Bank Stocks

[Hamlet]

US Bank just RAISED their dividend by 6.25%.

A smaller raise than normal for them, but considering the environment, I think they are doing a lot better than the average bank.

I bought a little more today. Come next year, I'm going to buy them in my Roth.

Quote:

Originally Posted by AltaRed WM is the first major bank to cut dividend, in this case, by 73% UPDATE 1-WaMu cuts dividend and jobs, sets capital infusion | News | Market News | Reuters

[AltaRed]

Is anyone with deposits in Washington Mutual reducing their exposure to <$100k to stay fully within FDIC protection? While FDIC has more protection for depositors in US banks than depositors had in the UK for Northern Rock, I imagine there is a possibility of a run on WM like there was for Nothern Rock.

[haha]

I would always keep my deposits withing the FDIC limits. Why not? There is no shortage of depository institutions offering CDs, and you don't have to pay extra for FDIC insurance. On the solid commercial principle that you should never give up anything without being compensated for that give-up, use as many banks as it takes to always have the insurance.

Ha

[PoconoMike]

I would wait a couple more weeks until any year end selling is done. I would expect that a number of folks who hold banks and made money in other areas will be selling losers (banks) to offset their gains. Also don't be surprised if some of the more distressed banks reduce the dividend to raise cash to cover problems related to the sub prime mortgage business.

[VaCollector]

How LOOOOWWWWW can they GO?

BAC hits $41.01

[James5v]

BAC has a nice dividend now but will it get better and will they lower it? These are the questions.

[AltaRed]

IMHO, BAC is still at significant risk . They are loaded up with mortgages in vulnerable places like Florida, Nevada and California... and particularly in California where there are non-recourse mortgages. The banking industry will own a fair bit of RE in CA shortly.

BAC stock price could fall to ~$30-35 with possible (but unlikely) dividend cut by upwards of 50% before this is over to preserve capital. I took a very small position in BAC a few weeks ago but am keeping my powder dry through the next quarter at least.

[poyet]

Quote:

Originally Posted by VaCollector How LOOOOWWWWW can they GO? BAC hits $41.01

I'm so sorry that already loaded with piles of inherited BAC which you did not sell on time (or could not) to diversify, you also tried to catch a falling knife. We've all made the mistake and to be honest with you I should add that I've recently re-done it myself ! by thinking that some current REIT's extraordinarily high yields (e.g. 20%) would protect me from the downfall, I've made it again -> NO WAY.

When the Rate Of Change of the 200 days moving average ROC(MM200) will turn positive and when BAC will pass above its MM200, BAC will have stopped falling and it will be time to buy. Until then, it's a waste of time and money...

BTW, when this will happen I will prefer the iShares Dow Jones US Regional Banks (IAT) which has now a yield of 3,4% and will avoid the risk of a bankruptcy on one particular stock. At that time it will also be good to add some Claymore/Zacks Yield Hog (CVY) with a yield of 5,4%.

Until then or better ideas (CPFL Energia S.A. (CPL) / CLP HOLDINGS LTD SPO (CLPHY.PK) ?) keep your power dry, you'll need it !

Wish you the best.

[Gumby]

..

[RetireeRobert]

WM sold off another 3=% tpday on news of SEC investigating WM mortgage unit using inflated real estate valuations for issuing loans. WM says they have internal investigation and confident there was "no systematic inflation of RE appraisals.(They didn't say anything about "unsystematic" inflation of appraisals).

WM shares down to $13.66 I believe today.

[poyet]

Quote:

Originally Posted by Gumby One of my poorer decisions. Down 25% to today. I just sold to harvest the tax loss. I may buy back in next month once there is more knowledge about the bond insurer problem (MBIA/Ambac)

BCS over 20 years lies in a channel when displayed with a semilog scale. This demonstrates (among other things) that apart from accidents the company is well managed and matches the 3 1st Buffet's primary principles. The low band is somewhere @ 30$. But I would not buy @ 30$, would wait if I were to buy (they're heavily loaded with debt) to see a positive ROC on MM200. As long as the derivate is negative, it goes down ! I prefer to buy @ 35$ when updward motion will have resumed (if it does), than to buy @ 30$ and crack the support to dive to 25 or 20 or less and be stuck with it for month or years !!! Lost of money is cash painful, but is also a waste of time and opportunity, so it is painful twice.

BCS will certainly not match the criterions I've reminded above next month, and though a short squeeze (but just 500k short for 1.6B shares) could easily push it back to 49$ (MM150 expo), the trend so far is down. Of course it could make kind of a double bottom @ 40 but as nobody knows you have to put the odds on your side.

Wait and see. It is very difficult to refrain oneself in order to make rare (good) decisions and so tempting to keep pressing buttons to execute orders that one regrets three days later...

I know, I struggle against myself everyday and before passing an order fill in my "decision form" to check that all flags are green. Otherwise stand aside, cash is king aspecially at the bottom !

