Dinar
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Posts posted by Dinar
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Bought INDT, sold MANU Dec 2022 21 puts
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By the way, spoke with someone who works for a large hospital chain in NJ. 3% wage increases for staff for 2023, so certainly no wage inflation there.
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Thank you sir!
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1 hour ago, Xerxes said:
The Western and Israeli intelligence are not saint, if they could create a civil war at a cost of 100,000+ death they would. No ethics. It be would be as easy as drinking water. No second thoughts. All fun and game. And 15 years later they would get Michael Bay make a Hollywood movie about a few fancy Navy Seals doing “heroic” things. A broken country is far less likely to be a threat than a stronger one.
But fair is fair, this specific situation is on Iran’ own government mismanagement of resources along other things (a very long list). And it has been compounding for a long time. Sadly Western sanctions made the bad actors stronger as they control the international trade routes, borders. The initial blame though lies squarely with one person only (“paramount leader” and his cronies), who on an unrelated note, interestingly enough is not even Persian but is an ethnic Azerbaijani lol.
What is so unique about the death of that lady was that she was a nobody. Just came to visit the capital as tourist. She was not an activist. She was not journalist. She was not trying to make troubles with government. Just a normal person from the provinces going to visit Tehran. And that struck a chord with people, who saw her as themselves, or their own sister etc.
Do you think that had ayatollah Montazeri became supreme leader, things would have been different and how?
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22 minutes ago, ValueMaven said:
Bank Preferred are very interesting ... ive been buying a bunch recently
Which ones? Thank you.
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On 7/24/2022 at 2:23 PM, Spekulatius said:
I am enjoying these guys (Blink - 182) more than I thought. Their records around 2000 (Dude ranch, enema, Take of your pants and jacket) are the best, Imo:
Punk rock/ pop, fun, simple and pure.
Spek, there was an excellent Germany Gypsy female singer in the 1950s-1970s. I think her first name starts with D, that's all I know, I once heard her on the radio in a small town on the Rhine a dozen years ago. Do you by chance know the name? Thank yo.
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I think that he has been really bad at choosing successors and really good at paying them insane amounts.
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13 minutes ago, Xerxes said:
Here is another situation, where in this case NATO bombed the Chinese embassy, an entire building, and called it an accident. If that was an accident, than I think one can let go suspision of Kremlin targetting poor farmers in Poland and for what.
The night the US bombed a Chinese embassy - BBC News
United States bombing of the Chinese embassy in Belgrade - Wikipedia
Don't forget Kursk submarine accident. If I remember correctly, there were rumors that a US sub accidentally rammed it.
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23 minutes ago, formthirteen said:
The 51st Mounted Vodka Brigade is already celebrating the victory over Poland:
No opinion on the war other than it will be a long one and both sides seem to be losing.
You know Poles crushed Communists when they invaded Poland in 1919, thank God for Pilsudski
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7 minutes ago, UK said:
What obvious implications possible war ending would have in terms of economies and markets? Perhaps it would be somewhat disinflationary at least in short/mid term? Also bullish for Europe?
The imminent onset of winter—coupled with fears of inflation spurred by mounting energy and food prices, the billions of dollars of weaponry already pumped into Ukraine, and the tens of thousands of casualties on both sides—has prompted talk in Washington of a potential inflection point in the war, now in its ninth month. The U.S. and its allies are pledging to continue supporting Ukraine, but top officials in Washington are beginning to wonder aloud how much more territory can be won by either side, and at what cost. Some European officials, meanwhile, are more bullish on Ukraine’s chances. “There has to be a mutual recognition that military victory, in the true sense of the word, is maybe not achievable through military means, so therefore you need to turn to other means,” Army Gen. Mark Milley, the chairman of the Joint Chiefs of Staff and the top U.S. military officer, told the Economic Club of New York on Wednesday. “There’s also an opportunity here, a window of opportunity, for negotiation.”
