ERICOPOLY

How does he figure cash increases 6x in a Depression?

I took the family to Disneyland. A good day, but wish the stock was much higher. The market of the past few years makes me feel like David Byrne at the beginning of that Talking Heads video for Once In a Lifetime: http://www.youtube.com/watch?v=I1wg1DNHbNU

The word "tangible" was omitted. .7x is correct.

I signed a lease on a house in Montecito yesterday. No more winter for me!

High fat foods causing brain damage to hypothalamus in rodents: http://thechart.blogs.cnn.com/2012/01/06/study-high-fat-foods-cause-brain-scarring/ Schwartz and his team found evidence of inflammation, or neuron injury, in rats and mice only three days after the rodents consumed foods high in fat. Although the effect subsided temporarily, a long-term diet of unhealthy fare left permanent damage. Schwartz believes the brain's attempt to heal the injured neurons results in gliosis, a process that leads to scarring in the central nervous system. The researchers also found a 25% reduction in the number of POMC cells in the rodents on a high-fat diet. POMC cells play a critical role in the body's fat control system, helping regulate appetite and prevent excess weight gain. Schwartz’s team analyzed human MRIs during their study, discovering higher levels of gliosis in obese patients. The findings suggest the structural damage occurring in the rodents' brains may be duplicated in humans.

Ericopoly,... you got me somehow confused,... ::) Have you really bought the deep in the money $10 strike 2014 AIG leaps,... don't they trade around $20-21 something,... ??? ... why leaps with such a low strike price? Yes I bought the $10 strike 2014 AIG calls. I paid $20.20, $20.30, and $20.40. The low strike price is to do with the fact that I can't stomach more leverage given the other things that I own. It's still 1.5x leverage. I'm not exactly wearing the Granny panties here.

Wow. Those FFH leaps really paid off if you can afford a 100,000,000.00 house. LOL Well, ubuy2wron, I think Ericopoly means probably Russian billionaire Yuri Milner, the founder of Digital Sky Technologies and an investor in Facebook, Groupon. http://www.google.com/#sclient=tablet-gws&hl=en&safe=off&tbo=d&q=100+million+dollar+house+los+altos&oq=los+altos+house+100& I would still have trouble buying a 1950s ranch home in Los Altos Hills. They pretty much run for $2m+, and often get torn down to build tasteless mansions.

After doing all the reading/research I have, I'm having trouble with the bear case too. One thing I would add to your list--there's also the stigma associated with it, plus in the past it was very hard to analyze with all the preferred shares/SPVs/partial stakes. At this point though, it seems pretty straightforward and everything is on track--2.5 core business and they just have to do some sales/IPOs, buy back shares and operate normally. Any low ROE arguments are mitigated by the share price being at nearly 1/2 of book. Even a 7% ROE becomes 14% BV growth when entirely plowed back into shares. And there's heaps of cash going into the share repurchases soon. I sit pretty with the $10 calls because if the low ROE argument persists, and the share discount mitigation is long lasting, I worry not about losing at expiration (low strike).

I bought $10 strike 2014. I paid a $1 premium which is like borrowing $10 per share at 5% interest rate paid in full upfront and giving up any dividends (looks like all cash is coming back via buybacks). 1.5x leverage.

At today's low of $4.50 the BAC class A warrants are now down 18.2% from their recent peak of $5.50.

I finally got back into AIG warrants and calls this morning. Thanks to everyone for keeping the information flowing on latest developments on repurchase front.

Well, he really doesn't have much income from which to purchase shares on the open market. And he already has a lot of upside incentive from the stock-based compensation plan: From the 2012 Proxy: O No annual cash incentive for 2011. Similarly, Mr. Moynihan did not receive any annual cash incentive award for performance years 2009 or 2010. O Total salary and incentive compensation for 2011 of $7 million. Over 85% of Mr. Moynihan’s total compensation for 2011 is in the form of equity-linked awards. O The majority of Mr. Moynihan’s variable incentive compensation was awarded in the form of performance contingent restricted stock units tied to our future achievement of specific performance goals based on our return on assets.

Live Bainbridge Island, WA (way too grey, wet and cold... going back to Cali) From Los Altos Hills, CA (which didn't experience any kind of house price decline -- are you listening Broxburnboy?) For Broxburnboy: In 2011, a house in Los Altos Hills sold for an estimated $100 million. http://en.wikipedia.org/wiki/Los_Altos_Hills,_California

"and all have been bought in the range between $42-52" Slight correction: Those were all SALES between $42 and $52.

On the bright side of things I think Bernie Ebbers had in excess of 100% of his net worth in WCOM -- he had to hide the reality of things to support the stock in order to avoid getting a margin call. Sometimes having too much ownership is very bad!

10,000 shares is trivial. Martha Stewart league. Moynihan said last year it was an insider information issue.

I don't see how he could be allowed to buy BAC stock. Isn't there significant insider hurdles here what with the lawsuits and all? For example, he knows the size of the legal reserve whereas the rest of us don't.

