I don't know how I missed this. Jamie Dimon lays out a summary of the banking crisis so well, his letter should be required reading for all investors and business students:
http://investor.shareholder.com/jpmorganchase/annual.cfm
From page 23: We believe our nation can and should be able to provide health care coverage for all. It is the right thing to do, it will help us build a stronger nation, and, if done properly and efficiently, we believe it ultimately will be cheaper than the current course we are on.
I love the fact that Dimon is for subsidized health care coverage. Almost anything seems better than our current system, which has created massive future entitlements while failing to cover millions of Americans.
Let's not forget--according to most reports, Sandy Weill, the former CEO of the now-disgraced Citigroup, didn't get along with Jamie Dimon. Mr. Dimon should be quite happy how things have turned out.
More on how to avoid another banking crisis here.
"And if an epitaph be my story, I'd have a short one ready for my own: I had a lover's quarrel with the world." -- Robert Frost
Showing posts with label JP Morgan. Show all posts
Showing posts with label JP Morgan. Show all posts
Sunday, May 3, 2009
Monday, April 27, 2009
Institutional Analysts are Almost Worthless
On December 18, 2008, I bought Maxim at 12.00/share and told my readers about my buy. Maxim is now selling for $13.70/share--a 14.1% increase in four months. The S&P 500 declined 3.1% during this same time period.
At the time I bought Maxim, JP Morgan disagreed with me. On December 16, 2008, JP Morgan's Christopher Danely downgraded Maxim stock to "underweight." In response, I wrote, "Almost all these these analyst downgrades come after the bad news has already been released. Consequently, when a major firm issues a 'sell' or 'underweight' rating, that's when contrarians and value investors should take a closer look at a stock."
My call was obviously correct, but what's really frustrating is that now, after the run-up in the stock price, several analysts are recommending Maxim.
On March 14, 2009, Canaccord Adams upgraded Maxim. Maxim's stock price was $14.05/share.
On March 15, 2009, Citigroup (C) upgraded Maxim. Maxim's stock price was $14.12/share.
If you had listened to these two analysts, you would be losing money right now. I don't disagree with the analysts' upgrades, assuming a long term horizon. I still think Maxim is somewhat undervalued, but I have considerably reduced my holdings and am waiting to re-enter at a lower price.
I continue to be skeptical of institutional analysts and their ratings. We need an independent website that ranks firms and their analysts based on their actual performance over three, twelve, and twenty four month horizons. The website should follow various analysts and rank them based on stock performance following an upgrade or downgrade. Hedge funds or well-off investors have access to such information, but the ordinary public is left in the dark when ascertaining analysts' credibility. That's a shame, because the public's relatively short term memory allows most analysts and their firms to avoid accountability. The Motley Fool has tried to create something along the lines of what I've suggested, but it doesn't track professional analysts.
I have been told that FusionIQ's proprietary software does rank analysts. I have been given complimentary access to the software, but have not had the time to actually sign on and evaluate it. I hope to provide a report on FusionIQ at some point in the future.
Disclosure: I own Maxim shares, and a family member works for Maxim.
At the time I bought Maxim, JP Morgan disagreed with me. On December 16, 2008, JP Morgan's Christopher Danely downgraded Maxim stock to "underweight." In response, I wrote, "Almost all these these analyst downgrades come after the bad news has already been released. Consequently, when a major firm issues a 'sell' or 'underweight' rating, that's when contrarians and value investors should take a closer look at a stock."
My call was obviously correct, but what's really frustrating is that now, after the run-up in the stock price, several analysts are recommending Maxim.
On March 14, 2009, Canaccord Adams upgraded Maxim. Maxim's stock price was $14.05/share.
On March 15, 2009, Citigroup (C) upgraded Maxim. Maxim's stock price was $14.12/share.
If you had listened to these two analysts, you would be losing money right now. I don't disagree with the analysts' upgrades, assuming a long term horizon. I still think Maxim is somewhat undervalued, but I have considerably reduced my holdings and am waiting to re-enter at a lower price.
I continue to be skeptical of institutional analysts and their ratings. We need an independent website that ranks firms and their analysts based on their actual performance over three, twelve, and twenty four month horizons. The website should follow various analysts and rank them based on stock performance following an upgrade or downgrade. Hedge funds or well-off investors have access to such information, but the ordinary public is left in the dark when ascertaining analysts' credibility. That's a shame, because the public's relatively short term memory allows most analysts and their firms to avoid accountability. The Motley Fool has tried to create something along the lines of what I've suggested, but it doesn't track professional analysts.
I have been told that FusionIQ's proprietary software does rank analysts. I have been given complimentary access to the software, but have not had the time to actually sign on and evaluate it. I hope to provide a report on FusionIQ at some point in the future.
Disclosure: I own Maxim shares, and a family member works for Maxim.
Friday, September 26, 2008
WaMu: No Safeguards Lead to Collapse
I have accounts with WaMu and am happy that JP Morgan has taken them over. JPM's James Dimon has the respect of many investors and Wall Street, and thankfully, my deposits are safe at WaMu. I just read this article in a legal magazine about WaMu, and it's no wonder the bank collapsed. Take a look at this story, where WaMu gave 43 loans (25 million dollars) to one couple, revealing a complete lack of safeguards or risk controls:
http://www.abajournal.com/news/1_family_43_wamu_mortgages_27m_in_likely_lender_losses
If the Fed is correct--that it is buying undervalued securities that will eventually increase in value when the real estate market stabilizes--then JPM would be a good buy. In effect, JPM has partnered with the Fed in its new debt issuance and stands to gain or lose like the Fed. I had considered buying JPM stock, but the stock increased 11% today. It looks like I missed the boat.
http://www.abajournal.com/news/1_family_43_wamu_mortgages_27m_in_likely_lender_losses
If the Fed is correct--that it is buying undervalued securities that will eventually increase in value when the real estate market stabilizes--then JPM would be a good buy. In effect, JPM has partnered with the Fed in its new debt issuance and stands to gain or lose like the Fed. I had considered buying JPM stock, but the stock increased 11% today. It looks like I missed the boat.
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