ERICOPOLY Posted November 6, 2012 Share Posted November 6, 2012 The A's are rising in price a little bit every day. With your guys reports on them being scarce this is interesting. There was a day last week when the volume was 2,000,000. Today, barely more than 10% of that with a rising price on a day when the stock was down quite a bit. Nearly two weeks ago when I was getting filled at 3.65 I was buying as much as 100,000 warrants at a time without moving the price, getting filled in 10 seconds! It may have been Paulsen selling them to you because of redemptions! ;D You may be catching up to him after all. Cheers! There are 85,000 people worldwide with more than $50 million. http://www.statista.com/statistics/204095/distribution-of-ultra-high-net-worth-individuals-for-selected-countries/ I'm working on that list, and when I get there I'm out of the game for the most part. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 6, 2012 Share Posted November 6, 2012 This webcast from Nov 2nd is pretty good: http://investor.bankofamerica.com/phoenix.zhtml?p=irol-eventDetails&c=71595&eventID=4859159 Bruce Thompson presenting at BancAnalysts Association of Boston Conference. Once again he reiterates that they are going from 12b in expenses all the way down to 2b at Legacy Assets & Servicing. Says that although all the work will be done by end of 2014, it might take yet another 6 months for the last of the elevated expenses to settle down. So by mid-2015 all is calm. Link to comment Share on other sites More sharing options...
Mephistopheles Posted November 6, 2012 Share Posted November 6, 2012 Your example works out in favor of buybacks because of the implicit assumption that the share price won't rise in concert with a dwindling share count. May or may not be a realistic assumption. 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. I don't have any official data on what generally happens, but from what I see, companies buy back tons of stock at cheap prices and often the price goes nowhere (good example - MSFT). On the other hand, sometimes companies announce dividends and the stock shoots up for numerous reasons such as being able to be bought by dividend funds, etc. Link to comment Share on other sites More sharing options...
Mephistopheles Posted November 6, 2012 Share Posted November 6, 2012 I think the point was that the example needs to be adjusted for the lower stock price when the stock does ex-dividend. Arbitrage arguments require that the price adjusts when it goes ex-dividend. To fix the example from Mesiphistopheles: Scenario A: Total dividends: $100,000 Dividends/share = $100,000/100,000 = $1 New equity base = $2 million - $100,000 = $1.9 million New BVPS = $1.9 million / 100,000 = $19 For 100 shares, that's $100 in dividends. * Stock goes ex-dividend => new stock price is $10 - $1=$9 * $100/$9 = 11.11 more shares you can buy Total # of shares now owned = 111.111 % of company owned = 111.11/100,000 = 0.11111% @ BV, your total investment would be worth $19 x 111.11 = $2,111.11 Scenario B: Total buybacks: $100,000 Shares bought back = $100,000/$10 = 10,000 shares New shares outstanding = 100,000 - 10,000 = 90,000 New equity base = $2 million - $100,000 = $1.9 million New BVPS = $1.9 million / 90,000 = $21.11 % of company owned = 100/90,000 = 0.11111% @ BV, your total investment would be worth $21.11 x 100 = $2,111.11 Therefore they are the same in the absence of taxes and transaction costs. Good point, I stand corrected :) Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 6, 2012 Share Posted November 6, 2012 And in that webcast Bruce Thompson comments that LAS' 60+ days delinquent first mortgages will fall by 300,000 per annum over next two years from today's level of 936,000 to a normalized level of 250,000 to 300,000 by FYE 2014. Twelve months ago the level was 1,226,000 so that 300,000 per annum reduction that Bruce talks about is consistent with the pace of reduction experienced over the past year. I take it that newly delinquent mortgages are popping out of the woodwork at a normalized pace today in 2012, so this is merely getting the existing backlog of 600,000 excess worked through. Link to comment Share on other sites More sharing options...
MYDemaray Posted November 6, 2012 Share Posted November 6, 2012 I'm working on that list, and when I get there I'm out of the game for the most part. That's a shame, I think that's when it starts to get interesting... Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 6, 2012 Share Posted November 6, 2012 I'm working on that list, and when I get there I'm out of the game for the most part. That's a shame, I think that's when it starts to get interesting... Well I don't want to be famous. I want the money, but not the fame. So while it would be interesting to be a anonymous billionaire, I can do all the same things with $50 million and $1.5m annual income from blue chips. NetJets etc... Do I want to be a famous rich guy and be on TV all the time like Buffett? Not really, but I do like Becky Quick an awful lot, and Poppy. Link to comment Share on other sites More sharing options...
stahleyp Posted November 6, 2012 Share Posted November 6, 2012 Eric, I know you are okay with volatility. You once stated how you've been down 50% or so (on the BAC trade, I believe). Is your wife okay with that too? Link to comment Share on other sites More sharing options...
