finetrader Posted August 12, 2014 Share Posted August 12, 2014 I'm in also since january, This thing is a patience game. But clearly if they sustain and grow their earnings, it is undervalued Link to comment Share on other sites More sharing options...
plato1976 Posted August 12, 2014 Share Posted August 12, 2014 all the eyes on bank of america but isn't c cheaper? I'm in also since january, This thing is a patience game. But clearly if they sustain and grow their earnings, it is undervalued Link to comment Share on other sites More sharing options...
ERICOPOLY Posted August 12, 2014 Share Posted August 12, 2014 all the eyes on bank of america but isn't c cheaper? I'm in also since january, This thing is a patience game. But clearly if they sustain and grow their earnings, it is undervalued Just one sheep's opinion, but... Buffett was asked why he didn't own Citigroup and he said he didn't know what they would earn in the future. Given that they're both fairly cheap, I just choose to own BofA and leverage his wisdom. C may do better though. Link to comment Share on other sites More sharing options...
CorpRaider Posted August 12, 2014 Share Posted August 12, 2014 Personally, my decision came down to preferring the terms of the warrants for BAC over comparable vehicles for investing in Citi. I also determined, in my infinite and unique wisdom, that Citi does not have a Merrill Lynch. BTW, I wonder what would happen the next day if it were announced Nelson Peltz, for example, has acquired a large stake in BAC and started talking to the board about spinning Merrill. I did like that Citi has an independent and powerful chairman whom I think will likely start breaking up the bank if they can't turn it around in the next year or two. Link to comment Share on other sites More sharing options...
schin Posted August 14, 2014 Share Posted August 14, 2014 Buffett was asked why he didn't own Citigroup and he said he didn't know what they would earn in the future. Given that they're both fairly cheap, I just choose to own BofA and leverage his wisdom. C may do better though. Do you think Buffett didn't know how to value the non-US (Mexico, Asian, etc.) income streams of Citi? Or do think it was the same concerns the Fed have about safe guards and risk system? Didn't get a chance to see the interview where he stated that. He's invested in foreign banks before. He should be comfortable with non-US economies. Domestically, he seems to know JPM, WFC, BAC, UBS, etc... so, that's quite a statement, if you think about it. It's not like Microsoft that punts. Banking is in his wheelhouse. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted August 14, 2014 Share Posted August 14, 2014 Buffett was asked why he didn't own Citigroup and he said he didn't know what they would earn in the future. Given that they're both fairly cheap, I just choose to own BofA and leverage his wisdom. C may do better though. Do you think Buffett didn't know how to value the non-US (Mexico, Asian, etc.) income streams of Citi? Or do think it was the same concerns the Fed have about safe guards and risk system? Didn't get a chance to see the interview where he stated that. He's invested in foreign banks before. He should be comfortable with non-US economies. Domestically, he seems to know JPM, WFC, BAC, UBS, etc... so, that's quite a statement, if you think about it. It's not like Microsoft that punts. Banking is in his wheelhouse. He also said he would invest in Microsoft, for what it's worth... but hasn't done so because of the conflict with Bill Gates on the Berkshire board. Link to comment Share on other sites More sharing options...
schin Posted August 14, 2014 Share Posted August 14, 2014 Buffett was asked why he didn't own Citigroup and he said he didn't know what they would earn in the future. Given that they're both fairly cheap, I just choose to own BofA and leverage his wisdom. C may do better though. Do you think Buffett didn't know how to value the non-US (Mexico, Asian, etc.) income streams of Citi? Or do think it was the same concerns the Fed have about safe guards and risk system? Didn't get a chance to see the interview where he stated that. He's invested in foreign banks before. He should be comfortable with non-US economies. Domestically, he seems to know JPM, WFC, BAC, UBS, etc... so, that's quite a statement, if you think about it. It's not like Microsoft that punts. Banking is in his wheelhouse. He also said he would invest in Microsoft, for what it's worth... but hasn't done so because of the conflict with Bill Gates on the Berkshire board. "Who is this Buffett?" Buying IBM and commenting about investing in MSFT.... is it Bizzaro Buffett? Link to comment Share on other sites More sharing options...
