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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (31239)	6/20/2008 1:37:47 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78958

"I dont know how anyone can look at the banks and say they are great investments when its all so murkey." I agree that they are murkey and that it's tough to know how much they are worth. It is also true that anything with significant debt load can go BK. One approach would be never to buy companies that have to rely on overleveraged balance sheets or high liabilities to operate. That would exclude banks, insurance companies, BDCs, most housing stocks. Still leaves a lot of companies to invest into. ;) There are tons of companies with clean balance sheets and cash on hands (not invested into some murky CDOs). But on the same vein, if longs don't know what banks are worth, the shorters don't know it either. The rescues and turnarounds can be swift and brutal. "I dont know what they are worth and I doubt anyone else does." Buffett thinks to know what they are worth on the long side - he is still buying WFC and USB. Some shorters think that they know what banks are worth on the short side. I would go with Buffett. ;) This is somewhat faith-based investing, so I will never go over ~10% of portfolio in this area. And I won't claim to have a very deep insight into the banks.