All these financial giants market cap dropped for more than 45%, do you think it's a good buy for a mid term investment, say 5 yrs?

I think they are too huge to fail, so what's your say? I've great interest in getting into these financial giants.

ah, I think dreamer knows the best answer for this.

All,

I do not prefer those on the list. Other than Citigroup, they are NOT money center bank. I am buying

Wachovia Bank

http://finance.yahoo.com/q?s=WB

Wells Fargo -> Warren Buffet is the MAJOR shareholder

http://finance.yahoo.com/q?s=WFC

Bank of America
http://finance.yahoo.com/q?s=BAC

Those 3 are what I consider to be the best prospect. I bought WB and WFC.

Please note that those 3 give good dividend too. So, you can held while waiting for them to recover.

Dreamer

P.S.: Citigroup is Money center bank. But, I still do not like Citigroup. I prefer banks that are fully exposed to mortgage mess and only exposed to mortgage mess. There too many other stuff at Citigroup.

This post has been edited by dreamer101: Apr 27 2008, 07:10 PM

Your reply is much appreciated, dreamer. So, here are my statements/questions.

1) After some deep research, I agree with you on WFC and BOA. Reason for you to include WB is dividend right? WB had subprime exposure but they are not coming close to WFC and BOA. After subprime losses eroded into their earnings and eventually forced them to cut dividends.

2) Would you mind to explain why you choose only mortgage lenders/banks who are only exposed to subprime? Yes, I agree that CITI is too complicated but chances to rebound will earn you more than ever?

3) Countrywide Financial comes close, being taken over by BOA. Much like JP Morgan with Fed to bail out Beat Stearn. What about Bear Stearn? it had plunged into 3 years low (or maybe more), according to my limited data. Oh, even BOA, CITI, WFC, BS have reach new-low's. WB rebounded since 1st of Jan 2008. Good time to start new year uh?

You sure that they're too huge to fail?
If I remember correctly, Countrywide and Bear Stearns came close to being wound up right?
Correct me if I'm wrong

they aren't too huge in market value compared to citi or the listed banks. citi is like one of the largest financial group in the world, having it bankrupt would have immense side effect to global market. na, it is a must save entity. oh well, prince thalaweed and temasek are in, im sure they've made their due diligence prior investing yea?

Vv.SoViEt.vV,

<<WB had subprime exposure but they are not coming close to WFC and BOA. >>

1) We are buying stock/share. So, their (WB) exposure is not as high but the stock price had been beaten down as though the exposure is high. So, it is a better deal. In a panic, everyone sells without thinking whether the problem affects all bank equally.

<<Would you mind to explain why you choose only mortgage lenders/banks who are only exposed to subprime?>>

2) I have no idea how to evaluate the exposure to all those derivatives. Nobody does. Subprime mess is easier to understand. After the banks write off the mortgage, they are in a good/better shape.

3) There are MORE PANIC coming. It is not over yet. I have set my low buy limit order. If it hits, I will buy.

Buy GOOD and WELL MANAGED companies at GOOD price. In a panic, still shop for the BEST companies. WFC and WB looks to have better management than BOA or CITI.

Disclaimer: I am buying with my "PLAY MONEY". So, this is not an investment for me. This is strictly my own personal opinion and not recommendation to buy any stock. Take my advice with a lot of cautions.

Dreamer

---

Added on April 28, 2008, 2:40 amwheimeng,

Bear Stern's shareholder lost their shirts. So, a bank may not fail but you may still lose most of your money in the process.

Dreamer

This post has been edited by dreamer101: Apr 28 2008, 02:40 AM

1) The WB really got me. I observed that nearly all major financial institutions in US are reaching new low's.

3) Worst has yet to come. Best to buy when US is in full-blown recession.

4) How do you evaluate good and well-managed company at good or undervalued price? Do you check their p/l, b.sheet and cash flow?

And lastly, I believe Temasek involvement in CITI is purely on bailout purpose. They may have corporate agreement which I dont think applicable to average investors like us. Prince thalaweed? unless you are a tycoon.

<<3) Worst has yet to come. Best to buy when US is in full-blown recession.>>

A) This statement is WRONG. Stock market in USA look AHEAD for 6 to 8 months. So, when the economy is in FULL RECESSION, the stock market will go up since people anticipating the recession will be over in 6 to 8 month.

