Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 6
I thought we had it but didn't realize it was the portfolios second largest holding. It'll be interesting to see what WEB says about banks in general and BOA at the annual meeting.
Watching a bit of the crisis in Europe where authorities urged UBS to take over CS reminds me of Lloyd's and HBOS... The last time I ever owned a bank. Luckily I sold early (lucky) but shareholders lost out badly, (usually retirees for the dividend and pension funds). I put banks in the too hard pile back then and it looks justified now.
No. of Recommendations: 7
No. of Recommendations: 1
I've been watching some commentary of the Superinvestors who like financials. They refer to BOA as "best in class and most well managed" they are beating the drum at 8x earnings and reading at par book value. Ie buy now.
However.
Going back 20 years I remember reading a bit of David Dreman and he loved investing in Banks, earnings went negative and you could pick the banks up at the low point for c50% of book value in the 90's case studies and also during the GFC. Some way to go yet, book value is c$30, so $15 dollars perhaps? Might put it on a watchlist for an allocation.
No. of Recommendations: 5
I have given up on investing in banks. They go through an existential crisis every decade or so and shed years of capital gains. Even their dividends and share purchases are limited by regulators. After the current crisis, stress tests and capital requirements will get tougher. I believe banks have become uninvestable for the average investor like me.
I believe financial services firms like BlackRock, American Express, S&P Global, Broadridge are lot safer and likely to give higher total returns, even if they are valued higher than banks on PB or PE. As are insurers and insurance brokers like MKL, WRB or PGR.
No. of Recommendations: 0
And then you get visibility into "banks" like FRC, which based on the reporting in today's WSJ is an extended family enrichment machine - tens of millions of dollars annually going to the CEO and his in-laws, cousins and buddies all on the "executive team". Taking full advantage of ZIRP, but now getting deservedly crushed. As Rational said, "anyone who looked at the [complex] proxy would have seen this coming".
No. of Recommendations: 0
I've concluded the same in all honesty. I post on here to get counter view points, hence posting both sides of the argument. When there's other opportunities why bother.
