wescobrk

I should probably turn my Ira over like Eric. Watching citi everyday is distracting me from my work. Down every day for two weeks. About 16 percent discount to tangible book. New ism number out and below expectations. Dimon, Moynihan, etc all think 3 percent GDP this year. IMF thinks global growth will increaese. disconnect to everyone saying economy is improving with 1200 point sell off in last couple of weeks.

"Comparing multiples to book or tangible book may not be the best alternative for Citi right now. If you instead look at price to basel 3 tier 1 capital used at Citicorp (i.e. excluding Holdings) and compare that to BAC and JPM, they are very similar (1.4x in all 3 cases). This makes sense considering that capital tied up at Holdings has a negative return now. However, this ignores the high probability that Holdings will break even in the near term as well as the pace of capital build up at Citicorp from earnings, DTA use and decline in Holdings RWA. Citi is on its way to massive over capitalization in the next 2-4 years and the stock price doesn't reflect it. This is perhaps reasonable given Citi's performance in the 2012 ccar (who knows if shareholders will get their hands on that excess capital) but it sill ignores the ~20% annual growth in basel 3 tier 1 capital that Citicorp can achieve in the next 3 years just by staying the course (i.e. using Wall Street consensus numbers, which assume modest earnings growth). As a side note my work relates to investing in EM and I'm from Argentina. The issues going on there are specific to the country, I don't think the chances of contagion are high, but we'll see." Thanks for your comments. I've seen estimates for 25 cent dividend and 5-7 billion in buybacks in March. They are estimating roa of 90-110 by next year so I'm assuming assuming holdings will be at break even by late next year. 2015 and beyond ccar should be very attractive.

I honestly don't know. It use to sell at multiples of book value but that won't ever happen again. It probable sold around the same multiple of bac and jpm pre 08.

It looks like cities max exposure to Argentina is 17 cents a share. They have a lot more exposure to Brazil and Mexico. That would be the time to get worried, if it spread. My comment about it not lasting more than 2 weeks is speculation of course as psychology can feed on itself. My earlier post was trying to wrap my head around the 25 percent discount to bac. If there is contagion with em I suppose that discount is warranted. Mexico seems to be doing quite well. Anyone on thew board follow EM closely? If so, what is the probability of contagion and things getting much worse?

They do have a bigger presence but so far I haven't heard of any impairments.. Their max loss to Argentina is less than a billion. If this doesl turn into 97-98 again I can see that but it's a lot different now compared to then. Floating currencies, less external debt. China just released their January pmi at 50.5. They are still expanding. I think within 2 weeks we will shoot upward. I plan to be better protected in the future though.

So far I look like an idiot with citi. I don't understand why bac is trading at 12.5x earnings and citi is at 9.5. I didn't think the market would wait till March 1st and then the banks would shoot up for ccar 3 years in row. I thought it would happen by now. I'm ready for mid march when the dividend raise is announced and in April when citi can start buying back stock. In the aftermarket it was trading at 15 percent discount to tangible book but it earned 8 percent last year and this year is 9 percent on tangible book. The irr is well over 10 percent. Interest rates are at zero and the 10 year treasury is at 2.6 and we are suppose to grow at 3 percent GDP according to Moynihan and other bank ceos with the biggest loan and deposit growth in years. The risk premium with citi is about 800 basis points. I feel like I'm living on an island and no one else sees this. I'm not arguing it should be at 12.5x earnings like back but 9.5? I don't get it. It should at least be at 11x earnings. The bloody earnings rate for the investor is higher than the multiple. And this is a company that earned 4.42 this year, projected by all analysts to earn 5 this year and 5.85 next year. And a dta worth a third of the market cap. That's part of being a value investor willing to look like you are on a deserted island.

