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Well, I Certainly Eat My Own Cooking!


Parsad
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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

But you are saying it is a 3 bagger? FFH at 80 has been a 5 bagger and Steak'n Shake even better even faster!

I have a lot in BAC too  :)

 

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

Forgive me in advance if I either don't remember or you don't comment on specifics, but, are you doing LEAPS, warrants, or equity? There are so many ways to be long that company, that I am interested in what individuals are doing.

 

BTW, I may kick myself in a bit, but, I still don't feel like I am smart enough to understand banks enough to invest in any of the big ones.

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

One more well-respected value manager jumping in. :)

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Sanjeev,

 

What's the reason for this thread out of curiosity? Just commenting in general or did you just boost your position in a major way?

 

Yup!  They are further along than I expected at this point after reading the 2nd Q report.  But the stock is doing laps like it's still going to go under, and the market perceives it as the worst capitalized out of all major and regional banks. 

 

If Bank of America goes down from some cataclysmic event  in the world, then Wells Fargo & JP Morgan won't be far behind...probably days at best...and I doubt if Citigroup would last as long as BAC.  The markets are counting the broken branches on the tree, but not examining exactly how strong the trunk is and all of the other branches where leaves will still sprout.  Cheers! 

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

Sanjeev,

 

What's the reason for this thread out of curiosity? Just commenting in general or did you just boost your position in a major way?

 

Yup!  They are further along than I expected at this point after reading the 2nd Q report.  But the stock is doing laps like it's still going to go under, and the market perceives it as the worst capitalized out of all major and regional banks. 

 

If Bank of America goes down from some cataclysmic event  in the world, then Wells Fargo & JP Morgan won't be far behind...probably days at best...and I doubt if Citigroup would last as long as BAC.  The markets are counting the broken branches on the tree, but not examining exactly how strong the trunk is and all of the other branches where leaves will still sprout.  Cheers!

 

Except, that as I started to put money into BofA, I thought it would be the only circle of my competence currently under financials. But my knowlege of the AIG situation also grew over the last months and made me very comfortable to put the same amount into AIG,... so currently I have for every $1 of BAC, also about $1 of AIG. Somehow Buffett's IBM share repurchase thesis gave me my "eureka effect" about AIG. The AIG position is mostly in common stock and a few warrants.

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Sanjeev,

 

What's the reason for this thread out of curiosity? Just commenting in general or did you just boost your position in a major way?

 

Yup!  They are further along than I expected at this point after reading the 2nd Q report.  But the stock is doing laps like it's still going to go under, and the market perceives it as the worst capitalized out of all major and regional banks. 

 

If Bank of America goes down from some cataclysmic event  in the world, then Wells Fargo & JP Morgan won't be far behind...probably days at best...and I doubt if Citigroup would last as long as BAC.  The markets are counting the broken branches on the tree, but not examining exactly how strong the trunk is and all of the other branches where leaves will still sprout.  Cheers!

 

Interesting, thanks!

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Guest valueInv

We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

Why 3-5 years if you expect it to hit book value by the end of the year?

 

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

Why 3-5 years if you expect it to hit book value by the end of the year?

 

Never said book by year-end.  Said tangible book by year-end.  Cheers!

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

Sanjeev,

 

What's the reason for this thread out of curiosity? Just commenting in general or did you just boost your position in a major way?

 

Yup!  They are further along than I expected at this point after reading the 2nd Q report.  But the stock is doing laps like it's still going to go under, and the market perceives it as the worst capitalized out of all major and regional banks. 

 

If Bank of America goes down from some cataclysmic event  in the world, then Wells Fargo & JP Morgan won't be far behind...probably days at best...and I doubt if Citigroup would last as long as BAC.  The markets are counting the broken branches on the tree, but not examining exactly how strong the trunk is and all of the other branches where leaves will still sprout.  Cheers!

