Value Investing News - WM - Comments

Hey man I agree with you

billytickets — Tue, 11 Dec 2007 16:31:40 -0500

Hey man I agree with you about USB or WFC

im doing good bud. Yeah

alexg — Tue, 11 Dec 2007 11:18:26 -0500

im doing good bud. Yeah major shareholder diulution,same goes for the other banks/insurance companies offering pennies on the dollar. It is tempting to buy into Wm, but I already have a position in USB which I think is superior to WM. Plus, it has performed better

Well this year had MANY

billytickets — Tue, 11 Dec 2007 10:57:38 -0500

Well this year had MANY great opportunities during the summer.It really is frustrating right now at these levels im on the sidelines >which sectors do u like to be long in Nick?which one's short?

HEY alex how you doing glad

billytickets — Tue, 11 Dec 2007 10:55:14 -0500

HEY alex how you doing glad u and I have escaped the "idiocy" of that other group of jealous haters who hated the fact I have done over 28% the last 3 years.lol

WM by offeringa prefeered will cause terrible dilution

No, but I often feel that it

Nick — Tue, 11 Dec 2007 10:43:21 -0500

No, but I often feel that it might be easier to select good short opportunities than good long opportunities. Then again the risk is higher I'm probably this observation smells of hindsight bias.

I think it will survive. I

alexg — Tue, 11 Dec 2007 10:29:35 -0500

I think it will survive. I say this only because it has a deposit base that will keep it up. I originally valued it at $60 but did not realise how big a mess they have on their hands. I was not surprised they slashed their dividend, do you think they will get capital infusion?
I still favor USB and WFC.

Hey nick do you ever short

billytickets — Tue, 11 Dec 2007 00:31:24 -0500

Hey nick do you ever short stocks? I have never done it in all my career i should have shorted the homebuilders

On another forum which i am

billytickets — Tue, 11 Dec 2007 00:26:06 -0500

On another forum which i am no longer welcome at I wrote a great piece on how this guy should have "swapped out" of it in the mid 30s and he posted tonight saying he finally lost faith.He is a very guy but i have never and will never invest in a financial

Nope but I've mentioned that

Nick — Tue, 11 Dec 2007 00:20:18 -0500

Nope but I've mentioned that I wished that I shorted it several times.

Anyone long this stock?

billytickets — Tue, 11 Dec 2007 00:09:35 -0500

Anyone long this stock?

Where is the Value in WAMU?

Nick — Sun, 25 Nov 2007 12:07:20 -0500

I haven't looked too deeply into WAMU (WM) since last year but, I'd be shocked if you couldn't find a better Bank to be investing in. I posted this on Motley Fool CAPS last December and the only thing that has changed in my mind is a 50% reduction in price and I still don't see the value:

"[Washington Mutual has a] weak Home Mortgage portfolio and with the second stage of the housing crash just starting the foreclosures will start mounting up. That and a poorly executed expansion in retail banking will eat into its bottom line. Look out below. The only way this is on the way up is if its bought out." -12/22/06

Where do you see the value? Where do you see the value relative to other financials or banks? If you had to sum up their competitive advantage what would it be? This isn't an unregulated toll bridge where they can raise prices at will. Their advantage is "Free, Free, Free" would their customers leave if they raised prices? Is their cost of capital lower than other banks? I admit that their dividend yield and P/E are very attractive, but I bet with a little patience you could buy CITI or another Bank at a similarly attractive valuation. Buffett likes banks and he chooses to buy WFC, BAC, and USB. What do you see that he doesn't? Maybe the $15B market cap is too small for Buffett?

This year there will be many acquisitions and I do think that this could be a great play if they are bought out. I am very interested in your response. I'm not a fan of WAMU, but I might have missed something and I would hate to miss the 11% yield based on my bias. Let me know what you see.

Disclosure: I work for a bank and WAMU is a major competitor. Unfortunately I didn't short WAMU and have no position in their stock.

Re: McGraw-Hill

George — Sun, 25 Nov 2007 10:17:40 -0500

McGraw-Hill owns Standard & Poors. A large part of the Standard & Poors business involves debt rating. It's the same business as Moody's. Both companies face potential litigation as a result of generous ratings to blended debt securities (CDOs, etc.). The market for debt rating services has also slowed down.

On another note, there is ever increasing competition in indexes. It seems like someone is coming up with a new index every day.

Regardless of these factors, I still believe McGraw-Hill has a wide economic moat and will be producing excess profits for years to come. The real question is whether the stock now trades low enough to provide a significant margin of safety.

The thing that concerns me

Ryan McParlan — Sat, 24 Nov 2007 22:42:30 -0500

The thing that concerns me is why is Mcgraw-hill so sold off. Am i missing something? Are students not going to class any more?

Re: WAMU

George — Sat, 24 Nov 2007 18:31:32 -0500

I'm very sceptical that Washington Mutual has really changed the way banks do business. How have they made banking fun? The only fun aspect of their banking I've experienced is their expensive advertising campaigns. Good marketing does not constitute a change in the way banking works.

WAMU

Teenvestor — Sat, 24 Nov 2007 12:51:49 -0500

Washington Mutual is a great bank one that has changed the way banks do business by making banking fun.

It's a good comapny, management has been there for a while and it has fallen off a cliff recently, the other banks you mentioned may be great companies but I don't know how undervalued they are, banks usually have low PEs.

This is a contrarian play, buying at the height of fear in the company, Morningstar says its value is $51 and it's trading for $18.