Junto

If you are looking for a resource on interviewing in the hedge fund industry, Hunter at Distressed Debt investing has a good website on it: http://howtogetahedgefundjob.com/blog There are several posts of interest. Here is his main blog: http://www.distressed-debt-investing.com/

As I mentioned, I believe it is built off the existing ACH network. I do think the Credit Union likely has a depository account that reconciles the incoming and outgoing transactions. The Credit Union is insured through the NCUA www.ncua.gov/ up to regulatory limits although I do not know how Dwolla titles its accounts to ensure coverage (if it does). Ragnar asked regarding the posting of deposits and transfers. It relates to the sender actually having the funds in the account. Just because the ACH originated does not mean the the funds were available in the account the ACH was trying to pull from. This may result in a return of the ACH. The concern is a Point of Sale purchase where the goods are provided but the account did not have funds available. This is why I referenced needing the preauthorization approval similar to a debit card. If a transaction is preauthorized the bank/credit union as far as I am aware, has to accept the payment against the bank's account. It may cause an overdraft from the account holder if checks or other charges clear between the preauthorization and the settlement. I was trying to find a good comment from an article I was reading last night that explains this in more detail and when I do I will forward it along. I am a commercial lender so I know enough to be dangerous but certainly am trying to understand this area more as I see it as a growth area over the next few years.

Parsard, I am almost certain the backbone of this system is the ACH network. I think he is however trying to improve the network to process approvals faster. Similar to preauthorizations in the debit card network. From my perspective as a banker, it still looks like a riskier situation to a point of sale retail merchant but it has its place for many other transaction bases where a two to three delay delay for approvals is not of concern. I have been trying over the last couple of days trying to breakdown the business model some (more specifically from a financial institution perspective). A bank makes money from every ACH transaction it processes so his Credit Union partner is likely collecting its standard/slightly reduced fee and he is taking a very small spread above. Once the software is perfected, the margins will be significant. The idea from his perspective is to disrupt the small transaction business of Pay Pal and Credit Card firms as that is where he will make the most money. I have been watching this market closely. For those of you who read http://www.inc.com, the latest Inc 500 had a lot of e-payment firms in their top 500 that were financial services oriented showing enormous growth over the past three years. I have been looking to see if there is a service my employer or family financial institutions could take advantage of to drive up non-interest income.

It is the labor structure that is hurting the post offices. They should focus on reduced head count and pension packages versus reducing post offices in my opinion.

Actually a very poorly written book. Disappointing and very limited value.

Shareholder Group, Led by David Polonitza, Seeks to Replace ITEX Corporation’s Two Non-Executive Directors http://finance.yahoo.com/news/Shareholder-Group-Led-by-bw-2269648120.html?x=0 For those of interest.

Not at all surprising given interest rate levels...I think my father financed his house at 12%+ back in 1982 now we are at 3.25%... I liken it to looking at the S&P 500 from trough to peak. The bond market will not be able to sustain these levels going forward.

FYI, banks have to write down to appraisal upon ownership, need to impair/appraise values quarterly for call report, and in Minnesota for instance, after five years need to fully amortize so that after ten years the value is zero on the banks books. The FDIC is currently a stickler on the regs regarding this right now. I know, I am a banker at a community bank. Regarding inventories, look at the attached graphic by the calculated risk blog (http://bit.ly/rliT2q): http://cr4re.com/charts/charts.html?Delinquency#category=Delinquency&chart=MBANDSQ22011.jpg This guy follows the statistics very closely and provides nice summary information. I highly recommend following his site. Here is a link on REO inventory: http://www.calculatedriskblog.com/2011/08/q2-reo-inventory-estimate.html

We are the 53%... conservative response to the we are the 99%. Worth looking through: http://the53.tumblr.com/

Fred Wilson posted an interview he had with Carlota Perez up yesterday. It is definitely worth watching and reading the dialogue in the comments. Wilson has one of the most active communities I have seen in the comments that is both thoughtful and respectful. Check it out: http://www.avc.com/a_vc/2011/10/lineage.html

Looks like I crossed paths with your post...similar thought pattern. I would note that European companies don't buy back stock as frequently as US companies and this explains a good portion of the difference in yields based on my recollection.

