PlanMaestro

There are limitations on how much he can have in banks, that is why he has 5% in BAC, C, and RF ... and probably those apply to GS and MS too. BRK is very cheap just not crazy cheap.

Those are very good companies but still reliant on their Mediterranean ops. Coming from Latin America I can tell that if some of those countries leave the Euro the asset devaluation can be huge. Now, the US or European companies exporting or with international ops look appetizing w/o the same risk. I prefer to have those local ops companies as back-up option in case of a devaluation: selling the 4xFCF ones going to 3x to buy 3x going to 1x.

Except for the putbacks and Europe

Harry, what are your audited returns? Please stop cluttering the RSS feed

Mr Market has his whims. You are a smart guy Ericopoly. Are you sure your goal is just to retire?

That would be a great idea hyten. One small comment, with economic indicators you have to know what you are looking for. You need an hypothesis and a point of view and from there the most useful indicators become obvious. If not, you are going to get swamped by the the sheer number of them.

Some people would argue that we are in a treasuries bubble (compared for example with corporate bonds and dividend yields). How would you know one way or the other?

Personally, my main concern is if we are turning Japanese. Housing, Banking and Consumer Debt in my opinion are the key issues that are stopping the economy from recovering to trend. Banks: Texas ratio and 30-89 delinquencies http://variantperceptions.wordpress.com/2011/08/29/charting-banking-xxii-three-years-after-lehman/ Consumer: Total debt and debt service http://www.barelkarsan.com/2010/09/context-to-consumer-debt.html Housing: absorption http://www.usatoday.com/money/economy/housing/2010-03-01-buffett01_ST_N.htm Europe might be a second concern, but I think it is more critical if you are investing there.

+1, and I do not think people realize how the composition of the S&P 500 has evolved since the 70s (oil crisis) to business with better margins, ROI, and global growth prospects. Invest bottom up, lots of opportunities in this market.

Having made good money once, so like twacowfca no bear either, some crazy people in Congress are battling hard against them. There were plans to decrease the 10% rate of the senior prefs and they were clipped.

And it looks like he is getting a taste of his own medicine. From the comments section, some people are driving him nuts with nonsense.

Do we know how big is his position? I am a concentrated investor but I understand why a small fund without a long lock-up period would like some diversification and limits ... and he was buying as it went down. "if you really think that the dilution matters - that is if you really think the shares are cheap then there is a solution: buy more" I find more interesting his comments on the Deal itself.

Very good article on the Buffett investment from the man who must not be named. Posted here so that Sanjeev does not have to go to his site. Very much along the lines we were discussing. Check the comments, I think is showing more emotions on aka-Munger type of comments that we have shown here. http://brontecapital.blogspot.com/2011/08/bank-of-america-some-comment-on-buffett.html

Bingo. +2

Well, I read all the news and my humor was not very good this morning considering that I am still waiting for that cash of the special situation so I do not have a position. Now I am very happy that the people and the market are not seeing all the positives of this deal for BAC. Besides knowing that I know what Warren knows.

+1 That is a very good point Sanjeev. Moynihan has been under a lot of pressure despite the very good work he is doing (dividend debacle). And anyone that knows BAC's history knows that Charlotte's insiders are powerful and dangerous ... and not only because of BAC. This is a window of opportunity, in a key US institution, that is working.

+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.

AIG, but he would not control the float and does he really want more financials? When he hired the new PM he said no more banks ... I wonder what changed his mind ;)

And he also helps to improve a tiny bit the capital ratios. Anyone really thinks that $5B ($10B w/warrants) was a rescue? Not me.

Amazing, a slam dunk if there was one. Nice strike price for the warrants for Buffet and not much dilution for BAC. Looks more like a vote of confidence

Munger, banking is one of the most regulated industries in existence and they disclose more information than any other. I have not seen you using numbers as 30-89, NPLs, NPAs, TDRs, restructured loans. And they are provided by type of loan in painful detail. That information is what me and others have been using to discard nonsense. For example, I personally posted in VariantPerceptions about how this "CRE is the next shoe to drop" was nonsense. So no, you do not have to know each single loan to know how good was their u/w, especially 4y into a recession. BAC has 6 lines of businesses and 5 of them are profitable. The only one with negative earnings (but positive FCF) is Home Loans. Mortgages have a half life of 4 years ... is it really that difficult to do a little arithmetic and estimate a range of when BAC will become earnings profitable (they are already FCF positive)?

Guilty but ... who? I have not seen a credible short thesis and been trying to find one. There is a lot innuendo moving from one thing to the next w/o being convincing in the previous one (CRE, Option ARMs, Europe, putbacks, ...). If there is one, I would love to read it.

Munger, there is no contradiction there. Sanjeev's number is pre-provisions (non-cash), includes excess D&A over capex (non-cash), and is before interests (that BAC is not paying). Yes, BAC is cash flow positive today.

Paraphrasing Blodget: A 2 trillion asset base and I just took a 10% and 20% here and there. Just like his Internet stocks analysis: It is a $2 trillion market and we will take just a 10% and 20% here and there. Great analysis.

Yes he is, just check his twitter account and how he is playing it out Munger-like. Utterly irresponsible. Just say: I made a mistake, sorry.