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  1. #1301
    Quote Originally Posted by JNort View Post
    Banks?
    Jeffrey also suggested some banks, both recently and a while back...and I thank him for those suggestions!

    I guess I'm trying to predict what non-online businesses (publicly traded, of course), who have been struggling this whole time, might see some bounce-back when folks feel (even more?) comfortable returning to pre-Covid behaviors. Education is one area where I think a lot of us would like our kids (both younger and college-aged) to get back to doing stuff in person...but generally those are not-for-profit entities (I'm reluctant to look into for-profit universities, for various reasons, but who knows.)


    Of course, another possibility is that life will never go back to the way it was, and that Amazon & Co have "won"...

  2. #1302
    Quote Originally Posted by construe View Post
    Jeffrey also suggested some banks, both recently and a while back...and I thank him for those suggestions!

    I guess I'm trying to predict what non-online businesses (publicly traded, of course), who have been struggling this whole time, might see some bounce-back when folks feel (even more?) comfortable returning to pre-Covid behaviors. Education is one area where I think a lot of us would like our kids (both younger and college-aged) to get back to doing stuff in person...but generally those are not-for-profit entities (I'm reluctant to look into for-profit universities, for various reasons, but who knows.)


    Of course, another possibility is that life will never go back to the way it was, and that Amazon & Co have "won"...
    My pleasure, I hope you bought some!

    In March & April, my largest dollar purchases were AAWW, CFG, and CMA. Iíve recently decreased my ownership in AAWW and CMA. Recently, I made a similarly sized purchase of C, in the mid-40ís, and relatively smaller sized purchases of FNF and FAF.

    Iím currently very heavily weighted in financials! My riskiest financial position is ELVT. Overall, Iím currently at 60% equity.

  3. #1303
    Join Date
    Dec 2011
    Location
    Albemarle, North Carolina
    Quote Originally Posted by construe View Post
    Jeffrey also suggested some banks, both recently and a while back...and I thank him for those suggestions!

    I guess I'm trying to predict what non-online businesses (publicly traded, of course), who have been struggling this whole time, might see some bounce-back when folks feel (even more?) comfortable returning to pre-Covid behaviors. Education is one area where I think a lot of us would like our kids (both younger and college-aged) to get back to doing stuff in person...but generally those are not-for-profit entities (I'm reluctant to look into for-profit universities, for various reasons, but who knows.)


    Of course, another possibility is that life will never go back to the way it was, and that Amazon & Co have "won"...
    Try manufacturing related stock.
    "The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge" -Stephen Hawking

  4. #1304
    What do you do when your online brokerage's website and app aren't working? Maybe they are just trying to save me from myself!

  5. #1305
    Quote Originally Posted by YmoBeThere View Post
    What do you do when your online brokerage's website and app aren't working? Maybe they are just trying to save me from myself!
    Phone them. The established brokers still let you trade the old fashion way. Not sure about the neo players (Robinhood, Wealthfront).

  6. #1306
    Join Date
    Feb 2007
    Location
    Raleigh, NC
    Quote Originally Posted by JNort View Post
    Banks?
    Quote Originally Posted by construe View Post
    Jeffrey also suggested some banks, both recently and a while back...and I thank him for those suggestions!

    I guess I'm trying to predict what non-online businesses (publicly traded, of course), who have been struggling this whole time, might see some bounce-back when folks feel (even more?) comfortable returning to pre-Covid behaviors. Education is one area where I think a lot of us would like our kids (both younger and college-aged) to get back to doing stuff in person...but generally those are not-for-profit entities (I'm reluctant to look into for-profit universities, for various reasons, but who knows.)


    Of course, another possibility is that life will never go back to the way it was, and that Amazon & Co have "won"...
    Quote Originally Posted by Jeffrey View Post
    My pleasure, I hope you bought some!

    In March & April, my largest dollar purchases were AAWW, CFG, and CMA. Iíve recently decreased my ownership in AAWW and CMA. Recently, I made a similarly sized purchase of C, in the mid-40ís, and relatively smaller sized purchases of FNF and FAF.

    Iím currently very heavily weighted in financials! My riskiest financial position is ELVT. Overall, Iím currently at 60% equity.
    First, thanks for posting guys, it's interesting reading (plus I did buy some CFG and CMA, both of which are up). I do have a question....why banks and financials at this time?

    I'm asking not to question your judgement, I'm just learning here and I like to read educated opinions on what makes things work and how.

  7. #1307
    Quote Originally Posted by elvis14 View Post
    First, thanks for posting guys, it's interesting reading (plus I did buy some CFG and CMA, both of which are up). I do have a question...why banks and financials at this time?

    I'm asking not to question your judgement, I'm just learning here and I like to read educated opinions on what makes things work and how.
    Keeping it simple, banks had the unfortunate timing of a substantially more demanding loss reserve requirement (CECL), beginning January 1st, shortly before Covid destroyed reasonable economic expectations. Banks made huge CECL adjustments/increases in the 2nd and 3rd quarters. This explains...

    https://www2.deloitte.com/us/en/page...-insights.html

    The ~ 95% vaccines were substantially more effective than anticipated and, IMO, 3rd quarter 2021 is now a realistic expectation for herd immunity. This will cause a very substantial reduction in CECL reserve requirements. I also expect substantial bank dividend increases and share buybacks beginning in the 2nd half of 2021.