ECCO Posted November 6, 2012 Share Posted November 6, 2012 Eric, I know you are okay with volatility. You once stated how you've been down 50% or so (on the BAC trade, I believe). Is your wife okay with that too? Lol, I guess like other things its better to keep some things for yourself and not telling your wife...but I am waiting for Eric's point of view on that...lol Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 6, 2012 Share Posted November 6, 2012 Eric, I know you are okay with volatility. You once stated how you've been down 50% or so (on the BAC trade, I believe). Is your wife okay with that too? Lol, I guess like other things its better to keep some things for yourself and not telling your wife...but I am waiting for Eric's point of view on that...lol She knew about it, she did get annoyed because it made me grumpy. However, she likes the new digs in California and that's only made possible by my Fitty Cent Dollah' Git Rich or Die Try'n personal unregistered hedge fund. Link to comment Share on other sites More sharing options...
Kraven Posted November 6, 2012 Share Posted November 6, 2012 Eric, I know you are okay with volatility. You once stated how you've been down 50% or so (on the BAC trade, I believe). Is your wife okay with that too? Lol, I guess like other things its better to keep some things for yourself and not telling your wife...but I am waiting for Eric's point of view on that...lol She knew about it, she did get annoyed because it made me grumpy. However, she likes the new digs in California and that's only made possible by my Fitty Cent Dollah' Git Rich or Die Try'n personal unregistered hedge fund. Years ago I asked a friend whether his wife was ok with a certain decision he made. He straight faced said to me, "I'm the CEO of this family." Link to comment Share on other sites More sharing options...
Guest Dazel Posted November 6, 2012 Share Posted November 6, 2012 Now that is some funny shit. Dude. Link to comment Share on other sites More sharing options...
Alekbaylee Posted November 6, 2012 Share Posted November 6, 2012 +1 Hopefully you'll keep posting on this board and share your ideas with us. Well I don't want to be famous. I want the money, but not the fame. So while it would be interesting to be a anonymous billionaire, I can do all the same things with $50 million and $1.5m annual income from blue chips. NetJets etc... Do I want to be a famous rich guy and be on TV all the time like Buffett? Not really, but I do like Becky Quick an awful lot, and Poppy. Link to comment Share on other sites More sharing options...
Parsad Posted November 6, 2012 Share Posted November 6, 2012 Eric, I know you are okay with volatility. You once stated how you've been down 50% or so (on the BAC trade, I believe). Is your wife okay with that too? Lol, I guess like other things its better to keep some things for yourself and not telling your wife...but I am waiting for Eric's point of view on that...lol She knew about it, she did get annoyed because it made me grumpy. However, she likes the new digs in California and that's only made possible by my Fitty Cent Dollah' Git Rich or Die Try'n personal unregistered hedge fund. He's going to start "Ericopoly Water" later and sell it to Coke too...that's why he's going to be out of the game at $50M! ;D Feel free to retire from hardcore investing in the future Eric, but don't stop posting. Cheers! Link to comment Share on other sites More sharing options...
nkp007 Posted November 6, 2012 Share Posted November 6, 2012 The tone on this board is refreshing. I can picture all of us having a beer at a bar after selling our startup or something. Link to comment Share on other sites More sharing options...
Parsad Posted November 6, 2012 Share Posted November 6, 2012 The tone on this board is refreshing. I can picture all of us having a beer at a bar after selling our startup or something. Many of us do Nkp007! Unfortunately it usually only happens in Toronto during the Fairfax dinner and AGM. Cheers! Link to comment Share on other sites More sharing options...
Parsad Posted November 6, 2012 Share Posted November 6, 2012 Moynihan presenting next Tuesday. Cheers! http://finance.yahoo.com/news/bank-america-ceo-brian-moynihan-182800153.html Link to comment Share on other sites More sharing options...
