Well ok, we were both a little bit wrong.
The Treasury Dept had estimated that our losses on the GM loan could be as high as 60%. Now, given the fact that gov't sources nearly always present the rosiest possible picture, I was bracing for an even larger loss, so I'll admit I was wrong on that point.
But, we are still going to take a $14 billion loss on an $80 billion loan, putting our losses at around 18%. Not too shabby, but definitely could have been better.
Even still.....$14 Billion lost. That is a pretty hefty chunk of change. Gone. Do we all get a free car out of it?
What really gets me about this article, is the fact that this announcement comes as part of a strategy by the White House to portray this venture as a success. Well, I'm delighted to hear about jobs saved, or created, or however they want to spin it. But we just pissed $14 BILLION down the drain to save a private company from itself. That's the landscape here.
GM or Ford? Since GM's IPO in late 2010 their stock has lost 7%. Ford's stock is up 45%. The marketplace is the best arbiter of success. Since November, you could use the "Pin the Tale on the Donkey" stock picking approach and still do better than GM.
$14B!!! How many GM & Chrysler townhalls has Obama been to in the last year. I can't keep count. JP Morgan, Goldman, Citi, Morgan Stanley and others financial institutions paid back their TARP with interest and dividends. No townhalls for them.
I can't believe I'm saying this, but I would buy GM stock before BAC, if they were my only 2 choices. Sorry marikod.
-- Modified on 6/1/2011 7:15:45 PM
Even mari couldn't lose $14 bilion dollars in the market. or could he??? lol
loss or gain until I sell and frankly it's looking like I may be a lifetime shareholder.
You, sir, are officially down a bottle of Krug nonvintage, or was that a jeroboam....
Plus if you really were a gambler you would buying BOA right now while it's below book value. Given your lack of cojones in this area ,I'm going to start calling you GaGambler In His Own Mind....
all we have to do is arrange to be in the same town at the same time. lol
as for BOA, I have to confess, I haven't bought a single stock in months, the last thing I did in the market was buy a little pink sheet company, but I divested myself of it quite a while back. The last thing I want to do in my life is spend all day, every day filling out 8ks every time I take a shit.
If I ever get the desire to buy another public company, I have left instructions to have my own fingers broken so I can't sign the paperwork. lol
Let me know the next time you are in Vegas, Maybe we can meet Pri at the buffet? rofl
Have you ever given some thought that BAC will never recover. There are a lot of companies that just don't move. Well they move, but it's usually lower.
Just sell it, and within seconds buy Apple, buy a Gold ETF, shit if you have a hard-on for a financial firm, then use the proceeds to buy Goldman. At least they are best in class in their industry. Plus, don't you have some nice gains from your Frontier Oil position? Offset those gains w/your BAC loss, and you're still in the game.
I just don't get that "I haven't lost anything yet until I sell" mentality. Do you have the same mindset when you are losing your ass in Vegas? It's the same thing. See you at the buffet (lol)
there are additional costs of bailing out the big banks beyond TARP repayment, (which big bank CEO put a high prioroty on so they could get back to raking in huge bonus $$$ for running their institutions into the ground)... FDIC loss share agreements, artifically low interest rates which fuck savers, $1T+ printed money injected into stocks etc, offloading dogshit MBS's to fannie, freddie, not to mention fiddling with accounting
Well except for myself of course. lol
After several years on this board, I can safely say St Croix is one of the few here who actually "gets it".
and you send yours to St. Croix, and we'll see who is happier.
I prefer to invest in areas where I don't have to worry about P/E ratios.
St Croix does know what he is talking about, and I have a lot of respect for him, but don't forget, I do this shit for a living
Not sure she is a provider, but maybe she will throw you one cheap. That way you'll have a little left over for the buffet with Pria.
Also she is very knowledgeable about investing. Think of it as a twofer. You'll get a little action, and at the same time she'll call you a putz for investing in BAC (roflmao)
once the bank, Merrill Lynch and Country Wide return to normal business operations.
Think about that for a minute - you can buy BOA at less than book right now and you are buying a 40 billion a year business.
Although your friend Willy thinks BOA is profitable now, he is the only one and that's why shares are on sale.