“It remains to be seen whether or not there’ll be a judgment made as to whether or not Ukraine is prepared to compromise with Russia,” Mr. Biden said at the White House. He added: “They’re going to both lick their wounds, decide…what they’re going to do over the winter, and decide whether or not they’re going to compromise.” Washington has signaled to Ukraine that at a minimum Kyiv needs to appear open to a negotiated solution. Mr. Biden’s national security adviser, Jake Sullivan, conveyed that message to President Volodymyr Zelensky and his lieutenants in Kyiv on Nov. 4, suggesting that Kyiv would gain leverage by showing openness to negotiations, according to people familiar with the discussions. Two European diplomats briefed on the discussions said Mr. Sullivan recommended that Mr. Zelensky’s team start thinking about its realistic demands and priorities for negotiations, including a reconsideration of its stated aim for Ukraine to regain Crimea, which was annexed in 2014.
Officials in some European countries, particularly in the east and north, have said that publicly pressing for talks could hurt Ukraine’s efforts and play to Russia’s aims of dividing the alliance. “We need to talk about the cost of peace,” one northern European official said. If the war ends now, “The message the Ukrainians would get is that their fight was meaningless. The message Russia would get is that this is time to refit and to rebuild economically. No one believes [Russia] will stop until they achieve their strategic objective.”
Mr. Putin has said that Russia is open to peace talks and argued that if Washington ordered Mr. Zelensky to sit down for negotiations, Kyiv would do so. With the latest setbacks in the battlefield, Western officials have said the Kremlin appears to have backed away from its previous preconditions for talks, such as accepting Russia’s annexation of Ukrainian territory.
I am sure that it will cause a stock market rally in Europe, led by luxury goods, cosmetics, and spirits - Russia is a big market and Philip Morris International - Russia+Ukraine 10% of revenues. German machinery companies and Epiroc will benefit - 5% of revenues I believe were from Russia. Other than that, very hard to say. As Truman used to say, do you have a one-handed economist?
If Russian energy starts flowing to Europe as before, that's obviously very disinflationary, of course it is not clear whether Europeans will be dumb enough to be at Russia's mercy again. On the other hand, millions of Ukrainian and Russian refugees are generally hard workers, and highly skilled, so that in turn could push labor inflation up in Europe/USA/Canada if/when these people return back to their homelands. However, this return will in turn depress demand for real estate in Europe/US/Canada.
Assuming something along a Marshall plan is done for Ukraine, that probably will be wildly inflationary as this $750bn figure floated somewhere will be spent and where will the West get the money if not by money printing? Also, given that there has not been a rule of law in Ukraine since 1917, I doubt private capital would be available on any reasonable terms, unless investors considered it charity. On the other hand, Ukrainian diaspora is very numerous, very patriotic (at least in the small but statistically significant self-selected sample size that I have encountered over the last three decades), and quite wealthy, so perhaps I am wrong and the same way Jews financed Israel in the 1920s-1960s, Ukrainians will finance Ukraine. Ukraine is a blessed country in terms of agricultural wealth for instance, historically very hard working people, excellent universities, and many very highly skilled engineers/mathematicians/computer programmers. I would personally buy $10K of Ukrainian reconstruction bonds with zero expectations of ever seeing my money again.
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2 hours ago, Viking said:
Europe has severed its relationship with Russia on energy and pretty much everything else. Finland/Sweden are joining NATO. Eastern European nations (bordering Russia) understand Putin/Russia and understand they are next on the menu should Russia have any lasting success in Ukraine. So they will play an important role moving forward in keeping Europe focussed on the task at hand (getting Russia out of Ukraine and weakening Russia as much as possible).Moving forward, Europe’s energy future will now rest more on decisions Europe makes and less on developments in Ukraine. European energy policy has been a disaster for decades. If Europe continues to do dumb things (like closing down nuclear)… well that is not on Ukraine. Driven by supply issues, the spike in oil prices happened well before the Ukraine invasion. Did the Russian invasion make a bad situation worse? Of course. But that is now spilt milk.
