arbitragr

Hey is that "Ericopoly" from last time? The one that left a while back? Welcome back if so! How did you get about to coming back? Anyways, back on topic. My feeling is that as long as the government feels free to print a bucket load of money, the gold price isn't going to substantially fall. Maybe if the economy recovers and Helicopter Ben raises rates, but not in the short term.

Is this the same Eric that left a while back ago?

C'mon boys ... respect and ... the golden rule. "Do unto others as you would have them do unto you." I think this site costs Sanjeev not just money, but some time & labor as well. Let's work together rather than against each other. Last time anything like this happened Eric (if I remember his name correctly) left.

Just on bonds ... I posted this a while back ago in March, "The Case for Junk Bonds":

I did mine just now. ;)

Well, I did buy BRK/B. :-\

Price is what you pay, value is what you get. Just hang on, we might see some more bargains. If not then, it's not the end of the world. I'm pretty sure I've said that, I've never been short WFC or anything else for that matter in the current time period. Just patient and cautious. i.e. Rule #1 never lose money.

Hahah ... I like your humor Ben, even though it's misguided. Who says I bought any WFC? I still don't own any WFC, and I didn't say that anywhere in that last post that I "bought" any WFC ever during that time up to now. But I will admit that when it was at 10-14 or so it was probably over sold. I just said it was a fat pitch at those levels, not that I own any - but that was during the Feb-March period, not April. My quote about WFC integrity and all occured when the stock was trading at the 15-25 levels, where the risk of purchasing was susceptibly elevated: http://i163.photobucket.com/albums/t314/ripleyx/wfcapril2009.jpg When it was trading at 10-14 that was Feb/March ... in Q109. That, was when it was a fat pitch. Not April and onwards. Anyways why would I need to buy anymore WFC when I own it indirectly through BRK/B?? Nonetheless I did post this a while back ago: http://cornerofberkshireandfairfax.ca/forum/index.php?topic=161.0 I hope this post puts a little context, to the the previous post of yours that was supposed to put the previous post of mine in context. If that makes sense at all. Thanks Ben ... for keeping me honest but. :P You're keeping tabs on me, good to see you're observant. I like .... ;) Cheers.

Biggest fat pitches this year have been BRKB at the 2000 range, and WFC at 10-14 range. I don't think we're going back there again, however.

Patience and discipline. There's nothing wrong with sitting on a pile of preserved wealth. Especially if you're already wealthy.

I should be there next year. Maybe we'll meet. :)

Markets shouldn't have rallied like that in the first place. No fundamental justification, the business models of the banks (option-ARMs, MBS, no documentation lending, securitization) have been completely destroyed, we aint going to see 04-07 type growth for at least 5 years or so.

well you didn't think that rally would last forever did you? I've been eyeing many high quality names, however they've run up so much ... with no real fundamental improvement in earnings power at all. Thankfully they're coming down to more sane levels now. Some of these banks are trading at like 20-30x earnings!! Where the business models have been completely destroyed at that.

need to login ... can't access ???

Sanjeev has two jobs. The other is = IT support for CoB&F.

amazing how apple is back in fashion these days ... i remember back in 2000 when they still had clunky macintosh's

Okay so this week's chart is one about housing. I've been looking deeper into the housing market to get a view on whether it's time to invest in financials or not, and whether things are bottoming out. I've been assessing other things, and data on the housing situation has been eluding me in the meantime. Here's the chart: http://i163.photobucket.com/albums/t314/ripleyx/Finance/newhomesalesmarch-057x057.jpg So I guess I'm starting to change my mind. You can see right at the end there that there are some signs of a pop in March/April 2009, same thing goes with the months supply of existing homes on the market chart. I'll take a detailed look into WFC and JPM and all the others a bit more closely over the next week or so. Hopefully they don't run up too much. How long things will take to recover is anyone's guess.

results were worse than expected ... primarily worse than expected credit card losses ... with unemployment numbers increasing more than anticipated again shows the WFC preliminary earnings release was full of it ... results show that things are not as rosy as they seem. dead cat bounce bank rally. A sign of things to come ... http://www.reuters.com/article/marketsNews/idUSN2126051420090422

Looking back, with 20/20 hindsight ... and with the perspective of say ... FFH's shorts on the sub-prime sector ... Monish's bet on Delta Financial was a clear mistake.

Their tier 1 ratios were highest among the big banks prior to the crunch.

Well I'll give credit to Dimon for building a fortress balance sheet before the crunch happened. Much like Prem did with CDS's in the sub prime/housing sector

As I've opinionated on the WFC thread ... the past week or so = dead cat bounce. I might be wrong but I still think the US consumer is THE leading indicator. They are 20-25% of global gdp. They say the markets lead the economy. But they certainly didn't lead sub prime. Let's see how housing, US earnings reports and unemployment unfold over the rest of the year. My view is we're just starting to stabilize, yet how long we'll take to get a sustained recovery is anyone's guess. Nothing is going to happen unless unemployment and the consumer gets going. Without that, housing, and hence bank losses will never stabilize. Bank of America fell $2.58 to $8.02 even after saying first-quarter net income more than tripled on gains from home refinancing and trading. Reserves for future loan losses increased 57 percent to $13.4 billion since the end of December. Charge-offs for uncollectible loans more than doubled to $6.94 billion from the same period a year earlier. With their loan losses it just shows that the WFC preliminary earnings release was BS. We have problems with the consumer side of the equation. This is what sh%ts me about the management financial companies ... BS. History has shown that it's less costly to be late to the game, than too early. The question is do you believe this is your normal run of the mill recession? If so, then we'll have a recovery and another boom in the next few months and on we go ... merrily on our way just like our other booms after their respective bubbles. In my view, with the current downturn having only the Depression as a reference point, this recession will take a lot longer than expected to work out.

I'm not short. I'm waiting for the right data to pop up. I watch the housing market closely. I just don't think we're out of the woods yet. A bull market run isn't going to happen overnight. Bull markets take years to run out. Quite the opposite in fact. I invested in financials in late 2008, WFC included ... got burned b/c of management's bullsh*#t. WFC dropped from 27 to 13 or something. Sold my stake. Regardless, I am indirectly invested in WFC via BRK-B. When WFC's management comes out and says "everything is rosy" and you have someone like Jamie Dimon coming out and being cautious and not expecting any major improvement until the latter end of 2009, you know something sounds fishy.

Goldman raising equity to pay back TARP as we speak. As I've said, if GS needs to raise capital, then surely WFC has some stress in their loan portfolio, given that they have a high concentration of their loans in the California, Florida markets.

I too remember that discussion vividly, as I was one of those who were bearish on WaMu. I think it was ... Mr Cigarbutt?? If I remember correctly who was a total bull on it ... and I just offered a second opinion and I got attacked. I couldn't believe how many people were hostile towards me for telling everyone not to invest in it. If Sanjeev can dig up the old threads some how and find the arguments in that, the reasoning there is pretty much the same here ...