  8. #1308
    Quote Originally Posted by Jeffrey View Post
    Keeping it simple, banks had the unfortunate timing of a substantially more demanding loss reserve requirement (CECL), beginning January 1st, shortly before Covid destroyed reasonable economic expectations. Banks made huge CECL adjustments/increases in the 2nd and 3rd quarters. This explains...

    https://www2.deloitte.com/us/en/page...-insights.html

    The ~ 95% vaccines were substantially more effective than anticipated and, IMO, 3rd quarter 2021 is now a realistic expectation for herd immunity. This will cause a very substantial reduction in CECL reserve requirements. I also expect substantial bank dividend increases and share buybacks beginning in the 2nd half of 2021.
    Yes, but the issue (almost always) with investing in banks is that it is very hard to know exactly what type of loans (residential mortgage, commercial mortgage, consumer loans, commercial loans, etc) and the quality of those loans (a very smart banker once said: "good loans in good times can become bad loans in bad times") may be in any given bank's loan portfolio (that represent the "assets" of the bank). Even the so-called "bank analysts" that work for Wall Street investment firms and follow the banks very closely often do not have a good grasp on what level of risk might actually be in the bank's loan portfolio (until it is too late - see the 2007 -2009 time period for bank stocks). Given the severe downturn in the Covid economy for many small businesses, commercial landlords, residential mortgages, and other types of loans (we may see a record number of personal and corporate bankruptcies in the next six months), I think there is still a significant risk in many of the bank stocks. We just don't know what sort of loan losses they will experience before the vaccines (hopefully) begin to revive the economy. Personally, I would not have more than 10 or 15% of my overall investment portfolio in bank stocks at this time.

  9. #1309
    Quote Originally Posted by duke79 View Post
    Yes, but the issue (almost always) with investing in banks is that it is very hard to know exactly what type of loans (residential mortgage, commercial mortgage, consumer loans, commercial loans, etc) and the quality of those loans (a very smart banker once said: "good loans in good times can become bad loans in bad times") may be in any given bank's loan portfolio (that represent the "assets" of the bank). Even the so-called "bank analysts" that work for Wall Street investment firms and follow the banks very closely often do not have a good grasp on what level of risk might actually be in the bank's loan portfolio (until it is too late - see the 2007 -2009 time period for bank stocks). Given the severe downturn in the Covid economy for many small businesses, commercial landlords, residential mortgages, and other types of loans (we may see a record number of personal and corporate bankruptcies in the next six months), I think there is still a significant risk in many of the bank stocks. We just don't know what sort of loan losses they will experience before the vaccines (hopefully) begin to revive the economy. Personally, I would not have more than 10 or 15% of my overall investment portfolio in bank stocks at this time.
    I agree, an investor cannot review the individual loans, in a bank’s portfolio, to determine overall credit risk. OTOH, it’s not hard to learn the type and breakdown of loans a bank is holding.

    There’s definitely significant risk in all bank stocks! However, there’s also significant potential return. You expressed similar, very appropriate, risk concerns in April. CFG and CMA have posted solid returns since...

    https://forums.dukebasketballreport...07#post1249007

    Every trade requires a difference of opinions and I’m due (mean regression) for a big miss! However, I still think C will hit 70 in the next 12 months.

  10. #1310
    To the best of my knowledge, Iím a stranger to everyone here. I hope nobody wagers serious money on my predictions!

    I recall in either late Ď08 or early Ď09, the greatest investor of my lifetime (Warren Buffett) said he would have invested 100% of Berkshireís portfolio in WFC if he didnít believe it would have caused Charlie Munger a massive heart attack. Warrenís 100% WFC idea would have been a horrible mistake!

    Upon reflection, I probably should not post specific stock recommendations. Iíll get back to more macro level posting.

  11. #1311
    Join Date
    Apr 2011
    Location
    Winston’Salem
    30K. SMDH. Not that Iím complaining...
    "Amazing what a minute can do."

  12. #1312
    Join Date
    Feb 2007
    Location
    Greenville, SC
    Quote Originally Posted by Tripping William View Post
    30K. SMDH. Not that Iím complaining...
    They had a story on NPR this morning about the this. The person they were interviewing said basically, "Where else are you going to invest your money in these days of ultra-low interest rates?"

    I'm not complaining either, but am rather worried that it's a bubble that may pop.

  13. #1313
    Quote Originally Posted by camion View Post
    The person they were interviewing said basically, "Where else are you going to invest your money in these days of ultra-low interest rates?"
    As someone tasked with investing elsewhere, it’s extremely difficult! The current S&P 500 dividend yield is double the 10 year Treasury. How often has that occurred in your lifetime?