Anyone want to chime in on ccar results for bac, c and Jpm? Below is estimate from kbw. No idea how accurate this will be but might be in the ballpark. Here are the seven big banks where KBW expects to see increases of more than 50% in returns of capital to investors in 2014 (the second quarter of 2014 through the first quarter of 2015) from 2013 (the second quarter of 2013 through the first quarter of 2014): Citigroup (C_): Dividend payout of $594 million plus $7.686 billion in share buybacks, for a total 2014 capital return of $8.279 billion, increasing from just $121 million in 2013. Capital One Financial (COF_): Common-share dividend payout of $801 million plus $2.0 billion in share buybacks, for a total 2014 capital return of $2.801 billion, increasing 123% from $1.259 billion in 2013. Bank of America (BAC_): Common-share dividend payout of $2.599 billion plus $5.140 billion in share buybacks, for a total 2014 capital return of $7.739 billion, increasing 81% from $4.270 billion in 2013. Zions Bancorporation (ZION_) of Salt Lake City: Common-share dividend payout of $52 million, less a net issuance of $2 million in common shares, for a total 2014 capital return of $50 million, increasing 78% from $28 million in 2013. SunTrust STI of Atlanta: Common-share dividend payout of $318 million plus $569 million in share buybacks, for a total 2014 capital return of $878 million, increasing 74% from $504 million in 2013. Wells Fargo (WFC_): Common-share dividend payout of $6.816 billion plus $5.563 billion in share buybacks, for a total 2014 capital return of $12.379 billion, increasing 69% from $7.325 in 2013. BB&T. Common-share dividend payout of $724 million plus $462 million in share buybacks, for a total 2014 capital return of $1.186 billion, increasing 55% from $767 million in 2013.

Fed might actually pause at 75 on wed if we keep dropping like this.

"Come on, check your number" I checked Bloomberg from my phone. Apologize if misread it.

For the more able people on the board than me regarding macro impact, how big of an impact can the news of the past couple days affect global growth? I just watched Moynihan on cnbc thinks he United States will grow 3 percent and 3.6 percent for global growth.

Nice job! Futures are down another 335 for Monday on the Dow

I can't find anything on the date from the fed. Last year was march 15th. Anyone know when the fed will release the date?

I want to go. I hope I can meet others from the board.

Yesterday Cramer said sell citi and buy bac. C was below tbv and bac is north of 25 percent. Needless to say, I did the opposite. I'm glad Cramer is on the air as he helps me make money with he almost always go with the herd mentality.

Anyone see this guy on cnbc this morning? At first I thought he was joking but he is still arguing we have been in a recession for the past two years.

I borrow the maximum amount under mine. I'm captive to fidelity funds which I'm not happy about, thus the loan.

I know the board doesn't typically discuss real estate but I would love to get some insight since there are so many bright people on this board. I've never bought real estate before but there is a property that I know very well going for auction on tues in texas. Lets assume I'm aware of all liens and encumbrances and ready to buy. In texas I've been told I have to pay in full with a cashiers check. I'm sure this is a dumb question but ill ask anyway. Since no one knows what the winning bid will be for that morning what happens if the cashiers check is higher than the winning bid? I would love to buy it at a 50 percent discount. Is that uncommon? Meaning from other houses on the same block. I'm assuming it will go for pretty cheap because the house can't be viewed prior to purchase (except from the outside). Thanks for any help! I bet Jeff would know how to handle this. I sold a lot of my bac options today to free up some cash (thank you citi for the large pop!) If I don't get it then ill rebuy bac on tues probably.

Congrats Jeff!

92 percent in Roth 158 percent in taxable

In 2000 it was 200 percent to GDP. We aren't in a bubble but it definitely isn't cheap.

One more poll!

Awesome! Great read. Thanks for posting. Lots of great stuff. "Managing 1 million should outperform S&P by 10 points without leverage or extra risk."

"Buffett originally started out as a chart guy" Haha, I think Buffett said that lasted till he was about 13 from what I recall from biographies. This guy is 17. He sounds ambitious. Will probably do well in life.

He says in the interview he is a chart guy so not sure why he and Bloomberg compare himself to Buffett. http://www.bloomberg.com/video/a-sneak-peek-at-this-year-s-hot-holiday-movies-wkUy_wOHQNmXIrwssNPJJA.html

The study can still be read. What's the big deal about making the comment?