Rranjan, I guess I don't focus on yield on cost as much as forward looking returns for all my investments. I review every one every quarter and recently focus much more on position sizing than I ever did in the past. My tendacy is to focus on firms that pay stable if not increasing dividends. Much of the historical returns in the S&P 500 are driven by dividend returns not stock appreciation. It reduces the risk of poor managment capital allocation strategies as companies do not build ridiculous cash hoards and it provides returns that can be either reinvested in the existing company through a DRIP or employed into new opportunities. To me, it is another form of check and balance. I don't always trust management to make the right capital decisions and appreciate a cash return on my investment. The key is that the dividend should reflect a comfortable extra cash flow and not a strain on capital. Rebalancing and review need to happen regularly. There are some I invest in that don't pay a dividend, but very few.

I have been tracking my quarterly dividend growth for the past three years. This is a significant portion of my portfolio. There is a blogger who focuses on this strategy that is not deep, but provides some general information for the novice investor: "Dividend Growth Stocks" http://bit.ly/r5hW2O; I don't like the website but like how he tracks his dividend yield over time and follow via RSS. Another option: "Dividend Growth Investor" http://bit.ly/oqiZLh Lastly, A little more detail in the analysis "Dividend Monk" http://bit.ly/nfV5ME

Buy back initiated this morning: Company Release http://bit.ly/qoMO7A

Here is a list of preferreds that is worth sorting through every now and again: It is a google document http://bit.ly/oOeDmc Hopefully the link works well. It shows yield, payment date, stated coupon, current price, etc... all real time/20 minute delay. Nice resource.

I would add assets that have been sold at the largest prices have been non-earning assets i.e. China Construction Bank and Blackrock* Shrinking non-performing branches likely won't have a material effect on asset sizes because they still have a large footprint and customers will move to the more profitable branches that exist and/or continue doing their banking on-line and with ATMs.

Penn Miller to be acquired is another win for Biglari http://bit.ly/prtw6U

Thanks for the article link. Definitely worth the read.

Article worth the read from @ToddSullivan Here Is Why The BAC/Bank of NY Settlement Will Happen http://bit.ly/pGjpyJ

Saw this article in Bloomberg's Businessweek, and thought of an old posting on here. "Foreign Money Invades Mongolia" http://www.businessweek.com/magazine/foreign-money-invades-mongolia-07212011.html Anyone been tracking Mongolian Growth Group? http://www.mongoliagrowthgroup.com/financials.html Too far out there for me, but interesting.

+1 Pushed to dilute is the main risk with the banks today, and everyone that is following banks know about overzealous regulators. I wish regulators were more of a countercyclical force, as they are meant to be, but that is the world we are leaving in. +2 and I would add the general consumer marketplace. Buffett still holds weight with consumers as a point of reference. This provides defense against both worries of consumers and placates regulators with a generally small dollar amount in the bigger scheme of things.

Bronte Capital has a post up on BAC today. Definitely worth the read. http://bit.ly/qMMtvO

This was out yesterday if you follow on Stocktwits. http://stocktwits.com/symbol/BAC

I don't see it as an overnight turnaround by any means and I am getting more comfortable with management as time has moved along even though the stock price has gone lower. I think Moynihan is taking the right actions; pulling back on international credit card lending, trimming non-core investment stakes in Blackrock and potentially China Construction Bank. The bank will shrink itself to meet capital requirements in my worst case scenario. Here is a synopsis on Moynihan from Fortune in July if you haven't seen it already (http://bit.ly/nVlGTl). This is a quote I like from the article: In a brief analysis, say they need to raise $25 billion at $5/share. That would be 5 billion shares to add to the existing 10 billion and result in a tangible equity of $8.47/share. The earnings power would decrease as well, but given analyst estimates of $1.48/share on average, the new estimate would be $1.00/share. It is still trading at six times next year's estimates. Let's say they can accomplish a stabilized 1% ROA, you are looking at $1.50/diluted share after the capital raise. Stock is at four times stabilized earnings. This is just a brief. I think there is enough downside protection at just over $6.00 to make this extremely compelling at these levels if you can be comfortable with unknown put back risk and Euro issues that will play out over the next few years.

I have written off Munger for anything more than entertainment value. I wish him the best of luck.