B) I do not know and care whether the economy is in recession. The RIGHT question is what is the RIGHT PRICE to buy. You buy whenever it hits the RIGHT price.

<<4) How do you evaluate good and well-managed company at good or undervalued price? Do you check their p/l, b.sheet and cash flow?>>

C) At this stage, you check whether the bank had WRITE OFF the loan.

D) I have a short cut. I have a brother-in-law that work in this industry. He is good in evaluating whether a bank will survive. I am more a technology person.

Dreamer

A) Problem is, full-blown recession will not last for months but probably years. Soros had predicted this 3 years ago. I dont know the truth but he said it is the worst since the last economy depression in US.

B) True, but I think it is safe to buy now, some prices are REALLY low and will not drop further.

C) No comment on this.

D) You invested in NASDAQ too? You must be IT Director or something.. can I have a job in your company? LOL

The problem is greed, and there must be stricter regulations to curb excessive risk exposure to the shareholders, and to the clients. Bear Sterns is one good example. GREED will kill you overnight

Well, i believe Citigroup is too big to fail, and DIC and TEMASEK will not let their investments go to waste.

PS: Don't forget the consumer credit timebomb.

This post has been edited by AdamG1981: Apr 28 2008, 02:50 PM

Vv.SoViEt.vV,

A) Why is THIS relevant?? If you are not buying this with "PLAY MONEY", you should not speculate/gamble to begin with. BTW, I have 3 to 5 years worth of expenses in the bank to prepare for this recession.

B) You DO NOT KNOW. Ditto for me. Find out the RIGHT PRICE.

D) No, I am not an IT director and my job is not safe. I will probably lose my job in less than a year. But, it is okay.

AdamG1981,

Google "Tulip Mania". This is not new. There will always be bubble and panic. The FINANCIAL INNOVATION will run faster than the regulation.

<<Bear Sterns is one good example. GREED will kill you overnight>>

Who get killed in Bear Stern's case?? Only the share holders that are not smart enough to get out. The management collected huge bonuses all this while.

<<Well, i believe Citigroup is too big to fail, and DIC and TEMASEK will not let their investments go to waste.>>

Citigroup do not have to fail for the share holder to lose a lot of money.

<<PS: Don't forget the consumer credit timebomb. >>

This is a FINANCIAL forum. So, tell us how to profit from this??

Dreamer

This post has been edited by dreamer101: Apr 28 2008, 08:51 PM

Temasik lost about 11% of the initial investment value, both in actual shares losses and forex losses.

so it's good time for us to enter. they thought it was the right price.. but it dropped.. but anyway, nobody konws when's the lowest, you can only buy when you think it's right or value.

nevertheless, i think they are pretty 'cheap' now..

http://www.bloomberg.com/apps/news?pid=206...CoY&refer=rates

<<Citigroup, Merrill Lead Record Week of Bond Offerings (Update5) >>

All,

They just had issued a HUGE bond offering. So, they have no liquidity crisis in the short term but they will pay a high price on earning later later. The yield on the bond is very high.

Dreamer

umm, looks like a good deal, 8.4%.

any idea where can we buy bonds?

im watching Citibank...
but my studies show me that there are still storm ahead... becareful....

but i might be wrong... it might hit rock bottom already...

again.. like i said... if you are investing ...that should be long term....you get in now.....also no issue...

in 3 to 5 years... i am sure...Citibank price is higher than today...

if you are trading...for short term profit... in and out in 1 day, 1 week, 1 month, then you have to do more homework to find out when is the timing.

my 2 cents.

shrimphead,

Here we go again. A person spamming the lowyat forum to promote his/her blog. Unfortunately,

A) You had said ABSOLUTELY NOTHING in your post.

B) Given that you are TOO LAZY to even capitalize properly and put your post in a proper sentence, we know how useful your blog will be.

You are a reflection of what you posted.

Dreamer

Finance sector are good buy right now for long term invest...Just like Temasek say before,they looking for long term invest which is not buy today gain tmr...unleast u own a hedge fund father...

This post has been edited by hanif444: May 8 2008, 11:04 AM

I always used to encourage my colleague to invest in US and HK stock market. As being reason that the US subprime had hit hard to US financial sector and a recently China cool down period had put down a lot HK stock price. Nonetheless, our MYR currencies had appreciated so much since a year ago against USD and HKD.

I think this is the best time.

***Sigh... too bad Im a poor investor... cant afford it...