 

Except, that as I started to put money into BofA, I thought it would be the only circle of my competence currently under financials. But my knowlege of the AIG situation also grew over the last months and made me very comfortable to put the same amount into AIG,... so currently I have for every $1 of BAC, also about $1 of AIG. Somehow Buffett's IBM share repurchase thesis gave me my "eureka effect" about AIG. The AIG position is mostly in common stock and a few warrants.

 

Sanjeev, how do you think BAC stacks up against AIG? Anyone else cares to comment?

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

Sanjeev,

 

What's the reason for this thread out of curiosity? Just commenting in general or did you just boost your position in a major way?

 

Yup!  They are further along than I expected at this point after reading the 2nd Q report.  But the stock is doing laps like it's still going to go under, and the market perceives it as the worst capitalized out of all major and regional banks. 

 

If Bank of America goes down from some cataclysmic event  in the world, then Wells Fargo & JP Morgan won't be far behind...probably days at best...and I doubt if Citigroup would last as long as BAC.  The markets are counting the broken branches on the tree, but not examining exactly how strong the trunk is and all of the other branches where leaves will still sprout.  Cheers!

 

Except, that as I started to put money into BofA, I thought it would be the only circle of my competence currently under financials. But my knowlege of the AIG situation also grew over the last months and made me very comfortable to put the same amount into AIG,... so currently I have for every $1 of BAC, also about $1 of AIG. Somehow Buffett's IBM share repurchase thesis gave me my "eureka effect" about AIG. The AIG position is mostly in common stock and a few warrants.

 

Sanjeev, how do you think BAC stacks up against AIG? Anyone else cares to comment?

 

I like AIG, but I think it's a bigger black box with more tentacles than BAC.  If I had to choose one, then it would be BAC.  I understand the banking business, especially a shrinking one, better than I'll ever understand some of the more complex and esoteric products at AIG.  Cheers!

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I'm greedy - I like the BB in the short run for AIG and I think the banks are going to underwhelm in 2013/2014 as the credit cycle turns (inevitably)...

 

Sanjeev - I'm surprised at your doubling down given your view of Europe's inability to deal with Spain is playing out to a T and will cause some serious volatility...

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Sanjeev, how do you think BAC stacks up against AIG? Anyone else cares to comment?

 

BAC is cheaper but turning around while AIG already did. That AIG has more tentacles? Actually I would say the reverse since BAC is taking much more of my time.

 

Both in size wishing they don't recover together  .... to pile on the laggard.

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Sanjeev, how do you think BAC stacks up against AIG? Anyone else cares to comment?

 

BAC is cheaper but turning around while AIG already did. That AIG has more tentacles? Actually I would say the reverse is true since BAC is taking much more of my time.

 

Both in quantity wishing that they don't recover together to be able to pile on the laggard.

 

It might be a case of personal preference in terms of what one feels comfortable in analyzing. However, ignoring the people aspect for a moment; for me, AIG today is much easier to analyze than Fairfax was in 2003 and BAC today is more similar to Fairfax in terms of how comfortable I can get with it. Again that is mostly down to my personal preference/analytical limitations and ignoring the people aspect.

LTA

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Sanjeev, how do you think BAC stacks up against AIG? Anyone else cares to comment?

 

I feel AIG is bit ahead in turn around but I find BAC easier to understand. Story might unfold quicker with AIG and it will be ideal if both of them work out at different time.

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

With such clear conviction, why in your opinion didn't WeB invest directly in the equity? does the preferred route not suggest it's not that clear to him?

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

With such clear conviction, why in your opinion didn't WeB invest directly in the equity? does the preferred route not suggest it's not that clear to him?

 

When Buffett invested the $5B, BAC was in a much more precarious position.  Did he not recently say he wishes now that he had invested more? 

 

Buffett invests with Leucadia in things such as Berkadia, but he never invests directly in Leucadia...does that say something about how he feels about Leucadia equity, or is there just some things that Buffett chooses to invest in one way, and perhaps not another. 

