Korean Job Discussion Forums

[jdog2050]

Seeing as it's one of the only banks with it's shit even half-way together, I think they'll come out big at the end of this crisis...it's trading at 4.73 right now.

[Viaje]

It seems I remember they just asked for a bailout, for the second time, not too long ago. They are very big and in better shape than most, but they have been in trouble too. Of course its possible the stock could go up but it might go down further as well before it goes up. Hehe, how intelligent or dumb does that sound, stating the obvious. I think its better to invest in a good company who will be involved in the infrastructure rebuilding that will definitely take place soon, as announced in the stimulus plan, and also the alternative energy companies(if you could figure out which ones are good and will make money)

[curiousaboutkorea]

It's a long ways out if they do make it through all this. I stress the "if." A year ago they're stock was hovering around $40.

[mole]

[Jandar]

One thing is for sure, the bank will not fold. it will be nationalized before it's allowed to sink.

How that will effect the stock price remains to be seen.

I don't see the government allowing stock holders to benefit from the buy out.

The market is still in correction mode at 7000 you are looking at a 1997 level correction, the correction is going back to 1993 at around 5000.

If you can find real estate worth investing in (non speculation investment) productive land or minerals even sand and wood.

Muni-Bonds may become popular soon once the make work projects start booming.

My suggestion, unless you are a savvy investor stay away from stocks move you principle monies into minerals, look at productive land as things start to shake out in a year move towards bonds and other real estate buy up if you can sell your dwelling, somewhere around 2010 stcks may become more appealing.

Just my guess this is not real or professional advice by any means.

[Jati]

[mises]

[mises]

[mole]

[mole]

I missed it, but am watching post game show of Chairman Bukkake's thingy today.
Apparently, he expressed his complete opposition to any nationalization of financial institutions.

[bobbyhanlon]

some very smart and knowledgeable people will tell you its the bargain of the century, and some other very smart and knowledgeable people will tell you they're doomed.. which means that certainly no-one on this board knows what is going to happen.

[jdog2050]

[OneWayTraffic]

In general, the best time to buy a large company is when it's relatively unpopular. Warren Buffet made some huge bets on Coca Cola, American Express and Geico this way and made big. However he first made sure the company was going to survive. With the banks, the real question may be one of confidence. If people still have enough confidence in the bank to keep it liquid it will probably survive and even prosper due to the lack of strong competition in the next 10 years. If it gets nationalized, then the shareholder will probably take all losses before, and profits after the governments senior stock (very much like the Fannie and Freddie deals.)

The other thing with banks are the quality of its assets.
According to Google finance, the bank currently has 1.82 Trillion in assets (i.e loans to customers, securities, mortgages, subprimes etc.) and 1.64 Trillion in liabilities.(deposits and money borrowed from other banks, bonds and so on.)

That's an equity of 200 billion or so. The market cap is roughly 33 billion. Theorectially the bank is a wonderful deal, available for 10% of it's liquidation value. If these figures are accurate, and one could buy a diversified list of 10 companies of this type then one would be sure of very satisfactory returns.

The problem of course is the relative size of the assets and liabilities compared to it's equity. If the quality of the assets is overstated such that in reality the bank will receive only 80% of it's asset value (due to mortgage defaults, companies that have lent money going bankrupt, overvalued subprime holdings still in the asset column at inflated prices, or being forced to call in it's investments at depressed prices to cover its liabilities when customers pull their money out) then the net equity of the company falls to minus 150 billion dollars and the shareholders lose their shirts.

So that's the crunch. The liabilities of a company are known and certain. The quality of the assets isn't. If you were to buy shares of this company, you'd need to ascertian for yourself, the real value and quality of its assets and also the possibility of it's liabilities being called at an inopportune time.

Noone who hasn't done this could possibly tell you the value of the company. And people who do do this may give you different answers.

Note Mises quoted a 100 odd to 1 leverage. The google finance figures are closer to 10 to 1. It's possible he has newer info.




http://www.google.com/finance?client=ob&q=NYSE:BAC

[OneWayTraffic]

[mises]