Parsad

I think that's about where most on this board that hold BAC figured they would be. But keep it even at $25B, which most analysts think they can achieve within two years once the cost-cutting is done and more legacy issues are settled, and what do you get? About $2.30 per share...ten times multiple...$23 stock! I personally think they can do better than that...conservatively...much closer to the $40B as Eric states. But analysts won't get it till they've done it, just like the rest of the industry is wondering how the heck did they get to 9% Tier 1 Common Capital in a year and have to hold less capital than JPM. The culture is changing under Moynihan, and BAC is going back to it's pure banking roots. Cheers!

“The investment community has had one collective ‘huh?’,” said Mike Mayo, analyst at CLSA. “It’s good news that the uncertainty about the final capital levels has been lifted but the issue is there is no clear road map on how the regulators are operating . . . and there’s no better example of that than with Bank of America.” The investment community always gets it wrong anyway. Remember two years ago how Jamie Dimon and JPM could do no wrong...then the losses and obvious internal control issues? How Vikram had saved Citi...but the board kicked his butt from here to eternity! They don't get it right until it is blatantly obvious. Cheers!

What's your time horizon for mid-term? I think if you trust the management and culture, bank is a decent business to own in the long term (see Buffet's investment with WFC). I agree. What is the likelihood of another U.S. banking crisis in the next 15 years? At best, as likely as it was after the "Savings and Loan" scandals, but this was far worse as far as the large financial institutions were concerned and the long-term effect on the economy. Unlikely you will see another banking crisis in the next 15-20 years. Banks when run correctly...simple deposits, lending and investments with conservative leverage (8-9 times asset to equity)...is a terrific business. Cheers!

You are also implicitly assuming that when a company declares and pays a dividend, the stock price does not decrease by the dividend amount. This may or may not be the case even though the stock in your example is trading below book. Hi Sreenr, the stock price may fluctuate with any dividend paid, but it would still be accretive to the actual underlying book, earnings and even liquidity if the stock is bought under tangible book. Eventually over time, the stock price will trade closer to the underlying fundamentals. Cheers!

Wow, that looks great and very funny! I think it's going to do very well. Cheers!

The Munger Bust went for $7,600 and the Lunch With Mohnish went for $18,100. Way to go Mohnish...great for Dakshana! Cheers!

To be fair those deals are a lot less scarce than distressed businesses. That's where management comes into play: when to hold cash and wait versus when to invest it in less-than-ideal ventures. I think a great acquisition would be Chou Associates! ;D Prem should buy out Francis and bring him back into the Fairfax fold. We all know that the money management business is spectacular if done right, and bringing Francis back in means that Francis can just grow the money management business for Fairfax. You still have the Hamblin-Watsa team focusing on investments for Fairfax. This way, Francis' business will never have to worry about succession for his family, and you bring another younger, quality, ethical manager back into Fairfax to take over as the Hamblin-Watsa principals retire over time...if they so choose! Because other than Peter Furlan and Paul Ianni, I don't know of any other young analysts at Fairfax who could just step up and fill some shoes. I'm sure there are a couple, but I don't know who they are. Wayne Cadawallader is running his own fund, so they probably need to find a Justin Wheeler type or people they already know. Paul Rivett is quite young and he's in good shape, and if you combine that with Francis, and add another person...Tim McElvaine comes to mind...I think you've got a good team for another generation. Anyway, I thought I would throw that out there just to stir up some trouble for head office! ;D Cheers!

They settled 3 more litigation cases in the 3rd quarter that they disclosed today. The main big one left is AIG, and I think that will be settled before the end of the year if AIG is reasonable, as well as the MBIA case which should be settled too. But check this out: The lender also said it could have as much as $2.8 billion in legal costs as of Sept. 30 beyond what it has already set aside. That’s a decline from the $4.1 billion estimated three months earlier because of a settlement of a class-action suit tied to the 2009 takeover of Merrill Lynch & Co., said Jerry Dubrowski, a Bank of America spokesman. Meaning they've already saved $1.3B in costs on the litigation they've settled above their provisions. How much do you want to bet that they settle all of their litigation for maybe $1-1.2B above what they've set aside? Cheers! http://www.bloomberg.com/news/2012-11-02/bofa-discloses-three-mortgage-lawsuit-accords-in-third-quarter.html?cmpid=yhoo

They should institute the same rule here. If longs have to report, then shorts should too. Cheers! http://www.cnbc.com/id/49655827

Yeah, it was expensive, but it quieted down the shorts too. So how much was that worth? The $2-3B Buffett makes at the expense of other shareholders...probably was worth it. Remember, we crept just under $5 at one point and the stock had fallen off a cliff. It would not have taken long for it to drift into no-man's land and at that point BAC would have to find someone else to bail them out at probably a far more expensive pricetag. Buffett's investment said "the buck stops here...we've given capital, and we've got a hell of alot more to give if necessary!" Cheers!

Thanks Cofabmd! Just a terrific article on Bill and Kennedy Wilson! Bill has been at our dinner for the last two years. Mary Ricks also came with him at the first dinner he came to. I know plenty of you have looked at and are invested in Bank of Ireland, so I thought I would expand this thread by starting a bit of a discussion. I really like Richie Boucher, CEO of Bank of Ireland and who also was at our dinner last year, and I'm keen on investing in Ireland, but I'm struggling with their business...still a ton of risk. If you look at page 27 of their June 30th financials, they are really, really underfunded on their loan loss portfolio. I mean there is potential for half of their equity to be wiped out easily: http://www.bankofireland.com/fs/doc/publications/investor-relations/interim-report-20121.pdf In my opinion, they need to deleverage a hell of alot faster than the timeline they've given themselves. They probably need to be selling assets left, right and centre like Moynihan was doing at BAC. Please feel free to give me your opinions, because I think this is an intriguing investment, but it's priced based on the amount of risk around it...I'm still not sure it's cheap enough! Cheers!