I can't believe you would suggest that BOA might never recover. You are dead wrong about that. If they could just get by a week without some new headline killing them, they would start to inch up.
Here's a promise - when BAC gets back to $46 - my original entry point - I will treat you and GaGambler both to a lifetime buffet pass so you can eat with Priapus every day.
Could BAC eventually recover? Sure, maybe, who knows. The BAC business model and its stock are broken right now. There are a number of large companies with broken stocks. Look at Cisco and Microsoft. They still make a ton of money, but their stocks are broken, and they have been broken for 10 years.
You are absolutely looking at this with blinders. My original point was are there better investment choices than BAC, a better chance to recoup your losses in a shorter period of time vs waiting and hoping that BAC will recover. Honestly marikod, if you had to invest $10K today in JPM, GS or BAC, which financial would you select? BAC may go up, but I believe that JPM or GS will outperform BAC in the short and long term.
It's tough to hit the sell button and recognize the LOSS, but like I said earlier, reinvest in another company with more potential be it financial, hi-tech, industrial, whatever.
Re BAC getting back to $46, and you treating GaG and I to a lifetime buffet pass. By the time that happens, GaG and will either have died from natural causes, liver damage, or most likely from a new STD strain.
It's one of the biggest rookie mistakes. That and holding on to losers way past their shelf life. No one ever "outsmarts" the market. You can possibly predict it, you can ride it, you can react to it, but you will never outsmart it.
One of the hardest things to learn for amateur investors is how to cut your losses, learn from them and move on. I hate to use old saws, but it truly is a marathon not a sprint. Mari take St C's advice,dump this fucking loser and move on, even if you get back to flat, you're still going to be a loser on this one. Get over it and move on, we've all booked losers before, this isn't about "being right", it's about making money.
a different economic world but I have nearly 8000 shares as a result
of steadying buying to bring my cps down from 46 to the present 16.
Do the math- at $11.25 or so, would you take that big a loss?
Maybe you can blink at that but I can't.
Can St. Croix direct me to one stock that will appreciate enough to cover that big a loss in the next five years?
I just need BOA to go up about 5 dollars a share and I can escape. Until then
NO BUFFET FOR YOU.
Let me ask you mari, if you were looking at BOA for the first time today, with no pre existing emotional biases about the stock, would you buy 8000 shares of BOA today?
Now let me ask you another question, if you were at the blackjack table, how many times would you double your bet before abandoning the strategy of "doubling up to catch up"? There is another saying that comes to mind, "you can get even, or even worse", so far your strategy to "dollar cost average" has only succeeded in getting you "even worse"
Quit acting like a rookie, you sound like the quintessential gambling addict who "just" needs to win the next bet to get even and quit. Listen to yourself. Seriously reread that last part of your post, do you even realize how desperate you sound. Do I have to hold you down and let St C beat your over the head with a stick? Take your fucking loss, then take the money that you still have and invest it with a real plan.
One final word of advice, don't ever hang on to losing positions so long that long term capital loss treatment kicks in. Cash out and buy back in if you must but don't ever put yourself in the position where you think you can't afford to sell.
Oh and one final, final word. Quit letting emotions dictate your investing strategy, greed and fear are two very powerful emotions, but you need to check those emotions at the door if you expect to be successful.
Assume I cash out Monday. I bet that you and St. Croix each a bottle of Krug that neither of you can pick a stock that in two years time will appreciate to a point that it would cover my loss.
That is what you guys are both missing - the take your loss and reinvest only works when you pick a winner. I could do that and pick another loser.
Doubling your loss at blackjack is not a valid analogy bc blackjack is pure math. The house advantage will always, always, always win over the long term. There is no set house advantage on BOA and it is so low now it can't go much lower.
You are damn right I'm desperate money on this crappy investment. If I lose this much on a single stock, what the hell am I doing the the market anyway?
But come on take the bet pick a stock and in two years we will meet in Vegas and see who is buying.
until the job market improves substantially, housing will stay in the shits. aren't you concerned about all the dogshit loans yet to blow up they are holding? they have untold # of people WAY underwater and have'nt paid the mortgage in months or years but haven't foreclosed because the market cant abosorb anymore.
but hell, helicopter ben will soon be puliing QE3-4-5 out of his ass so maybe you'll get new life with devalued $$$s. Good luck.
and understand the buy and hold concept.