The real story of Ukraine: The West is now at war with Russia and China. The authoritarian model, lead by China/Russia (Saudi Arabia?), versus the liberal democracy model, led by US/Europe/Japan/Canada/Australia/South Korea etc. China/Russia, when they signed their pact in Feb, made their aims clear for all to see. Weeks later Ukraine happened. We are not even a year in to something that is going to run for decades… China has staying power. But the West is slowly catching on. Our world has fundamentally changed. I am not sure where Saudi Arabia sits… but the very public decision to materially cut production right before US mid-terms was certainly interesting.
There is no going back. Thats because the last 20 years was largely a fiction. It never really existed (except in peoples imaginations). The Disney version of communist China was brilliantly marketed by Chinese leaders and gobbled up by a naive West. Of course, the reality of communist China, is much, much different - and much worse. Just ask anyone trying desperately to get out of Hong Hong right now. Xi has revealed himself over the past year for all to see. China is diametrically opposed to the West (that communism vs capitalism thing… not hard to understand). The West got completely played by China the past 20 years. Smart bastards.
But is looks to me like Xi/China might have miscalculated. Their partner, Russia, has completely messed up in Ukraine. And the final outcome is unclear. China still needs the West… this was recently highlighted by the chips act (good luck developing your economy without access to high end semiconductors). The game has just started - the initial moved have just been made. Settle in, it is likely going to take decades before a winner is declared. Your grandchildren will probably be the ones who decide the final outcome.
I am not sure that I agree on a couple of points:
a) Why do you think China is an ally of Russia? Perhaps Xi thought that this war was unlikely to strengthen Russia, and perhaps drastically weaken it, which is in China's interest. What have they done to help Russia, besides buy oil/gas on the cheap, and now Russia has to sell gas to China at a huge discount to LNG prices
b) Why are you surprised by Saudi behavior. If I call you a murder, will you do a favor for me? Biden called Prince Salman a murder, and then expects the guy to bend over backwards to help him. Really?
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28 minutes ago, no_free_lunch said:
To the claim of Ukraine supporting anti jewish, anti polish sentiments, the proof against is looking at reality. The president of Ukraine is.. Jewish. Poland is one of Ukraine's greatest allies at the present time. Many Ukrainian refugees go there and there is weapon transfer from Poland to Ukraine.
Just one example of what is happening on the ground. This stuff will only accelerate.
https://www.washingtonpost.com/politics/2022/06/14/ukraine-kidnaped-children-russia/
Xerxes, they will fight because of the above. Yes, the future may be even more bleak and yes maybe death for all but better to die fighting I suppose.
I get it, you think Bandera and company are wonderful, and murder of hundreds of thousands of Poles and Jews is fine. I asked you several times point blank if you think Bandera should be a national hero of Ukraine, you never answered. Your silence is answer enough.
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22 minutes ago, UK said:
Why do you think it is not in the interest of US or west to support Ukraine? Given ukrainian will and at this time proven ability to fight isnnt it a very good opportunity (not with you own soldiers) to push back, weaken and contain if not change Russia even more? Also, I am not sure about any obligations to Ukraine, but I thought there were some security guarantees for them after they agreed to give uo nuclear weapons? Also, if this pushback will succed (sofar it seems it could?), donnt you think it would show something to China too? I actually believe that US and west almost cannot aford not to support Ukraine and it would be a huge failure not to do this, unlees you want allow Russian regime to do as they want in Europe and China in Taiwan/south asia. I am not debating who is right or wrong, moral or not, but just from this longer term or great power strugle perspective, why would US not see this as an very good opportunity? And I agree that ending all this asap would be great, but how do can you end a war, when part of your territories are still occupied by an enemy? Maybe sollution at this stage, if you want everything to end asap, is more support (more Himars, tanks etc to Ukraine), not less? What good it will do if you stop everything for a one ore two years and provide opportunity for russian forces to regain strenght?
