dada dfad

[lazycatcat]

fd dfadf

 

[vivina99]

open a seminar in mandarin, please.

 

[gomu]

welcome inspiring stories!

 

[laojianke]

I like to join.

 

[bpzm]

励志故事很好，英文实在不好看

 

[newer]

Nice effort.

As Soros said, all American banks have been bankrupt theoretically. If I choose one from the three banks, I will prefer WFC for a long-term investment because Baffet bought its stocks. He could be wrong. But he might help if WFC goes wrong. The other two might not be that lucky if something worse happens.

This forum is awfully quiet since Jia Jing You Zhi disappears.

To cheer things up, I will post a comparison of JPM, BAC and WFC in the next few days. Hope this can stoke some interesting in companies.

I would prefer to talk about another regional bank like Bank of Hawaii but haven't found a match yet.

 

[sera]

Could you please comment on MBI? Thanks!

 

[blueray]

what's your comment about Visa(V)? Thanks in advance.

 

[blueray]

Well commented. Thanks. I think it could be a good bet since Visa has more international presence than other cards. I will pay attention to it.

Visa is surely a company with a good business model. From investment perspective, the question is how fast it can grow and how long its competitive edge can last.

Visa is currently trading at 10 times projected 2010 revenue and 30 times projected earnings, according to Value Line data. Its net profit margin is at 35%, which is very high. Coke is at around 30% and the only company that earns higher percentage is x.to, as far as I know.

People like Visa because it supposedly has no direct exposure to credit issue yet can collect a small fee each time people spend. Plus, its model is easier for globalization. This is in contrast to American Express, which directly funds the credit spending.

One thing that needs thorough understanding about Visa (and Master) is the inter merchant fee it charges. This is the largest source of its income, if I remember correctly. One needs to be assured that this fee structure is sustainable. This is the area that had some legal struggles before and I don't know the situation going forward. You can get a 10-K of Visa and get some insight.

The other thing is average Visa holder spends about $2000 per year whereas average Amex holder spends about $10,000 per year. This allows Amex to provide far more attractive reward and thus keeps its competitive edge.

Business model of Visa, Master and American Express is probably not hard to understand. Going through 10-K of each company provides a good idea. They are all good companies. The question is what price you are willing to pay to buy their shares....

 

[newer]

Looks like you hit something.
http://www.financialpost.com/news-sectors/story.html?id=2446494

Central Pacific Financials (CPF) is one of the second-tier bank on Hawaii island with total asset around $5 B. Here is its number as of Q3, 2009:

1. Tangible common equity: $161 M
2. Pre-tax and pre-provisioning earnings per quarter: $22 M

3. Non-performing assets: $418 M
4. Allowance for loan losses: ~$220 M

In other words, the company only has a cushion of ~$400 M total next quarter to absorb loan losses.

Its non-performing commercial loan stands at close to 10% of about $2 B commercial loans in Q3 ! Not only its loans in California has high default ratio but also loans in Hawaii.

In comparison, Bank of Hawaii's non performing asset is at around 0.5%, yet its credit allowance is at 1.4% of total loans and the pre-tax and pre-provision profit (a measure of a bank's earning power and ability to absorb credit losses) is at 5.5% of total loans.

Two banks on the same island yet totally different performance during this crisis.

As mentioned before, the FDIC insurance creates a type of paradox for banking industry. When time is good, people can leverage capital 10 to 1 and make a killing. If one is willing to lend money freely, he has no problem finding customers. It is very difficult for an outside investor to tell if the bank is swimming naked or not.

Now the tide is gone and the truth is revealed.

There are surely good banks like Bank of Hawaii in other parts of US and bad ones as well. Unless economy works out a miracle, many regional banks probably will fail.

The failures will provide a feast frenzy for good banks and enhance the earning power of latter in the years to come.

 

[newer]

Good thinking. Hopefully you have been rewarded dearly.

Thanks for the link. I was a bit disappointed after Forbes listed Bank of Hawaii as the best regional bank in US. I was searching for better ones.

I selected Hawaii for analysis due to a trip to Niagara Fall. You know you can ride ships to the bottom of the fall and the experience is very unique. It stroke me that the business of running these ships should be very good. You don't need much capital investment and can increase charges a bit higher than inflation. The experience is unique and you don't even have to do ad in order to attract customers.

Plus, it is a monopoly.

This led me to do a study on banks on Hawaii. Regional banks are heavily affected by local economy. The best way to own a piece of Hawaii is probably to own a good regional bank there.

It is not hard to figure out a company is good or not by reading 10-K reports. With proper investment principles, the ones based on Graham and Buffett, studying companies starting from 10-K reports shall be very interesting and rewarding ...

 

[newer]

When Graham was to shut down his fund, he bought a lot of AT&T.

Is this one of the reasons why Buffet avoids tech stocks.

 

[newer]

Any thoughts about CG.TO?

 

[Green158]

Any thoughts about CG.TO?

Could be two reason:
1. Market does not like uncertaint....
2. Big MM uses bad news to wash out weak hand ..

Centerra Gold Inc. said that its business continues to operate normally in the Kyrgyz Republic despite an outbreak of violence and unrest in the Central Asian country. "From the standpoint of our mine, it is not directly impacting us. We have not seen any issues in moving people and supplies around," John Pearson, vice-president of investor relations at Toronto-based Centerra, said in an interview. "Obviously, we're monitoring the situation carefully and have a heightened awareness of the safety of our employees." Centerra operates the Kumtor gold mine in the country, which was formerly a part of the Soviet Union. The company's shares dropped 11.5% yesterday to $11.99 after protesters attacked government buildings and claimed that they forced the incumbent government to resign

 

[newer]

Thanks for the replies of you two guys above. True that this one may be sort of speculative.