Month: March 2009

Categories
Investing

This “Wang Yang Bu Lao thing” on credit rating

Reading Time: 2 minutes

Last Updated on May 28, 2009 by stlplace

(Update) Big bro started to act now.

(Original) We all know the stock rating game: I mean those “buy”, “hold” and “sell” rating usually issued by sell side (brokeage) analysts. They are mostly not objective, because at the end of the day the dealers want to sell you more stocks, regardless they are good or bad. At the height of this analyst game is Goldman “conviction buy”, my question for them is why there are no “conviction sell”? Presumably, one can use a sell list to short stocks?

Oh well, Michael Lewis, the former Soloman bond salesman, described the analysts in his “Liar’ Poker” very well. So I won’t keep beat on them. My focus on this little article is on the credit rating (bond rating) game. We all know the credit rating agencies (agencies may have mislead some to think they are independent organization, they are really for-profit companies) have been under attack for the debale of housing/mortgage markets because they had been slept in the same bed with the issuers of MBS (mortgage backed securities).

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Categories
Fun

My Berkshire Hathaway proxy vote

Reading Time: < 1 minute

Last Updated on March 30, 2009 by stlplace

I sold my remaining BRK.B share last week, and got some US bank (NYSE: USB) shares instead. The main reason I sold BRK.B is:

1) I don’t really understand the valuation of the business, which is 50% insurance + 50% manufacturing, housing, retailing etc. I have no idea for insurance and the whole thing is too complicated (big) for me.

2) I feel while Buffett escaped the worst market in 2008 with relatively few wound, he has appeared too much in public (CNBC?), and may have spent too much time with people he felt comfortable with (CEOs of Goldman Sach etc.). In other words, I hope he spend more time in Omaha, doing his thing/improving himself, rather than “start get into bubble”.

BRK_proxy_vote

For the similar reason, I decided not to worship him in Omaha this May, although I understand the chance of seeing the great investor becomes slimmer and slimmer as time goes (as I told my wife 🙂

That’s OK, at least I voted with my best judgement. I will explain why I voted against some of the directors if you are curious.

Categories
Fun

GM is NOT too big to fail?

Reading Time: < 1 minute

Last Updated on March 31, 2009 by stlplace

(update) CNNMoney appears to agree with me. When did I sound like MSM (main stream media)?

Obviously, that’s how the US goverment thinks. When bailing out the AIG, they were saying AIG is a systematic important institution, and they just could not let it fail. And here is the bailout (handout details).

aigbailout

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Categories
Saint Louis

$75 bonus cash for new checking account at US bank

Reading Time: < 1 minute

Last Updated on June 1, 2009 by stlplace

The promotion ends Monday March 30, for new customer only. $25 will appear in acct shortly after opening. Need to use the Check Card once to get the remaining $50. As I understand US bank does business mostly in Midwest and Northwest. Check out bank branch locations from their web site.

No additional conditions such as direct deposit etc.

Disclosure: I just opened one this morning; I also hold a few shares of US bank stock (NYSE: USB) at this time.

US bank pic

Categories
Master Series

Questions for Warren in this year annual shareholder meeting

Reading Time: < 1 minute

Last Updated on March 27, 2009 by stlplace

Also collected here.

1. Why invest in Utilities? Does not Utilities need a lot of capital, what’s the difference between Utilities and the original Berkshire (BRK.A, BRK.B) textile business? You did explained in your letter that utilities can deploy capital for a decent return. And I read this old article “Why Buffett is buying utilities” from MSN money (Jim Jubak). Do you agree some of what Jim said?

2. Why keep American Express (NYSE:AXP) and Moody (NYSE:MCO)? Don’t we see the permanent demage of consumer credit, and the rating companies? How about Wells Fargo (NYSE: WFC)? Why not sell all Bank of America (NYSE: BAC) shares (noticed you did sell half last year)?

3. Derivatives. There are a lot crititics on this, and you have explain this very well in the shareholder letter. But, as I read “Poor Chariles Almanack”, Charile is much more cautious on derivatives, and its systemantic risk (chain effect of credit risk form counter parties). What’s your comments on over the counter derivatives market in general?

Will add more questions when it pops up.

Disclosure: I sold my remaining BRK.B share yesterday. No positions on the other stocks being mentioned.

Categories
video

Mizzou is in Elite 8

Reading Time: < 1 minute

Last Updated on March 27, 2009 by stlplace

Unbelievable shot at the end of 1st half. Link here.

Actually coach Anderson did ask players do those long range shoots in practice. It surely paid off.

Categories
Stocks

US Bancorp

Reading Time: < 1 minute

Last Updated on March 25, 2009 by stlplace

Time to do some homework, amid all these AIG bonus (Yahoo Tech-ticker; NY Times op ed), and toxic asset plan (Krugman vs. Geithner craziness). I decided to calm down and took a look at US Bank (bancorp) (NYSE: USB; company IR page).

Articles I read from seekingalpha

Amit Kumar: Bank stocks: invest or trade?

Martin Hutchinson (money morning): Wells Fargo and US Bancorp: hitch a ride with those two

Patrick Garot: Repaying TARP: life for USB and NTRS?

I learned about US Bank a few years ago after the FirstStar merger. My coworker told me that this is the only bank named after “US/United States” after Sept 11 (she implied no more bank will be approved using similar name). Later on I visited US bank branch with my roommate because he was US bank customer. I applied US bank visa card %0 balance transfer last year. They approved my card quickly and gave me a generous credit line 🙂

I will add my investment thesis later on.

Categories
video

Response on Geithner Plan

Reading Time: < 1 minute

Last Updated on March 27, 2009 by stlplace

Toxic asset plan, or Public Private Investment Partnership (PPIP).

Charile Rose
Hedge fund manager’s perspective: Daniel Alpert is a managing director of Westwood Captial and Thomas F Steyer is Co-Managing Partner of Farallon Capital Management (total about 22 mins)

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Categories
Economy

The Geithner Plan

Reading Time: < 1 minute

Last Updated on March 31, 2009 by stlplace

The plan
Tim Geithner (WSJ): My Plan for Bad Bank Assets (aka Public Private Investment Partnership, PPIP); Treasury dept press release.

Notice the PPIP will leverage the TALF program launched by Fed recently. Here is a picture explains how PPIP works with TALF. (click to enlarge)

talfbaitandswitch

I think it’s important to read those before reading others comments, no matter a guy is nobel laurate or a blogger. Blackrock and Pimco, two large asset (bond) managers, appeared like the plan.

Psychology Book
Influence: Science & Practice by Robert Cialdini

Categories
Fun Video

Mizzou goes to sweet 16

Reading Time: < 1 minute

Last Updated on July 24, 2009 by stlplace

Link here. See the video below.

Watch CBS Videos Online

The only thing I want to add is: what a game.