So I am not suggesting that Ukraine gives up the territory that Russia seized in 2022, reading Putin's speeches, it seems to me that he is looking for a way out, so perhaps (and I have no special insight), an agreement that Ukraine does not enter NATO would allow Putin to claim victory, and for Russian troops to depart. (I doubt Ukraine will be able to get territories seized prior to 2022 until Putin passes and a normal successor comes and a genuine referendum is done there. I would be shocked however if Crimea was ever returned. It was part of Russian Empire for centuries and was transferred from Russian Federation to Ukraine in 1954 by Khruschev (ethnic Ukrainian) as a gift to commemorate 300 year anniversary of Russia+Ukraine union. )
I think that the biggest threat to the US/Western Europe is China, followed by Iran and Islamic terrorism. My guess is that Iran will no longer be a threat in say 5 or 10 years since I assume that its clerical regime will be gone. Persia was a very accomplished civilization centuries before Christ.
Since I believe that China is the biggest threat to the US/Western Europe, I would like to see a strong Russia as a counterweight to China (remember Nixon went to China to use China as a counterweight to USSR.) Weak Russia that is dependent on China and Iran is not in our interests. Nuclear & strategic missile technology in the hands of Iranian clerics is not a good thing in my opinion.
If I am not mistaken, you are referring to the security guarantees given by countries including China to Ukraine when it gave up nukes. I do not remember the agreement well, but are Germany/Poland/Italy on the hook as well?
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1 hour ago, no_free_lunch said:
If we are going to talk USSR, here is what they did back in the 30s:
https://en.wikipedia.org/wiki/Holodomor
Here is how well they treated the poles. Remember that the USSR initially sided with Nazi germany, only switching sides when attacked.
https://en.wikipedia.org/wiki/Invasion_of_Poland
Annihilation of Polish officers after the war.
https://en.wikipedia.org/wiki/Katyn_massacre
That's all the history. If you think genocide are too strong of terms, this is what they are up against.
I know history, none of this is new to me. Russia is not USSR, Communism and Nazism are two sides of the same coin.
I am sorry, but what's your point?
Does any of this justify what Bandera and his men did? Ukraine clearly considers genocide admirable when victims are Poles and Jews, so why are they surprised if Russians adopt a tactic that Ukraine considers praiseworthy? You do not say a word about these men, do you consider them heroes?
My point is three fold:
a) I would not call this genocide - yes, killing one civilian is a tragedy, and probably hundreds of Ukrainian civilians have died, but to call this a genocide would be a stretch. This is not a plan to wipeout Ukrainian people, who sadly are doing it successfully themselves (look at Ukrainian demographics - if I am not mistaken, the number of 5 year olds was down 25% in 2020 vs 1989 in Ukraine).
I am thankfully not aware of Dresden/Tokyo fire raid type bombardment of Lviv for instance. If Putin's plan was to commit genocide, surely we would have gotten this type of attack by now, no?
b) People that think that Stepan Bandera and Roman-Taras Yosypovych Shukhevych deserve statues rather than infamy along the lines of Hitler forfeit a right to complain about genocide.
c) People everywhere usually act in their own self interest. When individuals act in a righteous manner, that's a cause for celebration, when nations act this way, it is incredible. Nobody owns Ukraine anything, and it is NOT in the interest of the US or Europe to support Ukraine. This support will go away at some point, the question is how quickly? It is in the interest of Ukraine to settle things with Russia before the West pulls support.
I wish that the war would end as soon as possible. I think that it is in the interest of both Ukraine and Russia, as well as US and Europe that it ends asap. The only ones who gain are the Chinese, the Indians, and the Iranian regime.
I am very sorry for the Ukrainians.
{I have three grandparents from Ukraine, my wife is from Kiev, my best friend is from Kiev (and his grandmother is still there), I still have an aunt and cousin in Ukraine. My wife and donated significant amount of money to Ukrainian refugees, and so did my parents and in-laws. }
I will not debate your further. You are acting very emotionally, and I have no desire to stress you out further.
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4 hours ago, no_free_lunch said:
So let's break this down, it's now widely considered that what happened in North America to the aboriginals was some type of genocide. So my opinion, by making that link to Ukraine you are suggesting that there is a similar type of genocide there and that we should ignore it.
This is the thing Dinar, maybe not you specifically but in my opinion people ARE aware of genocide (as the term is now used, not trying to link to something like the holocaust) and they are saying we should ignore it.
