NakedPuts Wrote: ------------------------------------------------------- > sid3699 Wrote: > -------------------------------------------------- > ----- > > yeah baby…LEH is up 8% already…BOOOM > > TIME…BOOOM TIMEEEEEEEEE… > > > > f**k yall short traders > > Save it for the Yahoo Message boards. If you’ve > got a legitimate rebuttal to anything Einhorn has > said about LEH’s fundamental business, I’d love to > hear it. > Look I dont disagree with some things Einhorn says, but for a guy who is short LEH since summer 2007, he sure will and does cherry pick the information that suits his personal interests. He is clearing playing on the fear factor. So I don’t hold him in high regard. Period. Agreed LEH has bad stuff on its books, but what about the increase in its liquidity situation? Its easy to say LEH is the next BSC, but if you look closely there are stark differences. LEH’s operating model is quite sound. The 2Q08 write downs overshadowed the operational results. Its equities division (for example) performance was better than 2Q07 and 1Q08. If 3Q08 has similar writedowns then I"ll start worrying about the solvency issue. Until then am long LEH. To hell with all those who are just shorting the stock to make quick money by playing on market fear.
Let me get this straight, you are criticizing Einhorn for being short for only one year and accuse him of just wanting to make quick money, but then you are excited about being long because it is up for one day? And this is your definition of playing on market’s fear? http://www.grantspub.com/UserFiles/File/Einhorn_Grants_Conference_04-08-2008.pdf
We all understand sid3699 and Einhorn are just trying to make a buck. Don’t need to be too harsh on them. 
Unfortunately I can’t make the quick buck on LEH cause am an employee of LEH and have restrictions:) Joking aside, like I said, there is bad stuff on the books but the picture painted by Einhorn is way exaggerated. Not saying this cause am an employee, but one has to go through the entire financials to come to a conclusion of solvency and going concern. Since all you guys are on Einhorn’s bandwagon, how many of you actually have gone through the financials and listened to the 2Q08 call? Am excited to see the stock go up cause LEH is not a sinking ship (yet) as it has been made to look like one. To reiterate, the operating model is quite sound. As an insider, and having little more insight, unless 3Q08 results are similar to 2Q08 am not joining the “fear market” on LEH-and I speak for quite a few employees I know at LEH.
NakedPuts Wrote: ------------------------------------------------------- > http://seekingalpha.com/article/81205-david-einhor > n-lehman-brothers-another-nyt-hatchet-job the guy who wrote this article has a small disclosure at the bottom… Umm… that he is short LEH and knows Einhorn very well. Yes, I find this article “highly” insightful.
Lets see: On one side, I’ve got 2 very successful investors, who have a history of delivery excellent returns, often with a focus on financial stocks. They can invest their money just about any place they please. They’ve both chosen LEH, and have explicitly outlined why they’ve done so. On the other hand, I’ve got some guy who works at LEH and is therefore among the group least likely to be rational and objective re: LEH’s prospects. This person is posting on AF, so I’m going to assume they’re not on the Executive Committee, and therefore unlikely to have a significant amount of material inside information. Sorry, but unless your job at LEH is to examine financial stocks, I’m going to go with the pros on this one.
Einhorn’s points about the $6.5bn of “CDOs” and the L3 change from call to 10-Q are flat out wrong. His core thesis on LEH, however, is pretty much correct. My theory is Einhorn knows this, but also knows his core thesis (large illiquid risk position on the balance sheet, severely impaired earnings power) isn’t easily conveyed via soundbytes on CNBC. So he manufactured these issues because they play well in the media. LEH’s 2Q08 had pretty much nothing to do with the big issues Einhorn has been touting (but played out exactly as I imagine his core thesis would have predicted). The guy appears to be really smart, so I can only assume he knows the points he keeps harping on are red herrings.
