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Bank of America / Fairholme Conference Call


Parsad
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Here is the link to the Bank of America conference call that Bruce Berkowitz and Fairholme held yesterday.  You just have to register to receive the stream.

 

https://us.reg.meeting-stream.com/fairholmecapitalmanagementllc_081011/

 

Contrary to what the media said, for anyone investing in banks, you really should hear the call.  Some great details on the current environment for banks.  I wasn't able to listen to it yesterday due to the website being down.

 

Also, while I was impressed with Moynihan in previous interviews, I'm equally impressed with the team behind him.  These guys are smart and they know their bank.  Are there risks?  Yup, but these guys seem as capable as anyone else I've ever listened to in the banking industry.  If they succeed, Ericopoly is never going to have to work again!  ;D  Cheers!

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They have exposure, but they feel it is manageable.  That's a risk that most major banks with international units have exposure to.  About the only large scale U.S. bank that has no such exposure is Wells.  And then you counter that risk with the progress they are making in their loan business, both residential mortgage and consumer loans, and their global investment business.  As well as the lines of business they have moved out of. 

 

I really see alot of similiarities to Fairfax when they were struggling, and I was very impressed by their team on that conference call.  It's not going to be easy, as Moynihan alluded to when it came down to the question of if BAC will be able to achieve a 1% ROA long-term.  There are significant headwinds, but they certainly seemed to be up to the challenge.  Also the fact that all of the executives on the call had alot of their personal net worth at risk in the company stock was terrific to hear.  I certainly wouldn't recommend that anyone bet the farm on BAC (Eric!), but we've done our analysis and we have a comfortable size position through the warrants.  Cheers! 

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I think Moyinhan sounds like he is confident that BAC will turn around. But as a shareholder, this news kind of bothers me.

http://online.wsj.com/article/SB10001424053111904823804576502680497287052.html?mod=asia_home

 

 

What looks worrisome? At face value, Moynihan requested the meeting to argue for regulatory pressure to resolve the lawsuits favorably.

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I certainly wouldn't recommend that anyone bet the farm on BAC (Eric!), but we've done our analysis and we have a comfortable size position through the warrants.  Cheers! 

 

I've got 27% in the BAC warrants now, but the rise in price will keep me from buying more (psychology).  On Wednesday I was adding more, getting some of it below $2.70 which just seems really attractive for a very long term call warrant.  Then early on Thursday I went off for a 3 night camping trip north of Mazama in the Roadtrek, out of all communications range -- that makes the market volatility a lot easier to deal with.

 

Thanks for getting the board back up.

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