Seattle peaked in July 2007. Peaked in July 2007 and prices fell slightly, but did not fall like most parts of the U.S. until mid-2009. Cheers! Too many ex-pats like myself are going back to Cali.

#11 globally: http://vlab.stern.nyu.edu/analysis/RISK.WORLDFIN-MR.GMES

Seattle peaked in July 2007.

Some of the higher priced areas (such as La Canada-Flintridge) around LA have no inventory anymore. Just a few months ago there was several homes in the $1.2m - $1.8m range and they're all gone now. Our realtor down there says the credit is beginning to loosen up on these larger mortgages and the inventory is just gone.

They have an image problem. Every time they have news leak about a pilot program to raise fees, people get outraged. Even when it's just following the lead of peers (like copying Wells Fargo's fees for new checking accounts). So this could perhaps be a PR stunt: have a warm & fuzzy feel good test pilot program that people can cheer BofA for.

Hardincap, there is your answer. Bac has 12 per share of TBV and over 20 BV, once goodwill can be assumed ok. Rather than waiting for BAC to buy back shares, you can buy as many as you want at a price cheaper than BAC will ever get. you're missing my point. I WANT bac to buy back shares at these valuations alongside me. We are not "missing" your point at all as many of us were through the Fairfax journey. We just don't agree with you that it is the priority right now. I am 100% in agreement with hardnicap. BAC's capital and liquidity ratios are higher than they have been at any point in their history. If BAC were to buy back $5 billion of stock this year or 5% of the outstanding shares, it would be the gift that would keep giving for decades in the future. Even with a buy back of this amount they would still continue to generate capital throughout the year. Someone mentioned that the stock would fall if they announced a buyback because of fears of capital. I think that would be great! If the stock was cut in half and they were repurchasing $5 billion, they would retire nearly 10% of the shares outstanding. they can't buy stock because they are forbidden. Why? Because the fed does not believe they have enough capital to do And survive a depression like economic scenario. Yes wouldn't it be great, in a perfect world, that bac could buy stock back. But they can't. It's impossible right now. BAC needs to build confidence. There will be plenty of time for bac to buy back stock. It's not going to suddenly become ZYNGA overnight. They didn't request a buyback this year. They could've requested to buy back shares and would have remained above the stress test minimum. JPM will go below BAC's levels after their dividend and buyback. I am all for having a Fortress balance sheet and keeping a margin of safety. I just think they are already at that point and should take advantage of the current share price to buy a few shares in. Sheila Blair commented this week that she wouldn't have approved JPM's capital plans because it leaves them with a 4% leverage ratio at the end of 2013 under the stressed scenario.

Hardincap, there is your answer. Bac has 12 per share of TBV and over 20 BV, once goodwill can be assumed ok. Rather than waiting for BAC to buy back shares, you can buy as many as you want at a price cheaper than BAC will ever get. you're missing my point. I WANT bac to buy back shares at these valuations alongside me. We are not "missing" your point at all as many of us were through the Fairfax journey. We just don't agree with you that it is the priority right now. I am 100% in agreement with hardnicap. BAC's capital and liquidity ratios are higher than they have been at any point in their history. If BAC were to buy back $5 billion of stock this year or 5% of the outstanding shares, it would be the gift that would keep giving for decades in the future. Even with a buy back of this amount they would still continue to generate capital throughout the year. Someone mentioned that the stock would fall if they announced a buyback because of fears of capital. I think that would be great! If the stock was cut in half and they were repurchasing $5 billion, they would retire nearly 10% of the shares outstanding. 90 days ago they were SELLING shares. Think about it. Yes. Conversion of debt to equity. Very expensive to shareholders selling those shares to retire debt. VERY expensive. They sold common shares... why? Because they have SO MUCH excess cash to return to shareholders. HEAPS OF IT. So much so, that they had to SELL SHARES at like $6 per share. Because they are swimming in so much excess cash. And yet you want them to return the excess to shareholders... It's not in the realm of reality.

Hardincap, there is your answer. Bac has 12 per share of TBV and over 20 BV, once goodwill can be assumed ok. Rather than waiting for BAC to buy back shares, you can buy as many as you want at a price cheaper than BAC will ever get. you're missing my point. I WANT bac to buy back shares at these valuations alongside me. We are not "missing" your point at all as many of us were through the Fairfax journey. We just don't agree with you that it is the priority right now. I am 100% in agreement with hardnicap. BAC's capital and liquidity ratios are higher than they have been at any point in their history. If BAC were to buy back $5 billion of stock this year or 5% of the outstanding shares, it would be the gift that would keep giving for decades in the future. Even with a buy back of this amount they would still continue to generate capital throughout the year. Someone mentioned that the stock would fall if they announced a buyback because of fears of capital. I think that would be great! If the stock was cut in half and they were repurchasing $5 billion, they would retire nearly 10% of the shares outstanding. 90 days ago they were SELLING shares. Think about it.