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

To: Spekulatius who wrote (31839)	8/26/2008 1:55:42 AM
From: Paul Senior	Respond to of 78751

Yes, possible AIB, other banks could crater because of real estate loans. My limited understanding of the r.e. market in Ireland is that subprime is/was a very small component of overall loans, and that Irish banks had somewhat stringent(?) requirements (lower loan-to-capital ) which meant borrower has had to put up more of a downpayment compared to what happened in later stages of USA r.e. euphoria, i.e. 0% down. So some cushion there now for the Irish banks. But of course we don't what will happen if such cushion is removed with further housing/economic declines in Ireland. ================== How does one "be careful with Irish, British and Spanish banks"? If one can't/won't do the proper due diligence, then maybe one should stay away. How can a person even do such due diligence? - difficulty in getting info. like access to paperwork on all the key loans or businesses, understanding legal/accounting differences, obtaining current knowledge of local economic/legal issues. These difficulties remain another reason to stay away. Maybe one can find a brokerage firm tracking these businesses and have some faith in their analysts' determinations of value. Which firms, and who are the trustworthy analysts? -- another problem. ========================= My opinion is that yes, some of these banks may get wiped out. Some will come out of this though, and their stocks will do well. Maybe they'll do well from current levels. Maybe the market's too optimistic still, and the stocks will come back all right, but only up from a level far below where they are now. Those rewards to the winners --- that seems to attract me, so I want to be in. But which stocks and how to be careful? For me I will attempt to control risk by limiting position size and by selecting a package of stocks. On the assumption my winners will win more than my losers lose. And I'll control risk by limiting $ bets in any one, and also limiting total $ invested in the sector. For now, I'm just with [t]AIB[/t] and [t]BBV[/t].

To: Spekulatius who wrote (31839)	8/26/2008 9:32:26 AM
From: gcrispin	Read Replies (1) \| Respond to of 78751

If my memory serves me correctly, I thought you owned AIB as I believe we had a discussion about this stock previously. Did you sell your position? siliconinvestor.com FWIW, DB is the primary seller of RE in the county where I live. According to the Morningstar excerpt below, they still have a ways to go. "Deutsche Bank reduced its remaining exposure to key risky assets to EUR 44.6 billion, from EUR 55.2 billion in the first quarter; more than half of its remaining exposure is to leveraged loans, which have been marked down to about 91 cents on the dollar." I was in East Berlin last summer. There is quite a transformation occurring there. I didn't think prices were inexpensive, but that could have been influenced by the declining dollar.