BTW - I see a pretty big disconnect in BSC down 80% and those other numbers. In particular if BSC is really so hard to value that the market missed by 1000% how much should we trust that JPM got it right or that we didn’t miss by some amount like that on LEH?
Not sure someone else could or would bid on all of BSC. Maybe just maybe Bear could piece out businesses and have the parts equal more than the sum, but not sure that’ll happen. B of A’s prime business is on the block, I want to say it maybe is going to go for a little over $1bn? Bear’s prime business is at least 2-4x as valuable as BofA’s I’d think- it’s far more robust. Granted, lots of client defections, but if JPM can get that platform up and running soonish, this might’ve just been the steal fo the century for them. Time will tell. You wonder how bad earnings will be over the next week or 2 for most of these big banks. Big bath time or give the appearance that all is good and risk future writedowns?
The disconnect is outrageous! Look at the friggin’ 10k. You would never see that in a non-financial. Even enron (which was really a financial stock) didn’t collapse that fast. Lesson: don’t touch the financials. One of the most successful screens for stocks that the AAII tracks has a parameter that automatically excludes financials. No matter how cheap, etc. they don’t make it into this portfolio. The portfolio is one of the most successful that they track. It got me thinking, why not exclude financials in a passive buy’n’hold portfolio? The average ROE on financials is pretty LOW! Who needs them. Financials are “special situation” investments… not buy’n’hold (the same thing I used to say about gold).
$236 million? A-rod should have stepped in.
chrismaths Wrote: ------------------------------------------------------- > GS $115.47…-7.26% Just like to point out the typo here, as I saw this earlier and freaked when I saw 115!
JoeyDVivre Wrote: ------------------------------------------------------- > BTW - I see a pretty big disconnect in BSC down > 80% and those other numbers. In particular if BSC > is really so hard to value that the market missed > by 1000% how much should we trust that JPM got it > right or that we didn’t miss by some amount like > that on LEH? You’re making the assumption that it is now correct and wasn’t before. Obviously the truth is probably in the nice creamy middle.
Who is with me to long BSC @ $4?
CFA_Halifax Wrote: ------------------------------------------------------- > chrismaths Wrote: > -------------------------------------------------- > ----- > > > GS $115.47…-7.26% > > > Just like to point out the typo here, as I saw > this earlier and freaked when I saw 115! Oops! As you might be able to tell - it should have been 145.47, and for some reason, copy & paste is playing tricks at the moment for me!
“To add insult to injury, someone had taped a $2 bill to the revolving glass doors at the 46th and Vanderbilt Avenue entrance – some gallows humor on the bargain-basement $2-a share price JPMorgan Chase (JPM.N) paid for Bear Stearns.” At the Madison Avenue entrance, Ray Schmitz, a Realtor with Coldwell Banker, was betting that with the value of their stock options in tatters, Bear’s employees might soon be looking to trade their luxury homes for something a little easier on the budget.
drs Wrote: ------------------------------------------------------- > “To add insult to injury, someone had taped a $2 > bill to the revolving glass doors at the 46th and > Vanderbilt Avenue entrance – some gallows humor > on the bargain-basement $2-a share price JPMorgan > Chase (JPM.N) paid for Bear Stearns.” > cruel
How did that swing trade on Bear work out for you Halifax? Forgive me, I couldn’t resist!!!
Can you imagine what would’ve happened if you would’ve gone to the wall with BSC… 100% in, as much leverage as possible… You’d be dead & your broker would be hurting, too.
drs Wrote: ------------------------------------------------------- > How did that swing trade on Bear work out for you > Halifax? Forgive me, I couldn’t resist!!! no prob. As I said, I didn’t buy it. I am not a big fan of buying individual securities (stock picking) and prefer to buy ETF’s (asset allocation). This was just a case in which I thought that it was looking undervalued, which given the information we had at the time, it did. There are no good excuses. I have been humbled by it, if not humiliated, and I have learned my lesson.
“no prob. As I said, I didn’t buy it. I am not a big fan of buying individual securities (stock picking) and prefer to buy ETF’s (asset allocation).” Hali, are you in the midst of writing an “investing for dummies” book, why the parenthesis?
NakedPuts Wrote: ------------------------------------------------------- > JoeyDVivre Wrote: > -------------------------------------------------- > ----- > > BTW - I see a pretty big disconnect in BSC down > > 80% and those other numbers. In particular if > BSC > > is really so hard to value that the market > missed > > by 1000% how much should we trust that JPM got > it > > right or that we didn’t miss by some amount > like > > that on LEH? > > You’re making the assumption that it is now > correct and wasn’t before. Obviously the truth is > probably in the nice creamy middle. No I’m not.
So what are you saying, that the market value moved and you find that interesting? I can agree that since a $240M acq created $12B of value at JPM today, there’s a disconnect somewhere.
Turkish Wrote: ------------------------------------------------------- > “no prob. As I said, I didn’t buy it. I am not a > big fan of buying individual securities (stock > picking) and prefer to buy ETF’s (asset > allocation).” > > Hali, are you in the midst of writing an > “investing for dummies” book, why the > parenthesis? No I guess just emphasising various aspects of the selection process I guess.
NakedPuts Wrote: ------------------------------------------------------- > So what are you saying, that the market value > moved and you find that interesting? I can agree > that since a $240M acq created $12B of value at > JPM today, there’s a disconnect somewhere. Why? BSC assets + no liquidity = insolvency ($0) BSC assets + JPM balance sheet + JPM synergies + Fed backstop = $12Bn. Once people stopped believing BSC about the funding issue, they had no business, just liabilities they couldn’t fund from their assets.
If that calculation is right, the stockholders should be feverishly working to reject the deal. The JPM balance sheet is available from lots of other sources and the Fed backstop won’t go away if the shareholders reject the deal (at least that’s how I would play it). JPM synergies, well, I dunno but they aren’t worth 11.75 billion. I’m still offering $3 (although I guess others are now offering $4.75).
The whole thing stinks…this business with the fed making money available to brokerages about 10 minutes after they helped negotiate the sale is pretty odd. I wouldnt be suprised if the shareholders reject the buyout.