A world class brand , and on the way up .
That is still not a reason to buy . But the currency theme is still not digested by the market.
So let us do the numbers ,
80Billion $ in sales . There were one time charges last year , so there was a loss .
If you take out the one time charges assume 0$ profit last year . ( It will be slightly positive after taking away the one time charges ) .
But let us be pessimistic and say 0$ profit if they were to continue, this year without the currency changes .
Now the currency has already depreciated about 20 percent .
Sony is one brand where most of the design and manufacturing is in Japan . Not so for the car companies .
so imagine a 20% reduction in cost on the currency basis . let us assume only 15% because some employees are overseas .
That would be a profit of 6billion $ . So at a forward pe of 7 , which is extreme value .
The stock would be valued at market capitilization of 42billion $ .
That would put the stock around 42$ , as they have about 1billion outstanding stock . And at 16 the market capitalization is 16billion $.
So a very conservative value for sony at this exchange rate is 42$. The market will soon react to this if the exchange rate is sustainable.
would be interested to hear any other views .
Sentiment: Strong Buy
He has not revealed all his cards yet.he is deliberately doing that he probably has all the testimony and he knows herbalife will come back with some stuff on the seventh the next day he will come up with all the damning testimonials
A dose of reality for both
I have read all the pages of the 300 plus document . Everyone should read it to get their own perpective.
Bill Ackman is wrapping around himself in patriotism and he is most probably hedged in his bet . And also he is being very generous with charity as a hedge too . Just in case to make it look his bet is not for his profit .
Having said that , he seems to have proved like provind Euclid's Geometric theory arguments that by the definition of FTC it is clearly as pyramid scheme where more than 50% revenues comes from selling distributor ship . By that definition I am not sure how FTC cannot investigate the company .
Bill Ackman is a very smart man . It would be futile to bet against him . He is not claiming the products are horrible . He is saying that by the definition of the FTCs own standard it is a pyramid scheme .
Sentiment: Strong Sell
I am waiting for FB to be fairly priced a PE of 5 . which is 1$ at the current profits.
Zuckerberg got married , and he did not inform any one on facebook .
And u users inform every one , every trivial information about you .
He became a billioniaire using your weakness of giving your information away for free .
Banks to the American Tax Payer :
Heads we win , tails you loose.
e.g.(If Banks make profit , we deserve the Bonus )
Banks senior Management to the rest :
Heads we win , Tails you loose .
e.g. we set in place the trading strategies , so the higher management deserves bonusus
Jamie Dimon to the Senior Management :
Heads I win , Tails you loose.
e.g. ( If you would have won 5billion dollars in the trade , I would have been the first in line for the reward . But since the trade lost money , you traders loose your jobs , if it gets worse a lot of employees will be fired , if it gets really , really worse the bank will go under and then we can use the too big to fail to influence washington for bailouts )
Isn't it a great system .
are they really . yes and no .
only in terms of regulation .
yes the deposits would be safe because of FDIC .
No as far a equity and bond holders . The losses from these would wipe out the equity holders and bond holders if the losses are large enough .
But currently it may not be very large .
So it is only half truth
correcting a typo does not make you the smartest . My 4th grader can do that or a spell checker can do that
In March do you know his statement " it is tempest in a tea cup" those are the facts , and then he said the rest on Thursday .
if you really think you are the smartest please go ahead and buy calls stocks , no one is really stopping you .
It certainly appears you think you have a belief you know more than others . Please go ahead and buy JPM it is a great buy .
you will be really happy a while later !!!
why would you think they won't say it . Any clues ?
First he did not know what was going on and it was a tempest in a tea cut , then it became 2.3billion loss , and if you paid attention he said terms like "egrigious " if you know these are hedge words to come back for higher losses .
If 3b is the maximum loss then why would he not clear it away . Ambiguity always means more to comes .
