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BB&T Corporation Message Board

  • npolackw npolackw Dec 14, 2007 8:49 PM Flag

    Bill Miller on Buying Down

    For those that didn't see it, Jason Zweig interviewed Bill Miller in Money Magazine at http://money.cnn.com/2007/07/17/pf/miller_interview_full.moneymag/index.htm

    The part of the interview that pertains to BB&T, which I enjoyed was,

    "One of the things that we have always done for the 25 years that I've been here, and my 90-year-old partner Ernie Kiehne did for years before that, is what he has described as "throwing good money after bad."

    You know, Bernard Baruch said nobody buys at the bottom and sells at the top except for liars. So what follows from that is, if you're not buying at the bottom and selling at the top, then that stock will go down after you bought it. And it will go up after you sold it. Because if it doesn't do one of those things, then you bought at the bottom, and sold at the top.

    Question: In which case you're a liar.

    Answer: Right. So you need to understand that your stock will go down after you buy it, and it will go up after you sell it. On average over time.

    But what you want it to do is go down immediately after you bought it, and be lower then. You don't want it to be lower three years, or five years, or ten years. If you understand this, then the strategy of being willing to lower your average cost [by buying more when a stock drops] is a great strategy."

    Now Miller has been buying the financials all the way down and getting his ass handed to him. I recall he did the same thing with AMZN and AES to name a few, and the strategy ultimately worked out spectacularly. But you certainly have to pace yourself when averaging down (particularly in a bear market, which the financials are undoubtedly in), because you can expend all your capital fairly quickly. Markets can stay irrational longer than you can stay solvent, as Keynes said.

    I'm about half way in what I expect to be my ultimate committment to BB&T and my average cost is about $33.50. I'm thinking I'll add about 25% of what I already have for every three points I lose (should that occur). Should the stock tread water, I'll add the 25% every month or so. If it runs up on me then oh well, I only got a half position. Just thinking out loud.

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    • Perhaps you could follow your own advice, however, I know you can't

    • TheStreet.com Power Stock Rankings

      By Patrick Schultz
      RealMoney Contributor
      12/17/2007 3:02 PM EST
      During the week of Dec. 10, TheStreet.com readers searched for these 10 stocks more than any others.

      2. Citigroup (C - Cramer's Take - Stockpickr - Rating): As expected, Vikram Pandit was named CEO last week. What I didn't expect was the new CEO's poor, almost laughable performance on the subsequent conference call and CNBC interview. I have dubbed him the Whitney Houston CEO detailed here . I am changing my take on Citigroup until the company acknowledges the real issues facing them right now. Pandit's lame strategy and action items make me think of Citigroup as a bunch of sailors lost at sea. -- SELL

      8. Countrywide Financial (CFC - Cramer's Take - Stockpickr - Rating): As your mother once told you, don't play with fire. I am applying that very basic and simple rule to CFC. -- SELL

      10. Banc of America (BAC - Cramer's Take - Stockpickr - Rating): The financial sector is just ugly, seeming to hit new lows every day. In fact, BAC just hit another low as I was writing this Monday. Down and down it goes, where does it stop? Nobody knows. -- SELL

    • Oh and you left out the BAC bonuses grants etc. You are aware folks other than BBandT get those

    • Appears the only one who doesn't understand is you

    • I'm down 22% and the only thought I have is the following:

      If BBT hits $30, I will be doubling up.

      Nothing like buying high quality. nice yield to ;)

    • Sorry, got the tone of the discussion wrong.

    • You posted the following "The difference between good consistent long term leadership of BBandT, which is STIL not sold or MOE, and led by JA, and companies like the below, and BAC, etc, that have been consistently pumped by self appointed experts ih nere is very adaquately explained by:" This was not a quote nor was it a cut and paste. You added BAC. If someone else has stated this you did not give them credit for the quote nor reference where to find it.

      The point is still that you tried to mislead this board. As I proved BAC was the better investment during the time frame you chose.

      As to the billions in losses BAC still has put more money into their shareholders pockets during the time frame you specified.

    • I notice you left out billions in losses, and again, I'll go slow this time, I posted what someone else said and thinks, I havent been proven wrong on anything. Maybe you should write them and protest. We report, you decide

    • You were the one that brought BAC into the post. The article you cut and pasted did not state anything about BAC. I thought you were the one that always tells other to do their own research, but I took your challenge in comparing BAC and BBT. Took a quick look and this is what I found on AOL and Yahoo.

      If you had bought BAC and BBT' stock on 12/31/1998 this is the results you would have had including dividends.

      BAC $13.875 in dividends plus $10.64 in stock appreciation for a total return of $24.515 or an 81% return on your investment.

      BBT $11.07 in idividends and a lost of $7.77 a share for a total return of $3.30 or a return of 8.1% since 1998.

      My intent is not to impend on anyone's free speech, but just to try to get some people to tell the truth. If you are going to post comparisons at least try to be truthful.

      You tried to do the same thing with WFC and were proven wrong.

    • What you may consider argument is merely chat to another. I love talking about BBandT which is STIL not sold or MOE, led by JA, it's on my lsit of comaprings repetitives, like two types.

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