You asked why. So here is a view that many Russians express and frankly, I cannot argue with the logic, although I find it morally wrong.
Stepan Bandera is a national hero of Ukraine, with numerous statues in cities like Lviv, and many streets named after him. This national hero and his men murdered hundreds of thousands of Polish and Jewish civilians in the 20th century. So clearly Ukrainian people consider genocide something admirable, so why do you get worked up if it happens to them? They clearly think it is wonderful! But for a people who consider mass murder to be admirable when they do it to Jews or Poles but a tragedy when it happens to them, well, I am sorry, but this is a pot calling the kettle black or karma.
Again, this is not my personal view, and I do not hold grandchildren responsible for the sins of their grandfathers, but I would like grandchildren to acknowledge that mass murder is wrong, even if it is done by their grandfathers.
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4 hours ago, no_free_lunch said:
I call it like I see it. These accounts continue to take the side of Russia in an invasion that involves: rape , murder, torture and with the underlying motive of genocide of Ukraine as a cultural unit. It's subtle but that's what I see. "Oh I am not backing Russia, I am just saying..." Yeah right.
You keep throwing words like genocide, annihilation, etc... You accused me of being a proponent of slaughter of Ukrainians, when all I said was the war needs to stop asap. If you provide your name rather than hide behind a screen name, I will sue you for defamation, although an apology will suffice. I have nothing against Ukrainians, three of my four grandparents were born there, my wife was born in Kiev, and we have donated to substantial funds to help Ukrainian refugees. Is it really in Ukraine's interest for the war to last? More deaths, crippled people and destruction. As for genocide, I would suggest that Ukrainians cannot throw stones. Remember Stepan Bandera and UPA? Care to recall how many Poles and Jews he and his henchmen murdered? A national hero of Ukraine.
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48 minutes ago, no_free_lunch said:
Why would I be civil to those backing genocide?
Exactly when did Xerxes backed genocide?
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28 minutes ago, no_free_lunch said:
Rumors that it's going down in Kherson. Even the pro Russia accounts I follow are really struggling with this. This is big. This is the first major city to be liberated and is very demoralizing for Russia. Pro Russia accounts now focusing on some indeterminate future whrn conscripts kick in, full war is declared and the tides shifts back to them, what a joke. They are saying that actually Ukraine army is one of the strongest in the world, lol, not true but yes they seem willing to dievto avoid genocide if the people. Meanwhile hard to justify your Russiam kids dying when you aren't even succeeding in the mission.
Ukraine side is saying this will put roads to crimea in range of himars. Perhaps they can slowly strangulate the Russians from this new position.
I appreciate your perspective shhughes. I hope they can keep the momentum up.
Xerxes you don't have anything intelligent to say here so stop barking like a poodle.
I disagree with you, I find Xerxes commentary to be generally on point and quite interesting. Let's keep it civil, please.
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10 minutes ago, thepupil said:
today, i purchased a decent sized position in ESS in one go, using some BBB bonds and ALX as funding. Off 35% from pre-covid and 40% from post covid peak and at about the same price as early 2015, ESS has endured a nice drawdown and is trading at a high 5's cap rate. I get EV/Unit of about $360K with low ~$105-$110K/unit of debt all of which is well termed out and at relatively low cost. About 14x 2023E FFO / 4% divvy yield.
ESS owns 57,000 (at share, 52K wholly owned then 50% of 10K) mostly suburban California and Washington apartments in LA/SF/Seattle metro areas. They command rents on average of $2500 / month and they own many buildings in ritzy areas where its more like $3.5-$5.0K. This is the cheapest way to buy California housing. No one is able to buy or build at cheaper price than on the stock market through ESS. Further, to assemble this portfolio and at its basis and margin (given the whole prop tax thing in cali) would be impossible.
NEar term fundamentals will probably suck. tech layoffs, recession, California exodus. headlines will rage. but it's hard to build, it's the world's fifth largest economy, GDP/Capita in the areas where ESS owns RE is very high. ESS is an advantaged and well capitalized owner should distress arise.