Big Nodge Wrote: ------------------------------------------------------- > Einhorn’s points about the $6.5bn of “CDOs” and > the L3 change from call to 10-Q are flat out > wrong. His core thesis on LEH, however, is pretty > much correct. My theory is Einhorn knows this, but > also knows his core thesis (large illiquid risk > position on the balance sheet, severely impaired > earnings power) isn’t easily conveyed via > soundbytes on CNBC. So he manufactured these > issues because they play well in the media. LEH’s > 2Q08 had pretty much nothing to do with the big > issues Einhorn has been touting (but played out > exactly as I imagine his core thesis would have > predicted). > > The guy appears to be really smart, so I can only > assume he knows the points he keeps harping on are > red herrings. http://sketchedout.files.wordpress.com/2008/02/red-herring_color.jpg
NakedPuts Wrote: ------------------------------------------------------- > Lets see: On one side, I’ve got 2 very successful > investors, who have a history of delivery > excellent returns, often with a focus on financial > stocks. They can invest their money just about > any place they please. They’ve both chosen LEH, > and have explicitly outlined why they’ve done so. > > > On the other hand, I’ve got some guy who works at > LEH and is therefore among the group least likely > to be rational and objective re: LEH’s prospects. > This person is posting on AF, so I’m going to > assume they’re not on the Executive Committee, and > therefore unlikely to have a significant amount of > material inside information. Sorry, but unless > your job at LEH is to examine financial stocks, > I’m going to go with the pros on this one. Firstly, Greed is the only thing that has history on Wall Street. You are telling me these investors have the shareholders interest at heart? Secondly, am very objective on LEH as my only holding in LEH is in my highly diversified 401(k) and I have a very very long time to retire. Finally, am an equity research analyst in the Financial Institutions Group.
I think they have their own investors interests at heart. They owe no duty to shareholders of LEH. Sorry, you’ll never convince me you can remove yourself from your job well enough to make a decision. No one can really be objective about where they work, myself included. I’m sure a bunch of old BSC employees said the same thing 6 months ago. Finally, I don’t know where in FIG you work, but given your firm’s track record on MS and MER, I’m not moved tremendously on your opinion of LEH.
Not trying to convince you my friend, but there is more to the story than what is apparent. I too am not happy with the disclosure LEH has, but I know that the operating model is much more sound than BSC or what has been displayed in the media. BSC had major liquidity issues. LEH has enough liquidity to satisfy all the creditors if they were to press the panic button all at the same time. Like I said, If 3Q08 is as bad as 2Q08, I"ll change my opinion.
Well, best of luck, I certainly hope the firm does well. Would help my XLF calls.
Big Nodge Wrote: ------------------------------------------------------- > Einhorn’s points about the $6.5bn of “CDOs” and > the L3 change from call to 10-Q are flat out > wrong. His core thesis on LEH, however, is pretty > much correct. My theory is Einhorn knows this, but > also knows his core thesis (large illiquid risk > position on the balance sheet, severely impaired > earnings power) isn’t easily conveyed via > soundbytes on CNBC. So he manufactured these > issues because they play well in the media. LEH’s > 2Q08 had pretty much nothing to do with the big > issues Einhorn has been touting (but played out > exactly as I imagine his core thesis would have > predicted). > > The guy appears to be really smart, so I can only > assume he knows the points he keeps harping on are > red herrings. Could you elaborate on which of David’s points you think are red herrings and why? (Note: I already read your post about the Level 3 - Level 2 transfer, although I haven’t verified the accuracy of this yet.) Specifically, do you think management has adequately explained the write-up on the power plant in India with the supposed pre-IPO financing round? Do you agree with only a 3% write-down of commercial mortgages in light of SunCal? What about the 3% write-down on Level 3 mortgages or 7% on non-Level 3 mortgages? How about the large write-up of corporate equities despite Archstone-Smith? I think the reduced transparency and questionable valuations in this MTM environment lead him to conclude that management is manipulating a la Allied. Add to that his “core thesis” as you put it, i.e. being over-leveraged with large illiquid assets.
honestly voba i probably shouldn’t as i cover LEH professionaly. i have the tendency to get dragged into discussions of my names as it is hard not to chime in. i just remeber regretting some info i have posted in the past. i do have thoughts on the issue that i could share via email if you’re interested. i know it seems like a cop out but serously, hit me at bignodge2004 at yahoo dot com if you want to follow up, i’ll try to check it this weekend.
DICK FULD NEEDS TO GO. They’re crooks and they lied to investors: 1Q Results - Dick Fuld says “The worst is behind us” 1Q Conference Call - Erin Callan says “Our funding needs for the year have been met” GO TO HELL.
Regarding the soundness of LEH’s operating model, how would you respond to concerns that the opening of the discount window implies that the industry economics are fundamentally changed => we’ll see an overall and permanent deleveraging => lower ROE?
Callan is hot. Wherever she’s going is where I want to be. Working directly underneath her.
I wonder whats going to happen this morning.
bump - it’s just fun to look back sometimes