Bank of America sells off PCL for $1.4B! Tier 1 Common Equity continues to go up. :o Cheers! http://finance.fortune.cnn.com/2012/11/02/boa-sells-pcl-after-2-year-courtship/?source=yahoo_quote

You guys have only about four hours left if you want to get in on either of these! Cheers! http://www.ebay.com/itm/121001990415?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649 http://www.ebay.com/itm/121002008088?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649

When in doubt, if the results aren't going your way...delay the meeting. Maybe I'm being too cynical. Are you being too cynical? What is the track record when it comes to these things at BH? You are not being too cynical...this is just old hat stuff that we've seen too many times. The fact is, that it sadly usually works for him, so there is no reason to stop. Cheers!

With the check being done every year, I would be suprised if they released any excess. Once they hit 9.5% then open up the dam and allow the excess to flow down to the shareholders. Yes, I agree. I think they'll be at or above that by the end of the 4th quarter, and definitely by the end of 1st quarter 2013. They can then distribute the bulk of their cash flow into dividends and share buybacks. Cheers!

Yeah, I'd like to really see how they valued this, and then compare it on an apple-to-apple comparison in terms of Inditex's normalized P/E, cash flows, etc relative to Berkshire's. Cheers! Sure, Inditex has always been expensive (the lowest P/E in the last 5 years was ~15) and right now I'd much rather own BRK. But it is an impressive achievement nonetheless for the son of a railway worker born just before the Spanish Civil War and who had to leave school when he was 14. You'll agree that being the son of a US Congressman and attending Ben Graham's classes at Columbia is a much better starting position. Oh no, I totally agree with you. Phenomenal achievement! I just hate these annual rankings, because often one person's investment is inflated due to stock price relative to earnings or a bubble in their industry, and the valuation is briefly elevated to obscene levels. Cheers!

If you can't find a $20B idea, sometimes you just have to go with forty $500M ideas! ;D Cheers!

I would also prefer if they just kept their capital level at 9%, and not release any of that estimated $7.5B cushion. Just because they tell you that you are ok at 8.5%, doesn't mean you have to listen to them and stay there. Better safe than sorry if they want to change this company for the long-term. The culture should be that we are no longer the weakest bank, but the strongest, and we are here to serve our customers. Simple! Cheers!

Yeah, I'd like to really see how they valued this, and then compare it on an apple-to-apple comparison in terms of Inditex's normalized P/E, cash flows, etc relative to Berkshire's. Cheers!

While there's room to debate whether the restaurants are shitholes or not, it's absolutely clear that the industry is a shit-industry. There are thousands of participants, extremely low barriers to entry and cut-throat competition. These chain restaurants continuously face pressure on their margins from every little immigrant-run eatery that pops up. While there may be room for both the chains and the immigrant restaurants, clearly this is a shitty place to try to make good money. But, I guess that's consistent with FFH's primary business of P&C insurance, which is also a highly competitive (shitty!) industry where there's little potential to build a moat. SJ As far as I know, the top 25% of restaurant chains returned 279% from 2001 to 2011. The median of restaurant chains returned 113%. The S&P500 returned 33%. “The most valuable business in the world are brand royalty businesses that can grow without capital investment” Bill Ackman on the new Burger King franchise business model. Maybe, Imvescor is not the case, but surely there are some fast-food restaurant chains that are valuable businesses! giofranchi Oh for sure! The restaurant business is a great business to buy into if you can find quality chains at distressed prices. Steak'n Shake was an amazing find and turn around. A restaurant chain I would have loved to see Fairfax buy before they sold their underperforming Golden Corral unit was Frisch's. Frisch's has somewhat saturated their market, but they are well known and faithfully busy. You wouldn't be able to expand the franchise significantly but its burger business is a cash cow. They sold the Golden Corral chain for $50M and paid out a $9.50 dividend to shareholders. Someone could have bought this chain at about $18-19 share, did the same thing making back $50M, and then just held on to the the burger business. Nope, no one bought it! Cheers!

hmm..not exactly sure why he'd want this company. I'm sure Buffett and his family have been buying stuff from there for a long time and they know the history of the business. No way of knowing unless we could see some financials. Cheers!

Running out of time, so it's going to be tough, but I still think it's going to break $11-$11.50 before Christmas. Who knows, it may pull an Overstock and shoot up 100% in a couple of months! Cheers!

Yeah, I still don't know what really went down. Larry Pitkowsky and Keith Trauner left because of Fernandez, right? But did Fernandez leave because of a personal riff between him and Bruce? Or was the whole blowup about BB's lack of portfolio "diversification"? I think Fernandez felt the ship was going down, and he wasn't the captain. Either that, or he tripped and fell out of the "Fairholme" boat as it ran aground. ;D Cheers! we don't know what happened. but the stress must have been unbearable on those two. that was the point of maximum pessimism. if you would have bought fairx that day you would be sitting very pretty. I think it was probably Berkowitz's fault partially. You've worked with two analysts for years, and suddenly you go all buddy-buddy with your new brother-in-law, buy him a house and move him in next door, and then expect his temperament to be about the same as your own. The analysts leave, and then buddy realizes he's not cut out for this...bye! Cheers!

Yeah, I would agree with that. I think they are very, very likely to increase the dividend to 5-7 cents a quarter, plus $6-8B buyback authorization at the very least. Cheers!

Or hire Ron Insana. I think Insana Capital Partners is looking for another home after the wipeout four years ago. Cheers!