kmukul Posted November 7, 2012 Share Posted November 7, 2012 I'm working on that list, and when I get there I'm out of the game for the most part. That's a shame, I think that's when it starts to get interesting... Well I don't want to be famous. I want the money, but not the fame. So while it would be interesting to be a anonymous billionaire, I can do all the same things with $50 million and $1.5m annual income from blue chips. NetJets etc... Do I want to be a famous rich guy and be on TV all the time like Buffett? Not really, but I do like Becky Quick an awful lot, and Poppy. Man you should come on TV, one thing it will be good to learn and know when to go all in the other thing is it will be good to see someone talk about god in the right way on tv.. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 7, 2012 Share Posted November 7, 2012 I'm working on that list, and when I get there I'm out of the game for the most part. That's a shame, I think that's when it starts to get interesting... Well I don't want to be famous. I want the money, but not the fame. So while it would be interesting to be a anonymous billionaire, I can do all the same things with $50 million and $1.5m annual income from blue chips. NetJets etc... Do I want to be a famous rich guy and be on TV all the time like Buffett? Not really, but I do like Becky Quick an awful lot, and Poppy. Man you should come on TV, one thing it will be good to learn and know when to go all in the other thing is it will be good to see someone talk about god in the right way on tv.. Legally I can talk about god any way I want, socially though... Maybe with a voice scrambler and a bag over my head. Link to comment Share on other sites More sharing options...
Sunrider Posted November 7, 2012 Share Posted November 7, 2012 Deities aside (apart from the almighty great humiliator) ... what do you guys make of what's going on with the warrants? For example - BAC off today as everything else, I saw the warrants briefly dip to 3.81/82 but now they're stuck at 3.87/88 whilst BAC has fallen another 10c .... so with the price staying up IV keeps ticking up and it looks like people just don't want to sell these? (Well, I'm one of those.) Does anyone have a good overview of who owns BAC A warrants? I remember reading somewhere that Berkowitz owns a solid chunk of AIG warrants but I was wondering if BAC warrants are in similarly firm hands? Secondly - what's the board's view on the comparative attractiveness - i.e. weigh BAC/AIG warrants roughly equally or favour one over the other for new positions? Thank you - C. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 7, 2012 Share Posted November 7, 2012 Secondly - what's the board's view on the comparative attractiveness - i.e. weigh BAC/AIG warrants roughly equally or favour one over the other for new positions? I view BAC more favorably. Reason: AIG relies more on external factors to boost it's ROE -- interest rates and insurance rates. Both can be low for a very long time. 2/3 of BAC's upside is dependent on their own actions -- cost cutting and working through legacy nonperforming things. Only 1/3 of the upside is dependent on the interest rate curve normalizing. Thus, I think BAC management is in greater control of the catalyst that will take the stock back to 10% ROE (or book value really), and AIG is not in control of it's catalyst for a similar ROE. I would like others who are more knowledgeable about AIG to comment. Link to comment Share on other sites More sharing options...
hardincap Posted November 7, 2012 Share Posted November 7, 2012 both look pretty good to me. AIG has government exit, potential AIA sale and IFLC IPO as catalysts. trading at less than .6x TBV. Secondly - what's the board's view on the comparative attractiveness - i.e. weigh BAC/AIG warrants roughly equally or favour one over the other for new positions? I view BAC more favorably. Reason: AIG relies more on external factors to boost it's ROE -- interest rates and insurance rates. Both can be low for a very long time. 2/3 of BAC's upside is dependent on their own actions -- cost cutting and working through legacy nonperforming things. Only 1/3 of the upside is dependent on the interest rate curve normalizing. Thus, I think BAC management is in greater control of the catalyst that will take the stock back to 10% ROE (or book value really), and AIG is not in control of it's catalyst for a similar ROE. I would like others who are more knowledgeable about AIG to comment. Link to comment Share on other sites More sharing options...
Cardboard Posted November 7, 2012 Share Posted November 7, 2012 Don't forget solid focus on improving the combined ratio at Chartis which is a $35 billion net premium earned a year beast. Not growing either at the moment, but both factors could change quickly with the hardening market and excess capital. I own both in very similar amount and believe that the undervaluation or upside is quite similar. Cardboard Link to comment Share on other sites More sharing options...
stahleyp Posted November 7, 2012 Share Posted November 7, 2012 Deities aside (apart from the almighty great humiliator) ... what do you guys make of what's going on with the warrants? For example - BAC off today as everything else, I saw the warrants briefly dip to 3.81/82 but now they're stuck at 3.87/88 whilst BAC has fallen another 10c .... so with the price staying up IV keeps ticking up and it looks like people just don't want to sell these? (Well, I'm one of those.) Does anyone have a good overview of who owns BAC A warrants? I remember reading somewhere that Berkowitz owns a solid chunk of AIG warrants but I was wondering if BAC warrants are in similarly firm hands? Secondly - what's the board's view on the comparative attractiveness - i.e. weigh BAC/AIG warrants roughly equally or favour one over the other for new positions? Thank you - C. Yes!!! Another religion thread! :P Link to comment Share on other sites More sharing options...
PlanMaestro Posted November 7, 2012 Share Posted November 7, 2012 Yes!!! Another religion thread! :P At least in this one you can say: both! Link to comment Share on other sites More sharing options...
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