Financial stocks are really cheap right now.

[Shaze]

Does the housing crisis still have a way to go downhill ???? As soon as the housing crisis hits bottom I'm buying all these cheap financial stocks.

[tranza]

Ok then.........

[EscortBiz]

If you are a long term market investor then just buy up some financial stocks now and just hold it not just banks but also stocks like GS etc, will it get even cheaper im sure there will be plenty of tank days but its very well priced now my advice is only use an amount of money you know you will be comfortable sitting for a while

[ADL Colin]

Well, they are cheapER.The question is what assets do any such financial companies hold and what is the potential risk to them? For many companies it is just not very clear at all (read SEC reports). And also, in many cases these companies have diluted the value of their shares by selling more shares or bonds.

In the 1990 or 1991 Berkshire Hathaway report (can't remember) there is a simple analysis of WFC which shows some assumptions one might make to consider the risk a bank faces from defaults on its mortgages.

Buffett still holds lots of AXP and WFC and made some positive comments at the annual meeting.

[cybermike]

any suggestions I bought a couple hundred shares of WM and it just keeps going down

[teomaxxx]

In fact they are really expensive....

Nobody really knows what they are worth as there are a lot of hidden stuff in Level 2 and Level 3 assets, false accounting eg.http://www.bloomberg.com/apps/news?s...U&pid=20601109), a lot of lies by CEOs, a lot of unpredictable things on the way (like credit default swap blowout)

The second fact is, that all banks made huge profits from debt bubble 2002-2007 and these gains arent coming back anytime soon. Rather the banks now and will suffer for years from bursting of this debt bubble.

[ADL Colin]

Originally Posted by teomaxxx

Nobody really knows what they are worth.

[notime]

same as Vegas; will you win or loose. Will it be red or black. I rather work for my money so I have control over it

[teomaxxx]

Originally Posted by ADL Colin

I should rather wrote, nobody knows what they will be worth...too many unkown things to buy finacial stocks...
Often even insiders have no clue (look on current stock price):
http://finance.yahoo.com/q/it?s=TMA
http://finance.yahoo.com/q/it?s=IMB

[ADL Colin]

Article published in the past few hours.

Be Wary of Beaten-Down Bank Stocks

"Think of all the Wall Street analysts who covered the banks full time -- and were still caught completely by surprise when the wheels came off last year. For that matter, think of the people who were supposed to be running many of these institutions. Last July, former Citigroup CEO Chuck Prince was still making bullish comments about the mortgage business. And then there was Bear Stearns. Even the board didn't know how much it was worth at the end. Two dollars a share? Ten dollars? Your guess was as good as theirs. It hardly inspires confidence. If the insiders can't value the business with confidence, what hope do outsiders have?"

[DaddyHalbucks]

Buy low, sell high.

[teomaxxx]

Originally Posted by teomaxxx

I should rather wrote, nobody knows what they will be worth...too many unkown things to buy finacial stocks...
Often even insiders have no clue (look on current stock price):
http://finance.yahoo.com/q/it?s=TMA
http://finance.yahoo.com/q/it?s=IMB

both of them are on the verge of bankrupcy now. And financials are still expensive, since the risk is still not clear and wont be clear for a long time still.

[crockett]

I wouldn't touch any of those kind of stocks with a 10ft pole right now. I bought some FRE while it was low today, taking a risk on a hopeful quick flip. I mean it's dipped from $3.xx on Fri to $12. Today it ranged from $10 down to the mid $6's, I bought low today hoping I can see a quick flip in the next few days.

I think companies with real products that are taking hits now with the rest of the market will be better long term investments. I mean hell look at Ford right now it's under $5. It's in it's 52 week low right now with a high of $9.50.

I mean hell they are having a rough time right now, but they just like GM will get their act together and turn around when the economy starts doing better. There are tons of other companies in the same boat right now and they will eventually be back as well.

