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

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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...

Not necessary, it largely depends how USD play out for the future, those (especailly European and Japanese) invested in US market in recent years, even though stock up 10%, it still can't offset the currency loss of USD which has depreciated more than 10% over the years.

So it depends on how USD situation also. One thing to remind, dropping more doesn't mean it is cheaper than those dropped less one. One needs to use fundamental valuation point to justify whether it is cheap or not.

FYI, HKD is pegged with USD so goes down together.

This post has been edited by cherroy: May 19 2008, 04:51 PM

MYR has basket currency, the currency fluctuation should be very well controlled by BNM.

i'm thinking of investment of 3-5 yrs.

Citigroup $16.820 now..is time to accamulated

Stay away from financials, especially those with really big exposure to subprime. The subprime crisis is just the beginning, it will also lead to credit card default to increase.

Freddie Mac...another Bear Stear?

hi guys,do you all think the subprime crisis already over?
i saw some news state that some of the big financial company may gone in few years later...
Another question,do you guys think that WFC's share price going uptrend ?or just still a lot of space to drop?
your opinion is appreciated thx

It is not like reaching one date, then full stop, it is over. It never will be like that. The credit crisis will be over (for sure it won't last forever, as free market is self correcting mechanism) in a gradual form which there is not indicator to say it is over or not. As long as bank balance sheet improving and become healthy, and credit become loosen over the time, then credit crisis will gradual improve. While housing bubble burst, (house price dropping) become stablise and financial instituition deleveraging into a more comfort zone then with situation improve across the banking and especially investment banks, then it is positive factor for the crisis to be over.

The main problem of recent crisis is that nobody knows what is the card behind on each one. As with subprime crisis exploded, market knew there are some bad cards behind certain players (banks/investment banks), but don't know whom actually and how much, that's why the credit crisis persist until now (after 1 year already)

I have to agree with Dreamer's post earlier, that buying these financials by using the mortgage crisis as a metric means you have to isolate it down to which ones were mortgage only players, vs little to no exposure at all. Unfortunately, all those mentioned are diversified financials, so it's hard to judge.

Bear Stearns long downplayed their exposure to MBS's and CDO's, and despite the market hearing that their credit position evaporated over the course of a week, most of us 'inside' knew this was not the case. In fact, they had been accumulating positions in that market for quite some time, and were one of the first banks along with Merrill to go aggressively in. The worst part was that their risk management business unit as well as the most experienced guys were either just coming off the cusp of the management cycle or too busy playing bridge in some mid-western competition.

I still love C, despite repeated losses from my initial investment point. Not sure about Pandit's experience - he didn't institute all that much newsworthy changes while I was still with Morgan, despite being the head of several business units. Still, what more can he do besides wait out the crisis, right?
I'm not sure I agree with the idea of write-offs vs write-downs as I see these two terms being used interchangeaebly on these forums incorrectly. Write down means when marked to market the positions are adjusted on the books, but the position is still held. This means that if the market corrects, the same positions can potentially recover - write-offs mean the positions are gone from the books to never materialize.

These banks are writing-down massive amounts of debt, but the strongest ones can still hold their positions, especially those MBS's and CDO's tied to all the dilapidated homes in the mid-western US. Seriously though, it ain't looking pretty, and think about where we are (timeframe wise) compared to when this all started 'happening.' We've barely moved forward - regardless of what capital lending efforts and how many bankers are losing their jobs, the amount of losses we're looking at are staggering. It's going to be a long road ahead.

shall we go now?

For those of you trading US stocks, which trading agent do you use? What's the easiest way to open a trading account for US stocks?

looking for Merill Lynch at $20....since Temasek leverage at $24 with USD 6 billion already...

I use DBS in Singapore and Scottrade in the U.S.

DBS is pretty lousy for U.S. trading IMO and I do not recommend it, as there are no real time quotes and most importantly the trade execution time isn't ideal.

Scottrade is a lot better, but is geared for U.S. residents.

I entered two identical orders in both systems, and the one in Scottrade was picked up a full minute earlier based on the recorded transaction time. I believe the lag in DBS is done such that they can put more money in their pockets by shaving the difference between the market price and my limit order. In some cases I have had some orders execute in Scottrade, while not executing at all in DBS! This has made me extremely upset, as the market had obviously moved past my limit order (both identically set) but wasn't triggered by the DBS system. I've complained about this to my banker and to customer service and they simply replied that the system wasn't designed for day trading and that some price variances are expected. They recommended that I place an order directly through my banker, at about 5x the cost.

DBS charges about 29.00 USD/trade
Scottrade charges 7.00 USD/trade

The recent take over of Freddie and Fannie has somewhat increase my risk appetite. I am looking at WB, C and AXP.

As some of you might know, I have 1000 shares of ETFC (Etrade) for my mid term investments. The main reason why i purchased Etrade is because of the turn around plan and it has quit the residential lending business. Another big factor is the decline in oil prices. History has shown that when oil prices decline rapidly, it's a start of a major rally in the US equities. As the emerging markets slow down considerably and battling high inflation, more and more investors will snap up cheap US financials especially since Freddie and Fannie had been taken into conservatorship. Couple of banks will take a hit if their capital holdings are mostly Fannie and Freddie preferred shares but in the long run, home prices will stop its rapid declining and mortgage rates are more appealing.

Ah, and not to mention Ben will cut interest rate next year.

Dollar superbull + low oil prices = US equities RALLY.

This post has been edited by AdamG1981: Sep 11 2008, 02:48 AM

but dont touch Lehman yet...even it drop more than 50% in a week time..

I'm 14 this year but I doubt they'll go pokai. Just my 2 cents.

Citi is already overpriced.

ML : dead

the other 2 , i would leave out , rumour has it UBS was a BIG player in the SBOTCs. And that would also include CS though not as much

hi i agree with u chino; singapore securities suck; i am using uobkayhian, their system for us and hkse is too slow, so i am using interactivebrokers.com(ib) which is us base which provide better intraday trading. but one thing i would like to ask u just for comparison
let say if u didnt trade for a month and as if u have 50 counter in us stock market, is scottrade charging any custody fee? just for ure info
kayhian 2 dollar percounter, ib 10usd for all inactive months.

regards
norman

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Added on October 1, 2008, 12:57 amcitigroup use to be top selection by saudi arabian for their efficent and effective management, can collect onceprice hit below usd13.50
well calculated base on growing EPS, dps, average p/e ratio, roe, still the one worth to collect below 13.50usd.i wont be like lehman as it asset is number 1 in us,total asset 2,187,631mill quote from mergent summer 2008.

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Added on October 2, 2008, 11:44 pmhi chino, i contacted scottrade sales personal,
this is the reply
Dear Investor:

Scottrade would like to thank you for your interest in our company.

Because of the way we are structured and because of certain industry licensing requirements, at the present time Scottrade can only establish accounts for U.S., China, Taiwan and Hong Kong residents.

Again, thank you for your interest.

Sincerely,

James Lu
Asia Pacific International
Scottrade Inc

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Added on October 10, 2008, 12:43 pm
WELL JUST BOUGHT CITI 2000 share at 13 usd last night, going to buy 2000 more if fall below usd 11 per share.

citi goodbuy

This post has been edited by normanTE: Oct 10 2008, 12:43 PM