I started the year with big NEN and FRPH positions. I've trimmed those by 50% and 25%, respectively. FRPH is up 3% YTD, NEN up 15% YTD. ESS is down 38%. Each of these securities primarily own coastal apartments in DC, Boston, and Cali. that's a big swing and in my view should be taken advantage of.
Thank you, why not EQR or ELS or AVB? Thank you.
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29 minutes ago, Ross812 said:
I wouldn't view the political risk as any more extreme than the risk to O&G, technology (privacy), or healthcare. Utility political risk is local on the state or even city level as well so diversification is important. The adoption of EVs is going to drive increased electricity demand similar to the widespread adoption of the AC and the IRA solidified 10-yr tax credits for green infrastructure spending by utilities. At least in my home state, increased input costs and initiatives to improve safety and reliability are an easy lift for a rate increase.
In my view, the primary concern with utilities is the debt load. ROE gets cut as debt payments go up and debt is rolled.
We will have to agree to disagree. I do not see consumers protesting about Google or Microsoft to politicians - consumers get the service either for free or do not see/feel the hidden costs. When annual cost of electric and gas reaches $3-$4k per annum per household, not counting heating, in NYC, there will be consequences. Healthcare I would agree with you, oil & gas unclear at least to me.
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1 hour ago, Ross812 said:
@changegonnacome I agree the fed is going to keep at it. What is the right course of action then? You can invest in toll type companies - online market places, payment processors, maybe, financials, but you are going to get killed if the coming recession results in a lot of unemployment.
I actually like utilities if inflation doesn't bounce around too much (ie the Fed remains committed and we dont have a 70s scenario). Utilities have a lot of tail winds with the green initiatives coming out. I think long term the utilities are going to replace a lot of the o&g.
Staples? Healthcare? Wait it out in t-t-bills?
What worries me is we start to see a wage spiral in 2023. The FFR will need to stay elevated and the yield curve starts to normalize (1% spread on the 10yr, 2% on the 20 yr over the FFR). Risk assets are going to get smoked.
I think that you are missing political risk in utilities. Unless I have made a mistake, utility rates in NY for instance have doubled in the last decade or so. There is a limit to how much pricing utilities can get before consumers=voters say no more, and then ROE gets cut.
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29 minutes ago, Ross812 said:
@TwoCitiesCapital, fair point on the Atlanta Fed.
Below is the historic spread between the 10-yr and the 30-yr mortgage (borrowed from Wabuffo's twitter). I think it tells an interesting story about the uncertainty the banks have about the direction of long term rates.
The longer term average spread is about 170 bps and is nearly 300 bps right now.
To me, this implies the risk departments at the banks are projecting a future the 10-yr around 5.8% (170 bps off the prime mortgage rate). The 10-yr is at 4.16 today which is 33 bps over the FFR. I'd say the risk departments at the banks are much more informed than any of us so they are thinking a FFR of maybe 5.5% in today's messed up economy?
What are the implications of a FFR of 5.5%, 5.8% 10-yr, and a 6% 20-yr? That's an implied hurdle on the SP500 of 7.3% with a risk premium of 1.5% over the 10 yr. A DCF of the SP500 at 8.9% growth with today's earnings and a that discount rate gets us to the SP500 at 3670. Does that mean we are fairly valued now?
No, you are not thinking about it correctly. Think about a 30 year mortgage as two things: a regular amortizing 30 year mortgage that you cannot pre-pay and an option to refinance at any moment. Given the recent extraordinary volatility in interest rates, the value of the option has skyrocketed. Hence, the spread widened drastically.
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24 minutes ago, dealraker said:
So as to those in the business of predicting anything as to oil and gas...
....there was this legendary dude named T Boone Pickens who most considered God of oil gas cycles and such. Uh yeah, I remember well is immense following.
Dude started a fund...with huge fanfare. Lost 98 percent of his investors money..fast, real fast.
