Got a call from AMTD today. They are concerned about losing some of their best customers and what could they do. Talk about shutting the barn door too late!!!
Sentiment: Strong Sell
Can't see 10% of the trading opportunities with TA or TOS that I could with CC 2.0. Had to move to the least volatile position ever. This will hurt my profits and it will for sure hurt AMTD's profit. Are they COMPLETE fools?
Sentiment: Strong Sell
Please post more information on your transfer. I know I am one of AMTD elite customers, even had a special customer representative to manage my transition to Trade Architect or SinkorSwim. The problem is their new platforms are terrible! So I am going to be looking at another company also. Has this company ever heard of the "New Coke" or the Netflix fiasco of forcing your customers into something they don't want. The difference here is if we leave there is no coming back. It is permanent!
I am in the same boat. The alternatives to CC are not even close to providing the same functionality. I am going to check out the Scottrade product. Will probably move out of AMTD.
Sentiment: Strong Sell
Let me start with saying that I was Jamie's biggest fan when he took over 3 years ago. But at some point disappointment starts to creep in. Your contention of the difficult situation Jamie inherited is valid. However, he had many significant opportunities to address the bad hand he was dealt. First, remember the huge charges/adjustments taken in 2000 and some in 2001. ONE posted a loss of over $.5B in 2000 while taking a provision of almost $3.4B, took huge write-downs in the auto lease portfolio, and a variety of other restructuring charges. I know the flexibility of making restructuring charges has been reduced in recent years, but you have to admit ONE took a very healthy charge to offset most of the impaired assets they held. In addition, Jamie had an unpresidentd opportuninty to reset the earnings expectations on the Street, and he took full advantage of this opportunity. He also had almost free reign to change management and restructure the organization. I really thought that by now we would start to see some significant pay-off in performance. Instead I hear a lot of excuses. Any way you look at it this is not good performance. All the above is just my opinion.
I haven't done a lot of in depth research yet, but the impression I get is that bank stocks in general are reporting gangbuster results. What's up with ONE? I could understand if the miss was due to UAL, but that does not seem to be the issue. It would be a little lame to blame this on previous management after being at the helm for about three years. Didn't Jamie get CEO of the year last year? Hardly the type of relative performance you would expect. Just my opinion.
Okay I admit I am a moron. I listened to Cramer the last year and followed some of his recommendations:
-Bought Microsoft at 68 in January 02 based on his contention that they were going to report a great quarter and the stock was just ready to blow past 70.
-Bought RD a couple of times last year. What a disaster.
-Bought his stock of the week (SWKS)a few weeks ago when he recommended it. Watched it go from $10.50 to $6.50. How do I ever recover that loss?
-Jumped into the market big time right after Thanksgiving when he said something had fundamentally changed in the economy and it was ready to take off. It sure has - to the down side.
-Two weeks ago he said his number one stock to play in the next few weeks was IBM. Stupid me I bought several thousand shares and have just watched it tank from $81 when he recommended it to $77. Now he has apparently changed his favorite stock to HON. I think I will avoid that little tip. I can't afford it.
Bottom line is I thought Cramer knew something about what he was talking about. I am getting suspicious that he was more than a little lucky in being a fund manager in an unpresidented bull market but is totally out of his element in today's market. On Friday, he came out and emphatically said that NOW was the time to buy based on all of his tremendous experience and knowledge. Well I have had it taking his advice and am selling all the crap I bought on his recommendations and going short. Let's see if doing the opposite of what he says works.
All of the above is just my humble opinion.
I haven't checked out this board in a couple of months but did tonight. I made my year buying puts on this POS. Cashed out at $36 (pigs get slaughtered). I have fond memories of HLW3333 (what's with the name) spouting analysts with higher price targets like in the 70's (my recollection) when the stock was in the 50's. This is a clear example of how the investment banks are in bed with the companies that provide the cash. How in the world do you go from a price target of $70 to sell the company at $30 in six months? It is also a prime example of how some people like HLW get married to a stock/company. HLW will never admit that this was one of the biggest swan dives in recent history. You can't let emotions get in the way of investing. The fundemental and technical behavior of this stock was as bad as it gets. The stock just hugs the south side of the 20 day moving from May until the acquisition. Lessons learned.
All the above is just my opinion.
I have been following this company intensely for quite a while. I admit that I have a boat load of put options that are ridiculously in the money. Regardless of my financial interests, I think I absolutely have this company down cold (please check my prior posts). Here is what the future holds for HI:
In my opinion, HI will not be in business one year from now. I don't care that they have been in business over 100 years. Here are just a few of the things that in combination will bring about their demise:
* The only reason that HI hasn't blown up like some of the other subprime companies yet is due to their huge push to restructure/delay loan losses. The economy isn't getting any better soon and the customers that you have let slide on one, two, three payments and more are a time bomb waiting for recognition.
*HI bragged about their tremendous loan volume increase (>15%). It is absolutely insane to be putting on this level of growth to subprime customers in an economic downturn. The reason they are doing this is to help hide the true deterioration in the loan quality. New loans have the lowest delinquency/charge-off percentages until they are aged 9 to 12 months. As soon as the loan volume slows down just a little all hell will break loose with their credit quality statistics.
* A number of issues will cause the growth rate to slow in the next six months: 1)continued pressure from consumer regulation, 2)any uptick in interest rates, and 3) the secured debt market is just starting to react to the deteriorating secured subprime paper which will severely constrain growth.
You will probably see many analysts defend HI, but consider that HI provides a tremendous amount of investment banking fees for their debt securitization. When the fall comes, it will be fast, and it will be within a year from now.
COF has been put on a ratings alert by Fitch for their subprime activity. Despite beating this quarters earnings estimate, the stock is down over 10% today. Deja vu tomorrow?
You have no idea what the real earnings of this company are because of the financial shenanigans that have been allowed. So a multiple of any kind is meaningless. I think the very viability of HI will be questioned when the truth comes out. This will be caused by the massive amount of secured debt that HI has outstanding with implied default rates. Based on what is happening in the market and the amount of default that HI has deferred, the choice will be to either make the debt holders whole at a huge cost to HI's P & L or to screw the debt holders and be shut out of the credit markets. Either way, you have an Enron/WorldCom situation.
There is no support for this stock at this time. Look at any of trend charts on it. I would not even think of going long until I saw a week or two of stable and up stock moves.
I fully expect that HI is about to crumble. I believe that they have hidden billions of credit losses (with the help of their prior auditors: Anderson). Their new auditors are KPMG, and they will not want to hang for this company.
Haven't heard of the Wells merger, but it would be highly unlikely. First, since HI has pissed off numerous high profile consumer groups, the merger would be highly contested by the groups (must be approved by banking regulators). Second, the last thing Wells wants is to buy into a neverending series of ACORN protests at their branches. If you don't believe how hated HI is, check out ACORN's web site:
Andersen was HI's auditor until a few months ago. KPMG is the new auditor. KPMG already is under severe pressure from the SEC on two other audit clients that are in a world of trouble: Xerox and Rite Aid. Will HI be strike three for KPMG? The government was particularly harsh on Andersen because of prior audit sanctions. KPMG is basically in about the same boat with the SEC. When will we know if KPMG has signed off on the myriad of accounting issues at HI?
Here are the facts right from Multex:
Aldinger's pay was $6.5MM in 2001. Who cares how salary versus bonus breaks out. This guy has not taken a vow of poverty. He also is sitting on some $150Million in stock value.
When it comes down to making hard decisions on whether to adopt conservative accounting policies or those which continue to pump up HI's stock, which way do you think he will go? This company is an accident waiting to happen.