biaggio

For whatever reason (I think it was from someone on this message board) I usually scan ZH---I tend to be optimistic type , the doom + gloom there helps to balance things. I have found it helpful to read conflicting view points. A quote that I have written down as a reminder from one of the posters here: "The first principle is that you must not fool yourself - and you are the easiest person to fool." -- Richard Feynman And I have been fooled more than my share, p.s 17m views per day that is amazing

Not very knowledgeable re investing in BAC but am watching +learning. Different perspective re recent earnings from zerohedge http://www.zerohedge.com/news/bank-america-posts-adjusted-loss-excluding-benefits-spread-blow "the reported net income number was $6.2 billion, which includes, "among other things, $4.5 billion (pretax) in positive fair value adjustments on structured liabilities, a pretax gain of $3.6 billion from the sale of shares of China Construction Bank (CCB), $1.7 billion pretax gain in trading Debit Valuation Adjustments (DVA), and a pretax loss of $2.2 billion related to private equity and strategic investments, excluding CCB. The fair value adjustment on structured liabilities reflects the widening of the company’s credit spreads and does not impact regulatory capital ratios." So netting out the CCB gain and the strategic investment loss leaves us looking at the two items entirely affected by the blow up in the company itself manifested by its soaring spreads: the $4.5 billion in structured liabilities adjustment and the DVA which add to $6.2 billion, which is.... what the company reported as its EPS! In other words, Bank of America had $0.00 EPS excluding for the accounting BS that is provisioning for buying "CDS on yourself." And since both of these adjustments flow through the P&L, the reported revenue of $28.45 billion (much better than the expected $25.92 billion) had to be adjusted $6.2 billion lower, and confirms that absent this most blatant accounting gimmick, the revenue was a huge miss. Yet despite a plunge in the company's NIM, a $1.7 billion reserve release, and a substantial plunge in BAC's provisioning for Rep & Warranties from $14 billion in Q2 to $0.3 billion in Q3, something which will again haunt BAC, Bank of America increased its staffing from 40.4 thousand to $42.1 thousand sequentially"

Enjoyed reading this thread, You guys are funny. Stanley-enjoy it while it lasts. It was around 30 it will all changed for me --- you will be spending 6000-9000/month soon enough (a wife and a few kids, will do it). Do not avoid marriage + kids , as its worth it. Moore, how did you accumulate 6 figure brokerage account at such a young age---I would love my kids to do this + I would be willing to feed them several times a week + have them take home leftovers.(I have one now going to school-when he comes home from school he leaves with all the groceries + food he can carry.) Moore I assume your family/parents taught you well-how did they do it? Or someone taught you to invest early on?

I was in NYC last weekend for a holiday-what a great city. Can understand the insane rents.

"Occupy Wall Street" spreading to cities in Canada http://www.bloomberg.com/news/2011-10-15/canadians-occupy-toronto-montreal-in-wall-street-protests.html?cmpid=yhoo

I think large income and wealth disparities are a natural consequence of a competitive free market i.e there are good reasons why you have income + wealth disparity as you noted. I thought his point was that there is an income and wealth disparity and that there was a risk that the smart guys in the government will try to redistribute or even it out with some sort of wealth tax + he was advising to keep 50% of your assets in things (art, precious metals,gems) that would protect/shelter you from this.

Your post make a lot of sense but here in Canada we have both: free health service for population(pay by government) and low educatrion fees. But I don't think Canadian are known for their entrepreneurship spirit. Instead I think we have a tendancy to rely on our lands that are full of commodities (gold, copper, oil,..) and let foreigner extract it from the ground. Is that not because we have such huge physical resources relative to a small population? Are we maybe more complacent + not as driven (entrepreneurly) as a result? I can t imagine having to worry about medical bills.

http://www.thereformedbroker.com/2011/09/29/notes-from-the-doubleline-lunch-with-jeffrey-gundlach/ "Reagonomics and the idea that you could use deficit spending to "prime the pump" took hold in the early 80's. One of the unintended (or perhaps intended) consequences has been a massive increase in the top .1% of earners' share of total income. When factoring in capital gains, the top 1% of earners in this country are now 25% of total income. This means that some kind of wealth tax is almost a certainty going forward.... On Asset Allocation for the Ultra High Net Worth: Jeffrey says his own assets are now 2/3rd's outside of the "financial system" other than his ownership stake in DoubleLine. This means fine art, gold, gemstones, rental property etc. He says the ultra wealthy should have 50% of their assets outside of the financial system." " Natural gas is very cheap and has a lot of potential in the long-term."

$2200/acre even for swampy land seems cheap, especially if local authorities want to develop it + there are no environmental constraints.

Jeff Grundlach thinks this is a bear market rally---says that bear market rallies "are better then the real thing" which I found funny. Who knows?

and be a real long term investor i.e. don t say you re a long term investor + then sell out 6 months later because you see something cheaper/better or because company is not making decisions for the short term to get a pop in the price to the detriment of long term value. I thought the video gave perspective in Mr Lampert's strategy as a true long term investor like WEB not like most hedge fund investors out there.

http://myinvestingnotebook.blogspot.com/2011/10/video-eddie-lampert-on-long-term.html Good video from Farnham's blog site. Fairly brief. I have never heard Eddie speak before.

Parsad, were you buying recently?