 

Don't spend all your time wondering why Buffett did or not do something.  Like everyone, including you or myself, there are things he will miss and many things he will get right.  Investing is as much an art and based on your comfort level, as anything else...Buffett had much more comfort in preferreds rather than equity at the time.  I would not be the slightest bit surprised if he buys equity at some point, and let's not forget we still don't know what Munger bought for DJCO...alot of people think it was BAC common...but would that matter?!  Not one iota to me.  Cheers!

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

With such clear conviction, why in your opinion didn't WeB invest directly in the equity? does the preferred route not suggest it's not that clear to him?

 

When Buffett invested the $5B, BAC was in a much more precarious position.  Did he not recently say he wishes now that he had invested more? 

 

Buffett invests with Leucadia in things such as Berkadia, but he never invests directly in Leucadia...does that say something about how he feels about Leucadia equity, or is there just some things that Buffett chooses to invest in one way, and perhaps not another. 

 

Don't spend all your time wondering why Buffett did or not do something.  Like everyone, including you or myself, there are things he will miss and many things he will get right.  Investing is as much an art and based on your comfort level, as anything else...Buffett had much more comfort in preferreds rather than equity at the time.  I would not be the slightest bit surprised if he buys equity at some point, and let's not forget we still don't know what Munger bought for DJCO...alot of people think it was BAC common...but would that matter?!  Not one iota to me.  Cheers!

 

One can of course disregard buffet's doings, at his peril. However, his past preferreds investments were based, as you say on - not enough comfort. I do not understand banking well, too many moving parts to my taste, so I ask... why the discomfort? (and re LUK, yes, I think it says something about how he feels about Leucadia equity).

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

With such clear conviction, why in your opinion didn't WeB invest directly in the equity? does the preferred route not suggest it's not that clear to him?

 

When Buffett invested the $5B, BAC was in a much more precarious position.  Did he not recently say he wishes now that he had invested more? 

 

Buffett invests with Leucadia in things such as Berkadia, but he never invests directly in Leucadia...does that say something about how he feels about Leucadia equity, or is there just some things that Buffett chooses to invest in one way, and perhaps not another. 

 

Don't spend all your time wondering why Buffett did or not do something.  Like everyone, including you or myself, there are things he will miss and many things he will get right.  Investing is as much an art and based on your comfort level, as anything else...Buffett had much more comfort in preferreds rather than equity at the time.  I would not be the slightest bit surprised if he buys equity at some point, and let's not forget we still don't know what Munger bought for DJCO...alot of people think it was BAC common...but would that matter?!  Not one iota to me.  Cheers!

 

One can of course disregard buffet's doings, at his peril. However, his past preferreds investments were based, as you say on - not enough comfort. I do not understand banking well, too many moving parts to my taste, so I ask... why the discomfort? (and re LUK, yes, I think it says something about how he feels about Leucadia equity).

 

What u are using is a double edge sword be careful.

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

With such clear conviction, why in your opinion didn't WeB invest directly in the equity? does the preferred route not suggest it's not that clear to him?

 

When Buffett invested the $5B, BAC was in a much more precarious position.  Did he not recently say he wishes now that he had invested more? 

 

Buffett invests with Leucadia in things such as Berkadia, but he never invests directly in Leucadia...does that say something about how he feels about Leucadia equity, or is there just some things that Buffett chooses to invest in one way, and perhaps not another. 

 

Don't spend all your time wondering why Buffett did or not do something.  Like everyone, including you or myself, there are things he will miss and many things he will get right.  Investing is as much an art and based on your comfort level, as anything else...Buffett had much more comfort in preferreds rather than equity at the time.  I would not be the slightest bit surprised if he buys equity at some point, and let's not forget we still don't know what Munger bought for DJCO...alot of people think it was BAC common...but would that matter?!  Not one iota to me.  Cheers!