[Hamlet]

I actually ended up buying TCB in my Roth this morning at 17.17.

I think that its a little riskier than USB, but I think the upside is probably larger.

If the banks with good credit quality start having real problems, I think guns and canned goods are the only good investments

Quote:

Originally Posted by Hamlet US Bank just RAISED their dividend by 6.25%. A smaller raise than normal for them, but considering the environment, I think they are doing a lot better than the average bank. I bought a little more today. Come next year, I'm going to buy them in my Roth.

[poyet]

Quote:

Originally Posted by Hamlet If the banks with good credit quality start having real problems, I think guns and canned goods are the only good investments

My understanding of a good investment is one that goes up when I'm LONG or one that goes down when I'm SHORT.

It seems that you decided to go LONG on a stock that goes south ?

You might succeed (which I hope for you as I'm not SHORT at the same time ;-) but my humble feeling is that it is not putting odds on your side.

At the same time they have a bigger equity/debt ratio than average in the sector, don't they ?

[Hamlet]

My investing premise is that USB and TCB have good balance sheets and good credit quality, but the market is valuing them like they are going to have loads of defaults.

I just don't think a large number of prime borrowers (especially in the Midwest) are going to walk away from their mortgages. So far, the deliquencies of the mortgages these companies hold are still very low.

These stocks are going down because people are afraid, but so far I haven't seen anything indicating that those fears are justified.

I am often early to the game. When I bought MCD at 21, it dropped to 13 before it turned around. Its now pretty close to 60.

I think that in 5 years, my investments in USB and TCB will look pretty sharp.

Quote:

Originally Posted by poyet My understanding of a good investment is one that goes up when I'm LONG or one that goes down when I'm SHORT. It seems that you decided to go LONG on a stock that goes south ? You might succeed (which I hope for you as I'm not SHORT at the same time ;-) but my humble feeling is that it is not putting odds on your side. At the same time they have a bigger equity/debt ratio than average in the sector, don't they ?

[poyet]

Quote:

Originally Posted by Hamlet I am often early to the game. When I bought MCD at 21, it dropped to 13 before it turned around. Its now pretty close to 60. I think that in 5 years, my investments in USB and TCB will look pretty sharp.

I sincerely hope you'll make money. I does not take anything away from me :-)

As far as MCD is concerned I would have done the last short on the 31/10/2002 @ 18,40, covered @ 15,2 on 31/03/03 then gone long on 7/07/03 @ 21,76.

On USB I would be short since the 27/12/2007 @ 32,20 and remain.
On TCB I would have gone short on 28/08/07 @ 24,98 and covered on 26/09/07@ 26,4 for a (small) loss and stayed aside since (and would have missed the big slide since the tech signal early oct was ambiguous.

I try to mix TA and fundamental analysis (FA). Cutting a long story short - FA to go long on fine stocks with good LONG TA signals, FA to go short on loosers (better say distressed securities) with fine TA SHORT signals. Globally I try to trade with the wind(s).

For example ENTER SHORT (3 example of short signals) when:
(Cross(Mov(CLOSE,50,E),Mov(CLOSE,20,E)) AND
(ROC(Mov(CLOSE,200,S), 15, %) < -0.6 OR
(ROC(Mov(CLOSE,200,S), 15, %) < -0.2 AND
ROC(Mov(CLOSE,150,E), 12, %) < -0.2)) AND
ROC(Mov(CLOSE,50,E), 10, %) < 0 AND
CLOSE < Mov(CLOSE,200,S)) OR
(Mov(CLOSE,4,E) < Mov(CLOSE,9,E) AND
Cross(Mov(CLOSE,18,E),Mov(CLOSE,9,E)) AND
(ROC(Mov(CLOSE,200,S), 15, %) < -0.6 OR
(ROC(Mov(CLOSE,200,S), 15, %) < -0.2 AND
ROC(Mov(CLOSE,150,E), 12, %) < -0.2)) AND
ROC(Mov(CLOSE,50,E), 10, %) < 0 AND
CLOSE < Mov(CLOSE,200,S)) OR
(Mov(CLOSE,4,E) < Mov(CLOSE,9,E) AND
Cross(Mov(CLOSE,18,E),Mov(CLOSE,4,E)) AND
(ROC(Mov(CLOSE,200,S), 15, %) < -0.6 OR
(ROC(Mov(CLOSE,200,S), 15, %) < -0.2 AND
ROC(Mov(CLOSE,150,E), 12, %) < -0.2)) AND
ROC(Mov(CLOSE,50,E), 10, %) < 0 AND
CLOSE < Mov(CLOSE,200,S))

CLOSE SHORT when:

ROC(Mov(CLOSE,200,S), 15, %) > 0 OR
CLOSE > 1.02 * Mov(CLOSE,200,S) OR
Cross(Mov(CLOSE,20,E),Mov(CLOSE,50,E)) OR
Mov(CLOSE,4,E) > 1.01 * Mov(CLOSE,50,E)

Cheers.

