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

To: Madharry who wrote (31442)	7/11/2008 10:45:42 AM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78666

I agree that financials are very scary. I remember a lot of people recommending FRE and FNM over the years with the suggestion that they are government backed and can't fail. Right now every one of FRE and FNM investors is under water (OK, except 1991 investors ;)) and the ultimate outcome is unknown. I remember looking at them numerous times and having no clue how to value them. On the other hand, people who invest into financials that will survive this downturn will get great returns. Of course, it is very hard to say who will survive without huge dilution. I'll just ride Buffett's coattails on BAC/WFC/USB/AXP and of course BRK/WSC. Note that BAC is possible the smallest Buffett position and may not be really a "core" holding, so perhaps it should not be counted as "Buffett approved".

To: Madharry who wrote (31442)	9/17/2008 1:14:17 PM
From: Paul Senior	Read Replies (5) \| Respond to of 78666

For the first time, I'm now starting to worry about GE and its financial exposure. Company is AAA rated. At this point that seems to me less relevant than the significance of the size of GE's debt - $561B. In this market it can't all be "good" debt. With a 4.7 d/e ratio and $19B in cash, these GE numbers all become a focus point in this market. When I look at AIG's gross numbers -- debt at $188B, cash at $58B, I have to wonder how dangerous an investment in GE could be. Doesn't help that GE at $23/sh is already at about a nine year low. Trying to figure upside/downside. Possible that GE could continue down. Maybe $15 in this kind of market. Upside hasn't worked for so many years -- maybe if DOW recovers, GE up about 20% from 23 to maybe 28. I'll call it my mistake to have made GE a full position for a ltb&h. I'm going to take my lumps and close position. If I reenter, it'll be for a trade.