Bank Stocks

[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]

Dont catch falling knives

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]

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

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]

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.

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]

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?

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]

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]

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.

 

[clifp]

NCC was a stock I bought in July 2005 because it was a one of the M* Dividend Newsletter recommendation. By the beginning of this year the editor had soured on the company, saying that it was very unlikely for the management to be raising the dividend in the future. IRRC he thought management was to intent on using the money for acquistions and share buybacks.
He recommended selling NCC in the beginning of the year, I took advantage of the company buy back offer to sell my stock back to them at $38. I bet management is to happy about that transaction now. I actually made a modest 17% total return for the 17 months I owned the stock.

I don't buy every stock that Josh Peters the newsletter editor suggests, but when he says sell I pay attention. With NCC $14.50 and a dividend cut, I'd say his advice was well worth the $79 price.

 

[terminator]

well worth the $79 price.

Is there a discount available?

 

[clifp]

Is there a discount available?

I lied the price has been raised it is now $129 for members $139 for non members. 30 day free trial offer

 

[terminator]

Okay, thanks. If I weren't so [-]cheap[/-] frugal I'd probably subscribe as I gather from peripheral sources that I own probably about half the stocks on his list. I think I'll see if I can get my library to carry it.

 

[DJRR]

Citigroup is getting close to its Q3 book value of $25.51. I know a general rule is that banks are attractive when they are priced at book. Any insight into how much they are going to write off in Q4 vs. the dividend vs. the Fed cutting rates vs. new CEO.

Could be a great buy or a good way to lose a few bucks on the way to $19

 

[terminator]

Just an opinion, but I think there are a lot more attractive banks out there than C right now. They would pretty much be at the bottom of my list of banks right now. I sold mine at 44 when I noticed their low capital ratio. I think a lot of other banks have the same upside and less risk . . . and while I am not a superstitious man with the way the market is going now I refuse to say their names out loud and jinx the rest of my bank holdings.

 

[Dawg52]

I refuse to say their names out loud and jinx the rest of my bank holdings.

Mine are already jinxed. Frigging market.

 

[Nords]

Citigroup is getting close to its Q3 book value of $25.51. I know a general rule is that banks are attractive when they are priced at book. Any insight into how much they are going to write off in Q4 vs. the dividend vs. the Fed cutting rates vs. new CEO.

I think that investors are fleeing anyone who has any possibility of even thinking about cutting dividends-- no matter how remote or deluded that possibility may be.

Back after 9/11 I bought shares of Central Pacific Bank (CPF) at $21 and stopped out at $18. I felt pretty bad about it during the subsequent run-up for every financial on the face of the planet, but now they're being hit with the same dividend-cut rumors. They closed at $15 yesterday.

Buying opportunity? Sure. Volatile? You bet. Dividend cut? I'm not going to join the club.

 

[terminator]

A dividend cut is clearly the most likely scenario. They had to get a $7.5B infusion to get their capital ratios where they should be and they are writing off tens of billions of dollars. They definitely should, and probably will, cut the dividend to conserve their capital. Plenty of better, more secure yields out there than C.

 

[maddythebeagle]

Funny how some of the bank stocks got lifted with Bofa buying out countrywide.....seems Bofa is just taking a flyer after already throwing good money that way a few month back....