Even with the housing double dip I can't believe there is much more downside to BAC.
He died in 1976. We are not in 1976 anymore. I bet when Ben Graham had to buy or sell a stock he probably called his brother Alex Graham Bell. OK, that was pretty bad joke.
Markets today are global, volatile with program trading, hedge funds, a dearth of information anytime anyplace, and throw in a little May Crash 2010 for good measure. It's not 1976.
Businesses have to adapt more than ever due to global competition and technology. How do you think the buy and hold shareholders of Blockbuster feel. I bet they would like to gun down the founders of Netflix. How about the shareholders of Nokia or now Research in Motion as Apple takes them to the cleaners? Shit marikod, how about GM? That was grandma's buy and hold stock.
Benjamin Graham is dead. Even Warren Buffett buys and sells more than you think.
im still holding 3000 shs of Webvan! if they ever get back in business i just might be able to unload them!
right now for me to "buy and hold". i'm a nervous nellie. preesidential election, up coming treasury sales UNsupported by FED, middle east, euro debt, aye carumba...nevertheless, i wish you good luck
you'll be happy to know, BAC holds my mortgage and we have reached a mutually satisfactory agreement so at least my mortgage won't be blowing up on you! lol
marikod time tested investing strategy of "buy and hold and grab my ass". I would never pick one stock and hold it for 2 years. I would be doing a "marikod".
You are at $90,240 based on BAC's closing price today. You need to get to $128K to break even. Can I get there before you. No problem, my concern is GaG will get there before me. Figure out a way to play this game, and I'm in. But even playing a game like this, I'm still going to invest in multiple securities, hold them for a day, a week, a month maybe, long or short, etc...etc.
How about this. GaG and I take to you Vegas, and get you drunk. But you have to promise to commit to memory GaG's advice, because it's the best you'll ever get.
in 2 years I want you to resign your job and start a hedge fund.
Guess how many active managers make 20% a year over any 10 year period? Zero. Five year period? Maybe one or two but I doubt.
Who holds the current streak for even beating the market and how long is it? Not sure but since Bill Miller flamed (um he owned BAC as well BEar Stearns) you don't hear much talk about that.
The only way I can be sure of 20% gain for two years in a row is if GaGAmbler's bartender does an IPO.
I decided I didn't want to have to explain the inevitable "really stupid" trades every trader is going to make every once in a while.
I did however trade for my own account as a full time occupation for a few years, and I guarantee you I did a lot better than twenty percent, but I measured most of my trades in minutes or hours, not in months or years. There is also a huge difference in having a million or even a few hundred million to play with than when tryinng to outperform the indices with billions. I can't remember which fund maager said it, but the quote was "It's hard to outperform the index when you are the index" lol
The only reason I quit trading stocks for a living was that I couldn't trade full time and run an oil company and there was more money, (in my case at least) being in the oil business.
and no you can be guaranteed of anything in the market, that's why most professional won't recommend that smaller investors buy single issues. If forty grand is that big a portion of your portfolio, that advice probably holds true for you as well.
I know for a fact that I don't accept investments from "small" investors anymore, the oil business if fraught with risks and the last thing I want to do is to lose some little old ladies life savings.
"I just need BOA to go up about 5 dollars a share and I can escape. Until then"
A good friend, a BOA IT employee for twenty years was whining in 2/09 about his 500k losses after lifetime investing in his company, while constantly harping about worry of lay offs.
He is hoping they go to 20 to break even. He bought heavy in the $40 years.
I knew very little about stocks, only occasionally investing small $$, though often wonder why some investors , sit back while their stock slowly sinks in value 90% , without any action.
I jumped in with over half my disposable savings , bought 5000 shares at 5.50 figuring the price was a steal.
I convinced myself they are too big too fail.
The junk went down almost 40% the next month, gave me an extreme panic attack. I would have bailed out and took my losses,but my friend convinced me they weren't going under.
