I don't want it, it does not enhance value, and it misuses cash. Purchase shares while at a discount to BV. That gives investors the highest return. With a high return, I can take dividends at any time I want by selling shares.
And speaking of RATIONALIZATION, yours is classic and indicative. You take a situation which is inherently UNSUSTAINABLE.
We can't have over 2 in 3 FPE students in repayment default, and that's what we are looking at (remember the 35% standard FPE hates?).
So the industry and people like you rationalize it this way. "But we have to protect the 1 in 3 students that will have a positive outcome." And with FPE being the worst and COCO being the worst of the worst FPE Company, this is like saying that there is no bubble in Phoenix because our home prices are only $500,000 and New York City has $2M average prices, so New York must be the bubble problem. And yes, that's exactly what people were saying.
Whenever you start rationalizing, start asking yourself why you have to drink kool Aid to make it OK. If you have to start even sipping Kool Aid, it's probably not OK.
Sure. Many made EXACTLY the same rationalization arguments about real estate, banking, mortgages, subprime, construction jobs, economic impact, and housing for minorities and less advantaged BEFORE, DURING, and AFTER the bubble burst / crash.
People are always blindsided. The worst is over. How many times did we hear that in 2007 and 2008 on housing?
Once again, we are only on the verge of the collapse and people like you are already talking about the turnaround. You are in 2006 and saying that all of the banking reforms are going to save housing from the collapse. OK. Understood. History repeats. The same mistakes get made in different contexts by different people.
Please read the Motley Fool article covering same subject, Title IV funding.
I don't know if you have heard, but we have all of the following in play:
1 Government financial crises. Budget issues.
2. A Student loan debt bubble ready to burst. This is being compared to the mortgage bubble with FPE funding being identified as the "subprime" component. Have you heard of any of these items or are they all new to you in Reality Free land?
3. Massive student failures where students are effectively bankrupt for life but can't declare same. Have you heard the ubiquitous (i.e. not isolated) stories of medical administrators making $30 per hour with $40,000 in student loan debt? Those of course are the lucky few ones that a) graduated - most don't, and b) got jobs. Do you think that the Government who is funding and thereby promoting these failures is just going to sit back and say whatever happens is private business? It is not. It is asymetrical capitalism at its worst!
So not only is Title IV funding at risk, the entire industry is at risk to be cut off from massive funds, regulated to the point of being chocked out of business, and sued by the Feds, States, Federal Agencies, and privately by students. You think the students in group 3 above are not at some point going to show up in court asking for damages to cover their life long financial problems?
Why? Let's get some clarity rather than have you create your own speculative Kool Aid:
1. Book value. COCO sells for one times tangible book value. Many stocks with much better stability and promise sell for that and less. COCO's stated book value includes pure fluff intangibles and goodwill which are worth exactly zero.
2. GS, Wells and WP. Do you want me to start the taxonomy of sophisticated investor, insider, and bank investment mistakes? Do you remember JP Morgan with its $6B loss? Paulson invested and lost billions recently in Gold. Apple? Where to start? The banks are lucky to have a 50% track record of gains vs. losses. Nobody on Wall Street follows this logic. This is you the amateur retail investor clueless and losses 70% of the time. That's the data you need to follow.
3. Panetta. Panetta is the ultimate last chance Hail Mary. Panetta like virtually anybody else, will go wherever he can be paid big bucks. Why COCO? He has no background in Education. Title IV funds at risk of going away - Think Subprime - the Government can't afford subprime student funding and now it is starting to make some noise about curtailing funding that has poor economic results. As such, COCO is in the worst position of major FPE and about to die. It needed a strong iconic lobbiest and somebody who could could a good face on a horrible track record Company sure to be the target and POSTER CHILD of every Government inquiry and push to reduce and regulate Title IV funds further. So the Hail Mary is launched. Not a good sign at all.
Remember when Wells rated Qualcomm a buy at $450?