[Hamlet]

Thanks. I hope you make money too. We can check this thread in five years and see where I'm at.

I've never put any stock in TA. It seems too much like astrology or tea leaf reading to me.

I would be reluctant to be short a stock yielding 5.5+% that Warren Buffett is long on (USB).

Seems like any kind of good news in the market has the potential to generate a huge short squeeze in alot of the better financials (and REITs).

I've noticed that the short interest on a number of the banks and REITs I follow is pretty large. It could be that I've missed something dramatic, but if things turn around, it can be tough to cover a short when 10-15% of the float is other shorts trying to cover at the same time.

What if the whole financial market isn't actually melting down?

Quote:

Originally Posted by poyet I sincerely hope you'll make money. I does not take anything away from me :-) As far as MCD is concerned I would have done the last short on the 31/10/2002 @ 18,40, covered @ 15,2 on 31/03/03 then gone long on 7/07/03 @ 21,76. On USB I would be short since the 27/12/2007 @ 32,20 and remain. On TCB I would have gone short on 28/08/07 @ 24,98 and covered on 26/09/07@ 26,4 for a (small) loss and stayed aside since (and would have missed the big slide since the tech signal early oct was ambiguous. I try to mix TA and fundamental analysis (FA). Cutting a long story short - FA to go long on fine stocks with good LONG TA signals, FA to go short on loosers (better say distressed securities) with fine TA SHORT signals. Globally I try to trade with the wind(s).

[poyet]

Quote:

Originally Posted by Hamlet Thanks. I hope you make money too. We can check this thread in five years and see where I'm at. I've never put any stock in TA. It seems too much like astrology or tea leaf reading to me. I would be reluctant to be short a stock yielding 5.5+% that Warren Buffett is long on (USB). Seems like any kind of good news in the market has the potential to generate a huge short squeeze in alot of the better financials (and REITs). I've noticed that the short interest on a number of the banks and REITs I follow is pretty large. It could be that I've missed something dramatic, but if things turn around, it can be tough to cover a short when 10-15% of the float is other shorts trying to cover at the same time. What if the whole financial market isn't actually melting down?

TA is very... technical ! so running the same TA system will always provide the same signals and same results (and can be backtested). So it not as reading tea leaves :-) much less emotional :-) much more formal.

I've bought some RIT yielding 15% (which is a mere TA non-sense and keep blaming myself for it). 15% yield was not enough to be immune from the continuous dive ! I would have made money going SHORT... So I'm not impressed with 5,5% :-) Some chaps on the board are badly burnt with NCT yielding 23% now and more everyday as it keeps diving... (and -3,45% more today).

Short squeeze(s) provide good pullback to the MM150 or even sometimes MM200 (and offer good new short entries), but never turn a stock around. Only fundamentals turn stocks around or if not (80% of the time they turn nowhere) they simply get de-listed in the end after .O, .OB, .PK, .nomorethere ticker change process :-)

Finally, I'm not kind of a pessimistic guy. No need to expect a whole meltdown to go short. It is just a matter of surfing the wave the way it unfolds.

Today I would appreciate not being so LONG on the market. ^NDX -3,26% is not a good day for me :-) But so far I keep seeing more LONG than SHORT opportunities on this market, so far... might change !

[haha]

Ok boys, time to put away the porn and do some research.

TCF has been off my radar, but it looks like a good one to check out. It has one thing I like to see in a beaten down stock- meaningful recent buying by insiders.

Signal schmignal- if you buy weak stocks you have to expect that they might stay weak. So you must be as sure as you can be that your purchase price is truly a bargain.

Let's see if we can get this discussion going. Unless the world is ending, there appears to be soem good merchandise for sale cheap. Yesterday I peeled of some of an offshore driller, and redployed some of it in financials.


Today I wish I had sold more!!

Ha

[FIYes]

Didvidend paying stocks are great as long as they keep paying the dividend. Anyone have any comments about the National City news? "U.S. regional bank National City Corp. said Wednesday it would cut 900 jobs and halve its quarterly dividend, the first cut since the payout began in 1935. "

I own about 100 shares of NCC in DRIP account----and I must say I really haven't paid much attention to it. Just curious what others have to say about NCC.

[terminator]

Quote:

Originally Posted by FIYes I own about 100 shares of NCC in DRIP account----and I must say I really haven't paid much attention to it. Just curious what others have to say about NCC.

The first dividend cut in my portfolio since 1994.

Its profits were coming heavily from the mortgage origination business . . . and while it sold its subprime loan businesses a year ago it evidently retained liability for some of those losses. I'd probably have sold it but my basis is essentially zero since it came from the acquisition of another bank which I held for a long time. Anyway, NCC was one of the companies I was indirectly referencing on the other thread with a terrible buyback . . . $37 per share this spring and they took on debt to payoff to retire 20% of their stock. Now trading at $14.50. Ugh. To say there are better run and more profitable banks is an understatement.