Rabbitisrich

Congratulations everyone. Now you can promptly forget GIPS and the asset manager code of conduct. Good luck on the next test fareastwarriors.

About 70-30 common to A warrants. 6 years is a long time, and the A warrants get interesting if BAC pays out $3 over that horizon. Depending on how you model the long-term earnings power and the mix of buybacks to dividends, the A shares can greatly outperform the common.

Thanks for the attachment.

There are still plenty of regionals with improving or bottoming credit metrics, trading at <= 5X PTPP, likely overcapitalized by 10%+. Regionals don't compete with the big four on non-interest activities. They just make more on NIM AND experience lower charge-off rates. If you are worried about geographic concentration, just make a basket.

The Valueline 1-pagers are my primary sources of ideas these days. So handy to carry around on a tablet or phone.

I've been steadily talking myself out of doubts about some investment banking operations. It's like watching the market price a Starbucks for having bad coffee and overpaid staff, ignoring that it's planted in some of the best locations.

You are right, but it looks like the author is playing with semantics to enhance his implication of excessive leverage. He uses the term equivalents but then uses the full notional values to suggest high leverage on invested capital.

Something is clearly funky, but it US banks aren't necessarily at huge risk. Quantifying exact damages will be a problem. Look at daily 3 month libor in USD compared to 3 month AA commercial paper (fin + non-fin, it doesn't make a huge difference) and to effective fed funds. It matches pretty closely. Because banks lend to each other in various ways, it would be difficult to lock down one ask and say that's the "real" LIBOR.

EBITDA can be useful in those circumstances, particularly if you don't limit yourself to equity. But even if you do, companies with similar EBITDA potential but different tax/interest schedules might have much closer private market than public market values.

http://alephblog.com/2012/07/06/an-analysis-of-three-month-libor-2005-2008/

If you are comparing companies within an industry, and you decide that different expense rates are largely timing differences, then EBITDA will look past the noise that FCF picks up. If you use an average, or some other smoothing process, then high growth can distort FCF type measures simply by overweighting recent information, so timing differences can lead to incorrect relative valuations. That is one example, but I definitely see how EBITDA can be used to justify, rather than to measure.

Yes, but I bet that Parsad could also link those traits to fortunate bumps like good role models, friends, etc... Plus, it's way easier to be ambitious when you see a pathway to be rewarded for effort.

Nothing wrong with the metric... just in it's use. Starting from EBITDA can help to look past accounting differences and cyclical differences in capex spending. You isolate those other measures and try to figure out the source of difference and how it affects EBITDA. The inexplicable part is when you see a fast n' furious multiple applied to arrive at a valuation.

Look at the Sexyama gifs that I posted in an earlier link. A technically sound opponent spots weaknesses in your posture. In the first gif, Sexyama catches the opponent's raised lead leg with his hip, which allows him to tip over the rest of the body with little effort. In the second series of gifs, the opponents rushes into Sexyama, bringing his feet together and accidently placing his center of gravity, again, too close to the Sexy's hip. A quick sweep and counterbalancing arm hook sends the opponent flying. These aren't very muscular moves. It's largely good timing and leverage.

Cort's report is consistent with the last manufacturing PMI. Look at the selected comments from machinery, metals, electronics, apparel, furniture, and chemicals.

Look at 4:42. The young man jumps to where he is guided. There are beautifully efficient throws and trips that can be executed against less supportive persons. These gifs of Sexyama show more realistic applications of leverage and timing: http://www.cagepotato.com/gifs-of-the-day-akiyama-even-makes-takedowns-look-sexy/

Unreal, indeed. Very cooperative. http://www.youtube.com/watch?v=G90YcgwAZTM

Keep in mind that IQ is just a summary of complex processes. The same number can cover people with large variations in specific aptitudes. In any case, the investing effect of "intelligence" is relevant so far as it effects your decision rules. If you strip away any romantic notions of intelligence and talent, and just look at relative strengths and weaknesses, then you can strategize accordingly. I tend to be overly optimistic on companies that I own (I tried to watch as much CBS as possible when I owned it). Solution: keep separate books for long thesis (usually 2-3 paragraphs) and worry points. Something about writing the bullish story, and then setting it aside, clears my mind.

The market doesn't let people get away with outsized returns on employed capital if it can help it. Eventually, you hit a wall with leverage and sales growth, and you have to dip into profit margins to make more money while still achieving acceptable marginal ROIC. The weird thing about all these mean reversion articles is the static nature of the reversion. I guess sales hold and some expenses just increase? The increase in expenses affects nothing?

Lesswrong has a few gems. This study argues that domestic politics predicts elevated levels of anti-american sentiment. Such sentiment increases in countries where an islamic group competes with a secular group compared to countries where the islamic group has secured power. http://www.volokh.com/2012/06/24/why-do-they-hate-us-4/

http://www.nytimes.com/2012/06/25/technology/companies/with-tablet-microsoft-takes-aim-at-hardware-missteps.html?_r=1&pagewanted=all It's not a data oriented article, but still provides good perspective.

The ratio should be apples to apples. Market caps are nominal, so nominal GNP is appropriate.

Good article from Conor Sen on demographic pressure: http://www.minyanville.com/business-news/the-economy/articles/household-debt-mortgage-mortgage-debt-economic/6/25/2012/id/41956

The other recent acquisitions have been domestic portfolios (or secured by domestic assets) purchased from foreign domiciled banks. Is this a similar transaction, or is WFC maintaining a foreign office?

Seattle nearly led the nation in unemployment that year. Rents were higher in 2000 vs 2002. The tech bust was especially painful in Seattle. I was a landlord of two single family homes at that time (Kirkland and West Seattle) -- I remember it well. Thanks for that detail. Looking at this chart on apartment vacancy rates, the recent recession wasn't even the worst period for landlords in the last several decades: http://www.duprescott.com/productsservices/articleinfo.cfm?ArticleId=575 According to the article, only 1800 units were opened in 2011, but a recent Bloomberg article referenced plans to build 4600 units in Downtown alone.