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

To: Paul Senior who wrote (43765)	8/7/2011 11:28:48 PM
From: E_K_S	Read Replies (1) \| Respond to of 78740

Hi Paul - Citibank is the only bank I still own (it's in the IRA w/ a much higher cost basis) but just as you stated "it's a black box", I would never add more shares until (1) it is split up into separate operating companies I can understand or (2) at least the U.S. residential housing market stabilizes. Here is a link to a post that gcrispin posted on the Fundamental Value Investing thread today regarding BAC. I know BAC has significant exposure to the bad loans they still hold but now the Gov (Fannie Mae & Freddie Mac) is making them buy back loans they previously considered sold and off their books. Apparently several more of these "put back" loans are going to further sour they balance sheet. Message 27549839 I still think the housing market needs to drop another 20% to clear out all of the foreclosure inventory (including the shadow foreclosures) and according to the article, BAC has figured in their loss estimate at most a 3% decline in real estate prices. I found this quote from Morningstar that gcrispin posted to be quite concerning: "...For instance, the bank is estimating a 3% decline in home prices for 2011 and a 1% increase in 2012. For every percentage point it is off, the bank will need to take more than $550 million of pretax losses just on pre-existing problem loans and put-backs (and this figure does not include the greater severity of losses on mortgages that are still performing at this point but may go bad in the future). Additionally, we continue to wait for a foreclosure settlement with the state attorneys general that could cost Bank of America several billion dollars by our estimates...." I am not sure of Citicorp's exposure to the mortgage industry but IMO BAC is going to report a lot more losses before it is over. Citicorp has to be in the same boat. --------------------------------------------------------------------------------------------- These are my top picks for tomorrow. AGL has made it back on my list. I like their intrastate natural gas pipelines and distribution facilities when I compare them to SEP & TCLP. My last buy was $35.00/share. Their LT Debt to annual net income is about 50% higher than SEP or TCLP but still in the low territory for a utility. Their PE and Forward PE is the lowest in the group at 13.07 and 11.65 respectively. finance.yahoo.com With Oil now below $84.00/barrel (Bloomberg shows $83.99 real time), I just might have my chance at a few MHR shares below $5.00. My last sale on MHR was in May at $5.50/share and I would like to buy these shares back. Although the risk/reward probably does not match up to C I consider the downside risk small especially when I factor in the quality of the assets I am buying. EKS

To: Paul Senior who wrote (43765)	8/8/2011 12:46:48 AM
From: Spekulatius	Respond to of 78740

re C - I am more positive on C and I agree with some of the bullish perspective, regarding the international scope of the business. I am still not certain that C current CEO (Vikram) has the means to control this monster. Another thing that I noticed that C participates in about every calamity that occurs somewhere in the world. I don't think that C has the issues with mortgages that BAC has. However they have exposure to Europe (limited as they say) and they have a more international investment banking and trading operation and whom knows what kind of dogshit paper they are holding now. We are having dislocations in the credit markets again and it's hard to know how this works out for banks. For me, I'd rather limit my exposure for now unless things get really ridiculous and those stocks trade like options again.

To: Paul Senior who wrote (43765)	8/15/2011 6:33:00 PM
From: E_K_S	Read Replies (1) \| Respond to of 78740

Paulson’s Hedge Fund Sells Citi, BofA Shares By Saijel Kishan - Aug 15, 2011 2:41 PM PT bloomberg.com From the article:"...John Paulson, the billionaire hedge- fund manager whose biggest fund has lost 31 percent this year, sold shares in Citigroup Inc. (C) and Bank of America Corp. (BAC) in the second quarter. Paulson & Co. held 33.5 million shares of New York-based Citigroup as of June 30, down from 41.3 million shares in the first quarter, according to a filing today with the U.S. Securities and Exchange Commission. The hedge fund held 60 million shares of Charlotte, North Carolina-based Bank of America at the end of the second quarter, compared with 124 million in the first quarter, according to the filing. Paulson, 55, who has been betting on an economic recovery by the end of 2012, scaled back bullish bets after losses this year and told clients in June that he reduced his stake in Bank of America, which slumped 18 percent in the second quarter and about 29 percent since then. Financial shares, including Citigroup and Bank of America, which were among the hedge fund’s biggest U.S. stock holdings in the first quarter, have been a major part of his recovery bet....". ============================================================================= According to the article Paulson also decreased his stake in Transocean Ltd. (RIG). He still like Gold though. EKS