I bought another 4000 shares in March 09 at 3.45 to help cut my losses, planning my hopefully soon get out..
I dumped all my BAC first week of May 09 ,at 11.50 against the advice of my broker, put it all in netflix at 45.50.
Less than a week later BAC was at 14.00 and netflix was at 40.00 . I scolded myself, my broker was a pro, I should have listened, but hung in there.
My broker advised take my profit, sell netflix July/2010 at 120.00
Again I didn't listen.
The last two months I have kept an eye on netflix "daily". To avoid anymore panic attacks, a ten percent drop from the high today, I will dump them them like hot toast.
made out like a bandit if you had waited till it hit $200. But even so you did very well.
And listen buying BAC at 5.50 and less took either brillant investing foresight or total cluelessless - if I had done that I would not be in the hole I am in now. But when BAC went under $10, I said no more.
"And listen buying BAC at 5.50 and less took either brillant investing foresight or total cluelessless"
I give all the credit to my friend who lost so much with BAC. He was adamant at the time, he would eventually recoup his losses.
To this day he buys BAC with part of every paycheck.
He was the person who convinced me they would go back up. Once I made some money on BAC I bailed.
My nerves couldn't take the volatility extremes.
My broker advised me to sell my netflix last July at 120 .I didn't sell any.
I sold two hundred shares a couple months ago, when I needed some extra cash.
If it hits 300 I will sell half .
sold my shares in January 2011 at about $17.00. The stock price then went up to $19.00. Still managed a profit of over 100 percent. However I do not see automaker stock prices improving. Unemployment is still above 10 percent and more importantly people cannot get credit. Commodity prices are also increasing and I see thin profit margins for automakers.
The I way see it, every industry the Feds have bailed out:
(1) Automakers with the cash for clunkers program and the bailout,
(2) Housing with the $8,000 tax credit the gov't was selling and Fannie Mae,
(3) Finanical Institutions with TARP,
are all going to lead this economy to a double dip recession. The infusion of government money, created an illusion of prospersity. Goldman Sachs made their money by getting free money from the Feds then charging the Treasury interest for borrowing. Goldman Sachs also made a tidy profit when the Feds bailed out AIG. Sorry buddy, but I see a house of cards. One puff and it will all go down.
-- Modified on 6/1/2011 10:56:07 PM
And I even gave you a hint. The gov't. has put, I believe, about $160 Billion in to AIG, and is likely to get very little of it back. You also could have used Fannie and Freddie as examples and been more correct. So harp on GM if you want, but, sadly, $14 Billion is chump change compared to the combined losses of these three. And, while it is still posslbe we'll make back the $14 billion from GM, there is no way in hell the HUNDREDS of BILLIONs in these other examples will ever be recouped.
Finicky, those losses don't count. It was under Bush and to Wall Street and didn't create any jobs.
Good thing you aren't playing partisan politics yourself.
The Treasury Dept had estimated that our losses on the GM loan could be as high as 60%. Now, given the fact that gov't sources nearly always present the rosiest possible picture, I was bracing for an even larger loss, so I'll admit I was wrong on that point.
But, we are still going to take a $14 billion loss on an $80 billion loan, putting our losses at around 18%. Not too shabby, but definitely could have been better.
Even still.....$14 Billion lost. That is a pretty hefty chunk of change. Gone. Do we all get a free car out of it?
What really gets me about this article, is the fact that this announcement comes as part of a strategy by the White House to portray this venture as a success. Well, I'm delighted to hear about jobs saved, or created, or however they want to spin it. But we just pissed $14 BILLION down the drain to save a private company from itself. That's the landscape here.
Under the plan, Chrysler will issue $3.2 billion worth of bonds to investors in two tranches: $1.5 billion in eight-year notes with an 8-per cent interest rate and $1.7 billion in 10-year notes with an 8.25-per cent interest rate. Chrysler also will take out $4.3 billion in new bank loans, including a $3 billion term loan and a $1.3 billion revolving credit facility.
Even with the repayments, Chrysler will still owe the U.S. government around $2 billion.
http://www.cbc.ca/news/business/story/2011/05/23/chrysler-government.html