It seems that there is always something to worry about. It will probably be something that nobody is talking about that end up hurting us. I am convinced that governments around the world will rig things so the things we worry about today will be taken care of. If we have deflation, I think it will be a fraction of a % per year. I can t see the government allowing market to crash ala 1929-they will just buy ETF's, stock indexes to prop up market. There are a lot positive things happening in China, but just like having major surgery you never know when you get a complication either during the surgery or in the immediate post operative period. I am sure there will be bad things that happen in China as well. In the long run I am bullish on China + China succeeding will help the rest of the world. I think its good to have something to worry about. It makes one be more careful + thoughtful.

Shane, personally I have been slowly adding undervalued dividend paying securities as a portion(~30%) of my portfolio---all in tax deferred account---its nice getting paid to hold shares. I figure at least I will get some return in a flat market. My personal circumstances may be different than yours as I am approaching a time(age) when I can just stop working.

http://sec.gov/Archives/edgar/data/1310067/000119312511062911/d10k.htm from the 10K Kmart 1,278 discount stores, averaging 93,000 square feet, x own 177 (16.46 million) 29 Super Centers, averaging 169,000 square feet,x own 20 (3.38 million) Sears Domestic operations consisted of the following: • Full-line Stores—894 broadline stores, of which 842 are full-line stores located across all 50 states and Puerto Rico. These stores are primarily mall-based locations averaging 133,000 square feet. x own 514 (68.36 million) Essentials/Grand stores located in 24 states. These stores are primarily free-standing units averaging 117,000 square feet x own 17 (1.99million) Specialty Stores 938 Sears Hometown Stores—Primarily independently-owned stores, predominantly located in smaller communities and averaging 7,700 square feet x 938 own (7.2 million) 59 Sears Home Appliance Showrooms—Innovative stores averaging 5,100 square feet x not specified how much if any they own 106 Sears Hardware Stores and 89 Orchard Supply Hardware Stores—Neighborhood hardware stores averaging 42,000 square feet x not specified how much if any they own 12 The Great Indoors Stores—Home decorating and remodeling superstores, averaging 143,000 square feet x not specified how much if any they own Lands’ End has 14 retail stores, averaging 8,600 square feet x not specified how much if any they own own 38 domestic supply chain distribution centers, l executive offices are located on a 200-acre site owned by us at the Prairie Stone office park in Hoffman Estates, Illinois. The complex consists of six interconnected office buildings totaling approximately two million gross square feet of office space. In addition, we have a campus in Dodgeville, Wisconsin supporting the corporate headquarters, distribution center and customer sales/service operations for Land’s End. We also own an 86,000 square foot office building in Troy, Michigan I am getting ~98 million sq feet on what I can see in the 10K

Thanks Zarley. I agree with your post. It never occurred to me that shareholders could be "taken under" if that is the right term, by Mr Lampert. His large stake and the apparent hidden assets is what led me to my small holding (~2%). Hope you re right ValueBargainHunter. Look forward to ongoing short squeeze.

Making money on money is what makes america great. Do we really want to increase taxes on investments? That will result in less investments. I think we need to encourage people to delay gratification, save and invest more. I love WEB, but his net income is not like ours or most people in this world ie it is almost all passive income. I favor a tax on consumption-everyone else has one. I remember when the GST was introduced here in Canada, everybody hated it but we have all learned to live with it. Don t discourage people from working hard, saving, investing, innovating (new products + services that will make them more money), etc P.S. he made $62 million -that's awesome and I would say he deserves all of it-everyone here in North America has a chance to and some (owner of the Dallas Mavericks-what's his name?) would say an obligation to (try) do the same.

Does anyone have an estimate of what the brands (DieHard,Craftsman, Kenmore, Lands End, etc) are worth? I tried to find a breakdown of numbers(sales, profit) for these in their recent 10K and 10Q but could not find anything. I did read several weeks ago from one of our board member's blog that a comparable set of brands has a current market value of $19 billion. Owns >100 million sq ft of real estate- Is this right? Brands + >100 million sq ft of real estate all for a EV of ~ $10 billion.

I was thinking this in August.

so what do you think the U.S. government is buying with QEIII?

hurray for volatility

http://www.gurufocus.com/news/147597/mason-hawkins-thoughts-on-the-macro-picture-and-his-recent-buys-brka-brkb-dtv-chk-tx-bny-ewg-spy-vti "I think the future of equities will be roughly the same as their past; in particular, common-stock purchases will prove satisfactory when made at appropriate price levels. It may be objected that it is far too cursory and superficial a conclusion; that it fails to take into account the new factors and problems that have entered the economic picture in recent years — especially those of ... the movement towards less consumption and zero growth. Perhaps I should add to my list the widespread public mistrust of Wall Street as a whole, engendered by its well-nigh scandalous behavior during recent years in the areas of ethics, financial practices of all sorts, and plain business sense." — Excerpt from June 1974 speech by Benjamin Graham, printed in Financial Analyst Journal, September/October 1974 -sounds like today "Adapting to a possible 2012 recession would be like stepping off of a curb rather than falling from a skyscraper for these businesses and their values."

Thanks for posting. I am halfway thru reading it. Interesting to read his thoughts back in 1984 Shows how much of a visionary he was...eg envisioning the computer as an common household appliance back in 1984. I only wish I would have read it + taken it to heart back then.

http://www.gurufocus.com/news/146979/joel-greenblatt-talks-about-his-favorite-stocks Mr Greenblatt echoes the beliefs of many here.