I could do a full taxonomy of all of the folly, but there is not room anywhere on the Internet to hold the litany of misteps taken.
Enough said? What a bunch of CLUELESS lemmings. If the lemming plunged in front of me, and he seems smarter than me, then....here I go....
Good point Astral, and on it you are 100% correct. That said I want to do some math on the magnitude of that worst case Berkshire stock price fall risk.
Let's start out with the worst case. The stock falls the maximum in the shortest time period conceivable. If it fell from a current price of 1.41 X book value to 1.20 (the floor price given buyback) that is a 17.5% drop. That would take time, say a quarter and in that quarter the book value will increase another 3% based on conservative estimates. The railroads are not going to stop hauling oil for you to drive and nobody is gonna stop eating Sees Candy. So 17.5% - 3% = 14.5% less any "synthetic dividend created by selling covered calls. Let's say the call gives you 1%. Then 14.5% - 1% = 13.5%. So your net worst case scenario becomes a whooping loss of 13.5%.
No other stock I know offers you a 1% dividend and a maximum 13.5% downside risk. OK, don't believe me? Name one.
Reframe your question this way. COCO does not believe that 35% of its students should be required to be current on loan repayments. So they believe that less than 1 in 3 should have "student outcomes" that would allow them to repay debt. The corallary is that they believe that a greater than 2 in 3 failure rate is acceptable. Not that COCO management says that student outcomes are the company's #1 priority. If Apple said quality phones were its number one priority and 2 in 3 failed, would you say that Apple's rhetoric matched its reality? If your internet worked 1 in 3 times, and the service provide told you that was "normal and expected," would you find this acceptable?
What do you believe would define success in that context? Note that FPE has a failure rate 2-3X traditional schools even after they manipulate the situation playing every game to keep students current. If you are unaware of the scandalous games they are playing in this context, note that COCO is the worst offender. Find out what they are doing before you reply to this so you look at least a little informed.
First, choose one. Who has better information about COCO: Bankers or Insiders? Bankers bought the same shares insiders sold. Oh you might not see the data on insider trading reports. So if you believe that those same insiders did not trade in other account names or tip off their friends and relatives to make insider information trades which don't appear in insider trading reports, I've got some waterfront property in Saudi you really need to buy.
Second, COCO has stated that its number one priority is to clean up its act with a focus on student outcomes. So they naturally would be looking to put top education specialists on the board right? Apparently they prefer to put high profile lobbiests at great expense to shareholders to keep up the APPEARANCE of legitimacy to obtain further Government concessions in the interest of keeping the scam as is. Does this a million other Management inconsistencies, self-serving actions, self dealing, lies and deception make you wonder about the honesty and integrity of the information they are giving you? If it does not, please forward your credit card number directly to me, and I'll take care of all of your financial needs as a free to you service.
Wow! Who are these "powers that be?" Sounds like their sole interest is to scam you personally, even more than COCO management already is. Do you hear little voices in your head giving you this privy information? Sometimes I do too, but usually I try not to tell other people.
Because you as a shareholder are paying him big bucks so Management can protect its high salaries and self interest dealings at your expense while giving the appearance to you and others of legitimacy. Keep drinking the Kool Aid they are serving you. Pretty soon, you'll be opening credit card debt just like the students to try to keep the scam against you going.
To your points:
1) Ever hear of a concept called writing style? The rest is just your own personal interpretation and self-created drama thereof. Clearly, you don't like my repeating your CEO's message to you, and the Kool Aid effect is diminished when the messenger is someone other than the Kool Aid server. That's a personal problem. Don't shoot the messenger.
2. More Kool Aid self served. Speaking of drinks. Remember Clearly Canadian? They were #1 and almost a monopoly at one time in the fruit flavored sparkling water segment. Then they were #1 in the natural fruit flavored water segment. Then they were #1 in the served in a bottle fruit flavored water segment. Then they were #1 in the select flavors served in a bottle fruit flavored water segment. Then they were #1 in the carbonated alternative select flavors served in a bottle fruit flavored water segment. When they went out of business they were still #1. Do you see any parallel with the Kool Aid being served by your management here?