racemize Posted August 14, 2014 Share Posted August 14, 2014 Baupost is holding the A warrants. Pretty surprising... Link to comment Share on other sites More sharing options...
fareastwarriors Posted August 19, 2014 Share Posted August 19, 2014 Citigroup Considers Sale of Retail-Banking Business in Japan Move Would Shift Focus to Citigroup's Other Businesses in Japan http://online.wsj.com/articles/citigroup-considers-sale-of-retail-banking-business-in-japan-1408464316?mod=WSJ_hp_LEFTWhatsNewsCollection Link to comment Share on other sites More sharing options...
bobp Posted August 25, 2014 Share Posted August 25, 2014 These A warrants require ten warrants to purchase 1 share. At 82 cents you're paying $8.20 for a warrant exerciseable at 106. And they've been flying. I sold mine at 73 last week and I'm trying to figure this out. You do need ten warrants. The stock reverse split ten for one. The wrts have to buy 1/10 of what they bought before. Do buyers not know this or is 8.20 not overpriced? They have 4 1/2 years. Baupost is holding the A warrants. Pretty surprising... Link to comment Share on other sites More sharing options...
racemize Posted August 25, 2014 Share Posted August 25, 2014 These A warrants require ten warrants to purchase 1 share. At 82 cents you're paying $8.20 for a warrant exerciseable at 106. And they've been flying. I sold mine at 73 last week and I'm trying to figure this out. You do need ten warrants. The stock reverse split ten for one. The wrts have to buy 1/10 of what they bought before. Do buyers not know this or is 8.20 not overpriced? They have 4 1/2 years. Baupost is holding the A warrants. Pretty surprising... 0.82 is the price for the warrant to buy 1/10th of a share at $106 per share, so they have the same economic effect as before. That being said, the common has to grow at north of 23% per annum for the warrants to be better. Seems very speculative to me. Link to comment Share on other sites More sharing options...
CorpRaider Posted August 25, 2014 Share Posted August 25, 2014 yeah I'm struggling to figure it out. Maybe he expects large dividend increases and commensurate adjustments? The hurdle is only $.10, I believe. Link to comment Share on other sites More sharing options...
Guest wellmont Posted August 26, 2014 Share Posted August 26, 2014 the warrants are trading sardines and may never be in the money. but if C rises fast over the next one and two years the warrants will go up more because there will be time value left for dreamers and speculators. simply a leveraged bet on C in the short/med term. Best not to get hung up on whether they will end up in the money. the public loves warrants like this and will create a market for them if C gets popular again. things that are low priced and move fast attract fast money. that's my Theory, which could be way off base. Link to comment Share on other sites More sharing options...
tng Posted August 26, 2014 Share Posted August 26, 2014 Also, Klarman says to not copy Baupost because they often do some weird stuff. We don't know if he is simply long the warrants or if he has some fancy position such as have it combined with writing calls or writing puts. I haven't been paying attention to C, but I know that the time value of the warrants for AIG, BAC, and GM don't behave like the options. For GM in particular, there were periods where it violated the no arbitrage principle (i.e. calls of similar strike were more expensive than the warrants, despite having a much shorter time to expiration). I can imagine some combination of options and the warrants creating a free lottery ticket, but that won't be obvious in the 13F filings. Link to comment Share on other sites More sharing options...
peter1234 Posted August 26, 2014 Share Posted August 26, 2014 Also, Klarman says to not copy Baupost because they often do some weird stuff. We don't know if he is simply long the warrants or if he has some fancy position such as have it combined with writing calls or writing puts. Agreed. He might look at it as an inflation hedge? Link to comment Share on other sites More sharing options...