An option to expertise investing as to oil and gas is simply to allocate when it's market cap is exceptionally low to total market cap. And do not do the "value investor" brain dead mistake of selling too soon. You simply can't make up in new bargain ideas what you lose from selling too soon.
Mesa Petroleum did not do so well either if I remember correctly
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1 hour ago, dealraker said:
In about 1994 Outstanding Investor Digest did an interview with a guy who recommended buying shares of Cathay Bancorp, a California bank that served mostly the Asian-American (mostly Chinese-American) population. Southern Cal at that time had massive fires, huge earthquakes, its own awful recession, riots in the streets. and of course OJ Simpson was in the news. The banks in Cal were getting slaughtered both in operations and stock prices.
Still Cathay had a 20% return on equity and was selling for...(this people is simply incredible)...book value. All while...
...on the east coast Mr. Eddie Crutchfield, we used the term Klutzfield, the cigarette smoking CEO of First Union was out in public stating that he could "using the accounting that we employ we can pay 5 times book value for a community bank and make it work". Yes, Fast Eddie could pay, and did pay, 4-5 times book value for community banks earning 10% on equity and make it accreditive to earnings via the great flush of equity and past/present/AND FUTURE expenses right out the old drain!
First Union had an interesting game back then and it displayed itself pefectly clear in its financial statments. Remember Buffett says, "A librarian can read the numbers, but it isn't the figures that count, it is what they mean." So Fast Ed had a near 30 percent return on equity because everything was flushed in one-time charges that analysts uniformly stated "did not count" and years-years-and years of (YOU GUESSED IT!) zero book value growth. Red flags? To me a screaming YES; to bank analysts? No problem.
So local banks including the dominant one in my town (that I inherited stock in decades earlier) were getting 10-12% on equity and selling for (OH MY LORD!!!) 4 times book value! Yep that's the truth and nuthin' but the truth.
Hmm....anybody picking up on the game Eddie played?
So my local dominant bank that sold for 4 times book at $25 per share eventually settled for something in the $7 range as Cathay and others in the Asian American California world got things going once fires/quakes/riots/recessions/and OJ cooled down and soared. Then came the financial crisis of course. I said to myself, "The two years before he joined Buffett at Berkshire Munger had 30-something percent declines in his mostly financial stock portfolio." Yep, my faith was in shake-down mode...while I said to myself, "Hell, I'm Charlie." Charlie is my first name.
We survived. I've owned both Cathay and East West since their origin on the exchanges. But I have not bought a bank stock since East West came public in the year 2000. Again, for you stats people, East West came public, no economy issues at this time around Y2K, at book value earnings 20% on equity. THAT my friends is near guaranteed success.
But to cut to the HOPE of the matter, a few days ago me and several members of my family who have invested in these southern Cal based Asian American institutions all bought shares of Hope Bancorp, symbol HOPE. We bought because a family member (we are a partially Asian American family from souther Cal) works as a bank analyst in that area and a large shareholder was wanting to bail at basically any price. So we paid about $12.75 for some shares, it wasn't a small outlay for us.
Hope serves mostly a different Asian American population than does Cathay and East West (they also serve mostly different populations too). And Hope doesn't have the very successful history of Cathay and East West. Still these banks are treated with incredible respect by their managements and community. It is far different than in Asia itself, and different than in the US too actually, it is a special culture. Failure is not an option in their eyes.
Hope, the stock, has moved up a tad. But it is still about 7.5 times earnings. I look for both loan growth and growing but relatively low loan losses for a few years going forward now.
I post this just for stimulation, to give something different to think about. We can't Facebook/Google 24/7 or at least I can't. Banks are as ignored as I've ever seen them today compared to other stuff.
These banks are treated with the upmost respect by management
Thank you for the idea, do you by chance know who sold and why? Also, are you not worried by 1) very high percentage of criticized loans? 2) impact of sharp increase in interest rates on the value of their loan book and net interest margin?
China
in General Discussion
Posted
Sure. The problem is that commuting costs so much time and money (in NYC suburbs as much as $5k per person per year and up to 1000 (one thousand) hours per year) that there is a real question whether it is worth it despite loss of interactions and creativity.