  14. #1314
    Quote Originally Posted by Jeffrey View Post
    I recall in either late Ď08 or early Ď09, the greatest investor of my lifetime (Warren Buffett) said he would have invested 100% of Berkshireís portfolio in WFC if he didnít believe it would have caused Charlie Munger a massive heart attack. Warrenís 100% WFC idea would have been a horrible mistake!
    IIRC he has invested substantially in them before and since. It reminds me of his love/hate affair with airlines, he is always tempted by them but also has an understanding with Charlie that he's supposed to to talk him out of it.

    What's strange to me about his WFC investment (historically anyway) is that strong management is a pre-requisite for him. On that count, I have to question his judgment, at least in hindsight.

  15. #1315
    Quote Originally Posted by cspan37421 View Post
    What's strange to me about his WFC investment (historically anyway) is that strong management is a pre-requisite for him. On that count, I have to question his judgment, at least in hindsight.
    Strongly agree, Warren prudently considers strong management critical but has missed repeatedly this century. Recently, he has seldom paid the strong management premiums the Jaime Dimon’s command.

  16. #1316
    Quote Originally Posted by Jeffrey View Post
    I agree, an investor cannot review the individual loans, in a bankís portfolio, to determine overall credit risk. OTOH, itís not hard to learn the type and breakdown of loans a bank is holding.

    Thereís definitely significant risk in all bank stocks! However, thereís also significant potential return. You expressed similar, very appropriate, risk concerns in April. CFG and CMA have posted solid returns since...

    https://forums.dukebasketballreport...07#post1249007

    Every trade requires a difference of opinions and Iím due (mean regression) for a big miss! However, I still think C will hit 70 in the next 12 months.
    Thanks for your thoughts (!) and no doubt, if you play the cycles correctly, you CAN make a LOT of money in bank stocks (just think back to 1990 and 1991 when bank stocks (especially in the Northeast) got massacred after the great recession and many large banks were selling in the low single digits) or in early 2009 after the last bank meltdown. These were truly great, once-in-a-lifetime (really, twice-in-a-lifetime) opportunities to buy banks at incredibly low valuations (of course, some banks did go under) and subsequently make HUGE amounts of money in their stocks. BUT and my point above is that, IMHO, the biggest risk in the bank stocks is that it is impossible (or almost impossible) for an average investor (or even the bank stock analysts) to fully understand the quality of the loan portfolio at these individual banks and then understand what will happen to profits IF the economy slows down or goes into a recession (and loans start to go "bad"). As is true with buying ANY individual stock, you should always tread carefully and do your homework and be prepared to exit the stock IF times change or your analysis turns out to be wrong.

  17. #1317
    Quote Originally Posted by cspan37421 View Post
    IIRC he has invested substantially in them before and since. It reminds me of his love/hate affair with airlines, he is always tempted by them but also has an understanding with Charlie that he's supposed to to talk him out of it.

    What's strange to me about his WFC investment (historically anyway) is that strong management is a pre-requisite for him. On that count, I have to question his judgment, at least in hindsight.
    I know it is heretical to say this in the investment business but I think Warren Buffet is overrated (or maybe "over the hill"). I like to say that the myth of WB is greater than the reality. When you look at the portfolio of stocks that he owns inside Berkshire Hathaway, he has underperformed the S&P 500 over the past 10 or maybe even 15 years.

    And he has made some stupid investments over the course of his career (of course, no one bats 1000% in the investment management business) and certainly his investment in WFC (Wells Fargo Bank) is one of his worst investment decisions. But it just confirms my observation above that it is almost impossible for anyone (including Warren Buffet and his investment analysts) to fully understand what it going on inside these large banks (also true for other large companies; see, e.g., Enron) and should be a cautionary tale for anyone who is investing in individual stocks (despite the short-term success of some "Robinhood traders").

  18. #1318
    Quote Originally Posted by duke79 View Post
    Thanks for your thoughts (!) and no doubt, if you play the cycles correctly, you CAN make a LOT of money in bank stocks (just think back to 1990 and 1991 when bank stocks (especially in the Northeast) got massacred after the great recession and many large banks were selling in the low single digits) or in early 2009 after the last bank meltdown. These were truly great, once-in-a-lifetime (really, twice-in-a-lifetime) opportunities to buy banks at incredibly low valuations (of course, some banks did go under) and subsequently make HUGE amounts of money in their stocks. BUT and my point above is that, IMHO, the biggest risk in the bank stocks is that it is impossible (or almost impossible) for an average investor (or even the bank stock analysts) to fully understand the quality of the loan portfolio at these individual banks and then understand what will happen to profits IF the economy slows down or goes into a recession (and loans start to go "bad"). As is true with buying ANY individual stock, you should always tread carefully and do your homework and be prepared to exit the stock IF times change or your analysis turns out to be wrong.
    Thank you, very much, for the conversation. Itís critical, and highly educational, to hear and understand opposing views!

    Absolutely, I recall buying Bank of Boston (IIRC, ~ $8) in the early 90ís. Unfortunately, my total stock portfolio was ~ $60k then, so I probably only bought 500 shares.

    I think the main difference, in our current bank opinion, is you appear to believe CECL will not substantially improve loss reserve accuracies and disclosures. Correct?

  19. #1319

  20. #1320
    On the more speculative side of things, did anyone get some AirBnB or DoorDash at the IPO price?

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