sapa and Hoi An Vietnam as well as Chiang Mai Thailand and the proprietors knock themselves out for great reviews.

    There are no Expedia, Priceline, Google or Facebook signs to be found...just Trip...which now is anchored in 22 languages I might add. Trip is literally the judge and jury for these business and in many cases the sole source of customers. (FYI, google "Secret Garden" hotel in Chiang Mai on Trip's site.. In a very recent post the owner of this great place laments the huge loss of business because Trip (rightfully) relocated the hotel to a town outside of Chiang Mai...a killer, because Trip is where the get their guests....

    Obviously as Lynch points out a great biz doesn't necessarily translate to a great, or even good stock pick..the price has to be right for the shares...at first blush the numbers only dubiously support the current stock price, or even 1/4th the current price for that matter.

    I believe Trip has always been a great site, providing great value to all constituencies. I started following the company in earnest about 8 months ago wondering whether Trip will be able to monetize its product. I've concluded that it is now on the cusp of monetizing in an extremely big way. Here are some factors:

    Hotel bookings. I have never used Trip to actually book hotels. It was a royal pain in the ass. You clicked on "show prices" and 6 different travel websites simultaneously started downloading on my PC or ipad...once loaded, I got to sort thru each...yup an ass pain and I wouldn't do it. That is now totally fixed..like in the last several weeks.

    Now all hotels have links to online travel agents...a few months ago less than a third did (a guess...educated though). As I write this I believe the number of Trip users that will click to a hotel directly from Trip to a hotel or agent has grown multi-fold...like over the past couple of months.

    Restaurants. I've always loved Trip for restaurants...Europe, USA, Asia...however why didn't Trip figure out a way to get money from 2.2 million restaurants to whom Trip travelers are sent? As you pointed out, this is happening with recent initiatives. I just don't believe that you realize the enormity of this to Trip..I believe it will be huge.

    Attractions and shopping. Trip hasn't even started going there, but the CEO in the recent CC agreed this stuff is on their mind..and Trip mgmt does move quickly.

    General advertising revenue. I believe the Trip customer demographic is without peer on the web, or anywhere for that matter. What would Rolex, Mercedes, Chanel or McCormick and Schmicks pay for a Trip web viewer per click compared to a generic reader on Facebook or elsewhere (especially with some other inter-connected data points, like whether they read about Le Meridian hotels..etc) My guess is that Trip targeted ads from non service/travel industry sources will be huge one day...soon.

    Trip is a target? You bet. Facebook, Google, Amazon would all do extremely well to combine with Trip...$50 bil. Wouldn't be too much to pay by google. FB paid $19 bil. For What's App...what's up?

    Yes Michael, I love your analysis, but sometimes a little Peter Lynch snooping is what turns an ostensible dog into a four-bagger IMHO

    Jeff
    Jul 3 06:00 PM | 4 Likes Like |Link to Comment
  • I Might Very Well Be Wrong About Bank Of America [View article]
    I like it! There really never is a "wrong or right," so long as the person carefully, thoughtfully and intelligently sets forth factual and analytical premises. You meet the test IMHO Regarded. Facts change, caution is still warranted with BAC, but some less now. BTW, I, like you prefer Wells and my warrants are weighted accordingly.
    May 27 03:14 PM | 3 Likes Like |Link to Comment
  • Bank Of America: Legal And Regulatory Woes Disguising A Double In The Making? [View article]
    Nice analysis Brian. I have a bunch of BAC and a lot more wells.. BAC is my spec bet. In both cases I hold in tarp warrants.

    I believe BAC will in fact see ROA in excess of 1.4% within 3 years...well do wonders for the stock.

    As for needed capital, I believe the quality of the assets makes a huge difference in determining appropriate levels. I also believe that requiring more capital and better defined (reserved if need be) assets is a very good thing.

    Presently the assets and capital levels of the big banks is better than anytime in history. (Ok, fingers crossed). I'm of the opinion that the significantly greater capital requirements of SIFI banks will not put them at a competitive advantage going forward. Much like the economy of scale depicted in your $100 mil. private placement example, the added capital simply further increases SIFI bank's advantage.

    An interesting consequence (probably unintended) of all the layers of new, and improved capital for the giants is that they have better credit standing of their own...the so-called "unfair" lower cost of funds and the consequent ability to pass those savings on competitively...literally squashing smaller banks that try big things.

    Like you (and Buffett) I love the perch the giants are sitting at now. I see BAC easily topping $35-40 on a 1.4% ROA. Have we talked about normalized economy, interest rates loan demand and $45 bil. of income tax free earnings going forward? (Coupled with a bunch of extra capital)...yeah...13 times $30 bil. Of normal earnings gets a $390 bil. Market cap...like $38/share...sooner than one might think.
    May 23 07:46 PM | 2 Likes Like |Link to Comment
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