[teomaxxx]

Originally Posted by teomaxxx

And financials are still expensive, since the risk is still not clear and wont be clear for a long time still.

this is what I was talking about, from the Roubini, who was/is 100% spot on whole financial crises:

"Most financial institutions are putting increasing numbers of assets in the illiquid buckets of Level 2 and Level 3 assets. While FASB 157 should prevent manipulation of the valuation of such illiquid assets, forbearance by the SEC, the Fed and other regulators allows a massive amount of fudging. An insider told me that in a major financial institution the approach is as follows now: top management decide in advance what the announced writedowns should be and folks dealing with the toxic/illiquid assets come up with totally ad hoc assumptions to make sure that such illiquid assets are valued consistently with the decided-in-advance amount of writedowns and losses. This is not earnings smoothing; this is active manipulation and falsification of financial results aimed at creating even more obfuscation of the true state of financial institutions. This obfuscation is actively abetted by the SEC, the Fed and all other regulators that are now in forbearance crisis management stage where the objective is to avoid at any cost anything that may trigger a financial meltdown. Thus, most of these earnings reports are not worth the paper they are written off."

and

“The few and rare banks and mortgage/MBS analysts that were willing to provide a realistic assessment of the mortgage market and the financial conditions of US banks and brokers have been effectively muzzled by upper management. With the partial exception of Meredith Whitney who benefits from being at an independent research firm, many other analysts have gone into the spin mode that the Fed, the regulators and the senior management of these financial institutions have dictated to them. Sell-side research that was never independent – even after the additional Chinese walls that the corporate scandals of the early part of the decade led to – is even less independent today. So you have financial institutions manipulating at will their earnings and analysts falling for this supreme baloney.”

[ADL Colin]

Nice bump. Now comes the tricky part. If it gets worse it could get much worse. But maybe we can hold the line. A lot depending on housing prices. What a nightmare for banks if housing declines another 10%. No one knows ...

[ADL Colin]

Originally Posted by teomaxxx

With the partial exception of Meredith Whitney who benefits from being at an independent research firm, many other analysts have gone into the spin mode that the Fed, the regulators and the senior management of these financial institutions have dictated to them.

She misses as much as anyone else IMO. "expert opinion". Blah.

[teomaxxx]

Originally Posted by ADL Colin

She misses as much as anyone else IMO. "expert opinion". Blah.

from wikipedia:
In 2007 she was listed as the second best investor on Forbes.com's list of "The Best Analysts: Stock Pickers"

she was spot on with C, MER and UBS at the time, while 99% of regular analysts were sucking cock of Wallstreet CEO´s.
She has definately some kind of balls :-)

[dready]

If you can figure which ones aren't about to go bankrupt, you should do great

[shadowsdrop]

bump for this thread

[teomaxxx]

Originally Posted by teomaxxx

In fact they are really expensive....

Nobody really knows what they are worth as there are a lot of hidden stuff in Level 2 and Level 3 assets, false accounting eg.http://www.bloomberg.com/apps/news?s...U&pid=20601109), a lot of lies by CEOs, a lot of unpredictable things on the way (like credit default swap blowout)

The second fact is, that all banks made huge profits from debt bubble 2002-2007 and these gains arent coming back anytime soon. Rather the banks now and will suffer for years from bursting of this debt bubble.

hope you guys hold my advice. financial stocks were never cheap, they were always expensive, if one looked to the future.

[brandonstills]

Well, that's the idea...

I wanted to put my money in gold 2 years ago. Sadly I have lots of credit card debt from not working a full time job for ages and was putting it all towards credit cards.

[DBS.US]

When prices are down, Hold and buy more

[woj]

Originally Posted by DBS.US

When prices are down, Hold and buy more

[teomaxxx]

Originally Posted by teomaxxx

hope you guys hold my advice. financial stocks were never cheap, they were always expensive, if one looked to the future.

it looks like that in a few days everyone will find out that finacial stocks being cheap was only accounting game.
see todays market, while I am still in put positions or short on financials I pray for a usual "goverment sticksave to save a markets". this is really enough and threating to take down whole system into - 30% GDP next year, like in 1929

[flashfire]

I'm keeping my money in mattresses...havent lost a penny probably the best investment around right now

[EmpireAutopilot]

http://www.gfy.com/showthread.php?t=860941

[EmpireAutopilot]

Originally Posted by DBS.US

When prices are down, Hold and buy more

When prices are down but still vastly overvalued "hold and buy more" is a recipe for disaster.

[grumpy]

dont invest in financial institutes right now, DONT, as soon as countrys start to buy banks there are no real shareholders anymore ( look at fortis )

[Naughty]

how about now?

;)