CorpRaider Posted August 26, 2014 Share Posted August 26, 2014 Yeah, and buffett says not to copy him because...he doesn't want you to. You did pretty well recently by buying some Idenix and Theravance. http://mebfaber.com/2014/08/26/13f-investing-doesnt-work-right/ Link to comment Share on other sites More sharing options...
fareastwarriors Posted September 2, 2014 Share Posted September 2, 2014 Why a Breakup of Citigroup Is Still a Good Idea http://dealbook.nytimes.com/2014/09/02/why-a-breakup-of-citigroup-is-still-a-good-idea/?module=BlogPost-Title&version=Blog Main&contentCollection=Breakingviews&action=Click&pgtype=Blogs®ion=Body Link to comment Share on other sites More sharing options...
ourkid8 Posted September 3, 2014 Share Posted September 3, 2014 Citigroup Agrees to Sell 41 Texas Branches to BB&T: “We see the retail banking industry rapidly evolving beyond a purely branch-based model, and so we will dedicate our resources and investments on a more focused branch footprint in our major urban markets and on expanding our digital channels nationally.” http://www.bloomberg.com/news/2014-09-03/citigroup-agrees-to-sell-texas-branches-to-bb-t.html?cmpid=yhoo Link to comment Share on other sites More sharing options...
fareastwarriors Posted September 8, 2014 Share Posted September 8, 2014 Citigroup Sees Trading Revenue Slump Easing Financial Chief Says Bank Focused on Passing Stress Tests http://online.wsj.com/articles/citigroup-focused-on-passing-stress-tests-1410186807?mod=WSJ_hp_LEFTWhatsNewsCollection Link to comment Share on other sites More sharing options...
fareastwarriors Posted September 9, 2014 Share Posted September 9, 2014 Citigroup to Bolster Mexican Unit To Invest $1.5 billion Over Four Years to Improve Technology Systems, Expand Mexican Lending http://online.wsj.com/articles/citigroup-to-bolster-mexican-unit-1410292427?mod=WSJ_hp_LEFTWhatsNewsCollection Link to comment Share on other sites More sharing options...
fareastwarriors Posted September 15, 2014 Share Posted September 15, 2014 Citi Getting Closer to Sale or Spinoff of Subprime Lending Unit CEO Michael Corbat Says OneMain No Longer Fits into Citi's Plans Despite Recent Profitability http://online.wsj.com/articles/citi-getting-closer-to-sale-or-spinoff-of-subprime-lending-unit-1410814832?mod=WSJ_hp_LEFTWhatsNewsCollection Link to comment Share on other sites More sharing options...
flixil Posted September 16, 2014 Share Posted September 16, 2014 The basic idea on Citigroup is that Tangible book value is: 56$ while stock price is 52$? Is there something else now? 211M(equity) - 9 (prefered) - 32 (intangibles) = 170M 170M/3'037M (shares outstanding) = 56$ Link to comment Share on other sites More sharing options...
fareastwarriors Posted September 17, 2014 Share Posted September 17, 2014 Citigroup Embraces Derivatives as Deals Soar After Crisis http://www.bloomberg.com/news/2014-09-17/citigroup-embraces-derivatives-as-deals-soar-after-crisis.html Link to comment Share on other sites More sharing options...
fareastwarriors Posted September 29, 2014 Share Posted September 29, 2014 Citigroup Sees $10 Billion in Annual Bank Compliance Costs http://www.bloomberg.com/news/2014-09-29/citigroup-sees-10-billion-in-annual-compliance-costs-for-banks.html Link to comment Share on other sites More sharing options...
wescobrk Posted September 30, 2014 Share Posted September 30, 2014 "The basic idea on Citigroup is that Tangible book value is: 56$ while stock price is 52$? Is there something else now? 211M(equity) - 9 (prefered) - 32 (intangibles) = 170M 170M/3'037M (shares outstanding) = 56$" It's about $56.80 or 90 and in two weeks it should at or above $58. Link to comment Share on other sites More sharing options...
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