Always happened before especially with Banks . Do you remember Bear stearns , do you remember Lehman , do you remember AIG every single time the CEOs said everything was ok.
why else would he use words other than to hedge himself , "egrigious" and "stupid" , and was contrite . The whole conference call needs to be listened again and again to get more clues
So my friend bimmyboris ,
Understoood , here is the problem with that line of reasoning . They did not buy those CDs, in which case that cds premiums would have been the maximum loss . They actually sold the CDs , which actually means there is a huge tail risk . In otherwords most probably everything will be alright . But in the small proability something goes wrong they are on the hook for a much larger loss .
To explain the analogy it is like selling hurricane insurance on a big area thinking the probability of that happening is 1% . so if you sold insurance for 10 million dollars , since the probability of happening is only 1% , the expected loss is .01*1 million , so the expected loss is only 100k .
But when the 1% event occurs , you have to pay 10 million dollars . And from what I am gatering from everywhere is that there is slight hedge but they have to wait till this time expires with this sword of europe hanging on their head as they cannot buy it back at any reasonable price the insurance back as no one is selling it back .
or in otherwords if you buy a stock the maximum loss is the price of the stock . If you go short a stock and everyone else knows it , they could get the price so high that you could have an unlimited loss .
So they don't have this excess as the max loss is what I am trying to say .
The expected loss may wary significantly when a low proability event occurs . This is the precise problem.
Hope it is making sense for you
I am glad that you understand the excess deposit and smarter than every one on the board . Good for you .
This is exactly what the big whale thought before taking those bets , i am smarter than everyone else . Jamie Dimon still thinks the same . so did the ceo of Bear stearns , Lehman all of them
Please read Jason zweig's article today in wall street journal today .
"The smarter you are , the easier it is fool yourself" . The fact of the matter is it is a risk , every one is trying to do a best guess with the fact available to them . Usually in the past this kind of statements always follow worse statements .
Look at the trajectory of the story so far
1. when bloomberg went aftter the story in March , Jamie said "it is tempest in tea cup"
2. yesterday it became a 2.3 billion loss
do you seriously think the worst case is 3 billion , if that is the case he would have revealed the position to quell the rumour.
If the system allows a banker to play with other people's money and there are people are fooled by this , we can't blame the bankers that they are taking advantage .
In other words as long as we have a system where " heads we win , tails you loose " , when there are profits they make great bonus , when there are loses they can put it to the us tax payers .
every smart banker will take advantage of this . They are human . The US has to cutdown the incentives for this behavior .
That is the only way.
Either you are a depository bank or a investment bank . You choose if you are depository then you can't take these risks . If you are investment bank then you can do what ever you want . Govt does not have to spend any money on regulation . Because it is really useless and the ceo's like it any way . But there will never be a bailout and everyone take their losses if bet goes awry .
Glass steigel is the answer
The reality is there is no one on the other side of the trade . So the market is now illiquid and JPM is now exposed to tail risk . And it really does not make a difference if it is paper or real . As once this position is now clear to everyone , the hedge funds could try to put some of those companies out of business .
If you bought your house for 500k and now it is 400k , 100k is loss ,wheather you sell the home now or hold on . The loss is real this very second . May be later it can go up or down . But as of this minute it is a loss and a big loss.
Dimon if he is true that the loss is only 2b$ , to prevent all rumours he would reveal the whole position . If he does not do that rumours will circulate and there could be bad ramifications . Just like we had a run on the bank on Bear stearns or Lehman .
Monday is going to be interesting
even though we don't know . As we know the MBA types . This most probably is true , the figure is about 8 or 9billion
If it was only going to be 3 billion
1. My guess is they may not have said anything
2. They are scared in their pants that unless they say something there may be criminal liability
3. usually with all this it starts small as they still believe that may be there is a chance that we will recoup the rest .
My logic and history tells me this is uglier than it looks
If you have so much conviction . Buy some calls at 50$ , you will multiply your money many folds . You can use the same strategy of leverage as the banks . And let us know in some time how it works out.