3. Of course I won. Not only did COCO not go up as you predicted, it took a healthy dive. Exact opposite. Everything you postulated turned out to at best be non-existent, at worst be completely contrary. That's the nature of Kool Aid. The more you drink, the more you believe, and the more you believe the more you want to drink. And then when you can't get enough from the Company, you start making and drinking your own Kool Aid,. That's when things go really awry, and we saw a good example of that right here with your outrageous and completely unfounded postulations all that ended up making you look like somebody in his own personal fantasy completely detached from all known reality.
4. Now the manipulation theory starts. Do you know about supply and demand? It actually works the same in the capital markets. And in addition and even more importantly, the sellers are clearly insider based information tipped off sellers who knew the bad news was comin
Who says I care? I am paraphrasing exactly what your management is telling you, almost verbatim. If you don't like the Kool Aid, talk to management. This is their information to you as a shareholder.
Now the Kool Aid drinkers are making their own Kool Aid and drinking it!
Let's disregard that for every buyer, there is an equal seller, likely in the case of Wells, GS, and WP buying, an insider or a insider friend, relative, or related was tipped off to upcoming earnings miss and sold to make room for the new sucker to enter.
New suckers are born every day, and they keep making the same stupid mistakes as the old suckers all the while invoking whatever story supports their stupidity.
Aren't you the same guy who said mark my words $2.50 by this week. We really need to listen more to you. Obviously doing exactly the opposite of what you suggest is a winning formula.
#1 topic at conference call was student outcomes, which management uses as an excuse for losing money which includes $3M CEO salary. We are paying that much for student outcomes? OK, so we sacrificed shareholders financial interest for student outcomes. How much good did we do? We lost enrollment and nothing is said about those outcomes. Not a single good data point about job placement, starting salaries, graduation rates, etc. All we hear is that we are going to start another 100+ losing academic programs when the academic programs we already have are not working already.
What a JOKE! Does management think its shareholders are that DUMB? Apparently they do and they are!
As Jamie Dimon puts the final touches on JPMorgan Chase’s latest earnings report, scheduled to be published on Friday, the bank’s own analysts are raining on his parade.
In a report on the global investment banking industry, the firm’s analysts cut right to the chase.
Many of the world’s largest investment banks are likely to offer investors paltry returns for the rest of the decade. And uncertainty caused by rising regulatory costs means investors should shy away from banks that combine complex trading activity with more mundane operations like retail banking. For the analysts, the investment advice is simple.
“We see Tier I investment banks as un-investable,” JPMorgan’s banking analysts wrote in a report to investors on Thursday. “The viability of running a global Tier I investment bank business as part of a universal banking business is starting to be put in question.”
The report singles out Goldman Sachs and Deutsche Bank as ones to avoid, and did not specifically say to shun JPMorgan. But the 300-page report will make for some uneasy reading for many of the firm’s senior managers.
Always inventing their own reality, investing on nothing more than Kool Aid stories, and undeperforming the market 70%+ of the time. This message board tells you all you need to know about such folly.
Yes. The Kool Aid is real. Real Kool Aid. Nothing artificial. Pure 100% real natural Kool Aid. Keep drinking it, and supporting the scam.
You are not only watching the rape, you are helping the rapists.
Must be wonderful to be an idiot and have no morals.
Just one request. When you lose your money, don't cry foul. You did this to yourself.
Dude ...it is not rocket science... the Kool Aid sayers have been saying "stabilizing, revenue growth, profit growth, cost control" for a long time now, all the industry has been and continues to experience exactly the opposite.
Drink the Kool Aid. Ignore the facts that students and the Government are now on high alert and not buying in. Without them and their ongoing participation, the Kool Aid is just for people like you who "WANT TO BELIEVE." You are an amateur.