 

One can of course disregard buffet's doings, at his peril. However, his past preferreds investments were based, as you say on - not enough comfort. I do not understand banking well, too many moving parts to my taste, so I ask... why the discomfort? (and re LUK, yes, I think it says something about how he feels about Leucadia equity).

 

I honestly think Buffett invested in the preferreds because it was a better deal than the equity.  He gets 6% annually, while having the option to convert to shares at $7.  Little risk on the downside and plenty of upside.  I think if he didn't get the preferreds, he may have just bought equity...but the preferreds were a better deal. 

 

And I disagree about Leucadia.  I suspect he didn't invest directly in Leucadia because of the fact there was no succession plan for a very long-time...Buffett had no interest in stepping in and running a company.  What they do is very unique, and if they didn't already have the right person in place, he wasn't going to be able to try and find the right person if both Cummings and Steinberg dropped dead...whether he owned a minority share or majority share.

 

In general, I think you could come with various questions about why Buffett didn't invest in one thing or another, and never actually know the real reason why he did or didn't.  He's invested in White Mountains, but why has he never invested in Fairfax or Markel?  You could presume a dozen scenarios on his motivation, and none of them may be right.  Cheers!   

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We've bet a good chunk of the farm on BAC now.  I think it's one of the cheapest companies I've seen since I bought Steak'n Shake at $3.50, and that company was in rough shape at the time.  The last time I saw something this good, this cheap, was Fairfax at $80...and even that was in rough shape!  I think our partners will be very happy 3-5 years from now!  Cheers!

 

With such clear conviction, why in your opinion didn't WeB invest directly in the equity? does the preferred route not suggest it's not that clear to him?

 

When Buffett invested the $5B, BAC was in a much more precarious position.  Did he not recently say he wishes now that he had invested more? 

 

Buffett invests with Leucadia in things such as Berkadia, but he never invests directly in Leucadia...does that say something about how he feels about Leucadia equity, or is there just some things that Buffett chooses to invest in one way, and perhaps not another. 

 

Don't spend all your time wondering why Buffett did or not do something.  Like everyone, including you or myself, there are things he will miss and many things he will get right.  Investing is as much an art and based on your comfort level, as anything else...Buffett had much more comfort in preferreds rather than equity at the time.  I would not be the slightest bit surprised if he buys equity at some point, and let's not forget we still don't know what Munger bought for DJCO...alot of people think it was BAC common...but would that matter?!  Not one iota to me.  Cheers!

 

One can of course disregard buffet's doings, at his peril. However, his past preferreds investments were based, as you say on - not enough comfort. I do not understand banking well, too many moving parts to my taste, so I ask... why the discomfort? (and re LUK, yes, I think it says something about how he feels about Leucadia equity).

 

I honestly think Buffett invested in the preferreds because it was a better deal than the equity.  He gets 6% annually, while having the option to convert to shares at $7.  Little risk on the downside and plenty of upside.  I think if he didn't get the preferreds, he may have just bought equity...but the preferreds were a better deal. 

 

And I disagree about Leucadia.  I suspect he didn't invest directly in Leucadia because of the fact there was no succession plan for a very long-time...Buffett had no interest in stepping in and running a company.  What they do is very unique, and if they didn't already have the right person in place, he wasn't going to be able to try and find the right person if both Cummings and Steinberg dropped dead...whether he owned a minority share or majority share.

 

In general, I think you could come with various questions about why Buffett didn't invest in one thing or another, and never actually know the real reason why he did or didn't.  He's invested in White Mountains, but why has he never invested in Fairfax or Markel?  You could presume a dozen scenarios on his motivation, and none of them may be right.  Cheers! 

 

I really do not have a bias in the equity game (again, too complex to my taste), but WeB probably preferred the preferreds over the commons, because he'd locked up $5B for 5 years, and needed the interest and the kicker. All in all in does show great confidence in BofA.

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