I’d like to talk about four companies in particular. BAC, WB, C, WFC.
These are the countries leading banking institutions and they are all down between 40% - 60% this year alone. WOW! Warren Buffett owns BAC and is down 50% +, Eddie Lampert is in C and is down 50% + as well. So, don't feel too bad, these guys have been wrong so far with these companies too.
Now does that mean they are screaming buys or screaming sells or just telling you to stay away? I would like to present some facts, data, and ideas that might help if you already own these stocks.
The biggest thing with each of these companies is the amount of debt they have and their operating cash flow. Here are some basic facts about each of them...
Market Cap
Revenue
Income
Cash Flow
BAC
86.96 B
52.01 B
10.61 B
26.84 B
WFC
71.37 B
32.26 B
7.81 B
3.86 B
WB
19.36 B
25.09 B
3.30 B
(9.08) B
C
79.43 B
48.99 B
(6.61) B
(51.43) B
Income
Debt
Total Cash
Book Value
BAC
10.61 B
613.39 B
335.30 B
31.27
WFC
7.81 B
157.16 B
25.24 B
14.45
WB
3.30 B
230.66 B
101.18 B
36.74
C
(6.61) B
840.32 B
921.60 B
22.74
Now, Jim Cramer would have you believe that The Danger is Immense on the whole sector. Just read a recent article from The Street.com. This is the reason I started typing again!
http://www.thestreet.com/_yahoo/newsanalysis/investing/10426463.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
One moment on good ole Jim Cramer; in 2000 he not only shunned investment methods set down by Benjamin Graham, but he proclaimed that internet related companies "are the only ones worth owning right now." These "winners of the new world" as Cramer aptly named them, "are the only ones that are going higher consistently in good days and bad."
It is this kind of SHORT SIGHTED mentality that does not produce wealth. What it does produce is risk, tax liabilities, and the occasion gain. As for Cramer’s favorites back in 2000… by the end of 2002, a $10,000 investment would have been worth $597.44 – down over 94%. How can anyone believe his opinion now?
The only reason I am even writing about this is because now there is a large audience following Cramer and his opinions on a regular basis. Unfortunately, when too many folks start really listening is when bad stuff happens.
In my opinion these financial companies are solid. With many offering good dividends and cheap prices and if can hold your nose and take your medicine then you’ll be better off down the road. Remember that investing is a marathon, not a sprint and if you’re looking to invest over a 10 or 20 year period, short term volatility should not scare you. It should excite you!
___________________________________________
Jonathan D. Poland is the Founder & Chairman of the PigsGetRich Investment Network. www.pigsgetrich.com
These are the countries leading banking institutions and they are all down between 40% - 60% this year alone. WOW! Warren Buffett owns BAC and is down 50% +, Eddie Lampert is in C and is down 50% + as well. So, don't feel too bad, these guys have been wrong so far with these companies too.
Now does that mean they are screaming buys or screaming sells or just telling you to stay away? I would like to present some facts, data, and ideas that might help if you already own these stocks.
The biggest thing with each of these companies is the amount of debt they have and their operating cash flow. Here are some basic facts about each of them...
Market Cap
Revenue
Income
Cash Flow
BAC
86.96 B
52.01 B
10.61 B
26.84 B
WFC
71.37 B
32.26 B
7.81 B
3.86 B
WB
19.36 B
25.09 B
3.30 B
(9.08) B
C
79.43 B
48.99 B
(6.61) B
(51.43) B
Income
Debt
Total Cash
Book Value
BAC
10.61 B
613.39 B
335.30 B
31.27
WFC
7.81 B
157.16 B
25.24 B
14.45
WB
3.30 B
230.66 B
101.18 B
36.74
C
(6.61) B
840.32 B
921.60 B
22.74
Now, Jim Cramer would have you believe that The Danger is Immense on the whole sector. Just read a recent article from The Street.com. This is the reason I started typing again!
http://www.thestreet.com/_yahoo/newsanalysis/investing/10426463.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
One moment on good ole Jim Cramer; in 2000 he not only shunned investment methods set down by Benjamin Graham, but he proclaimed that internet related companies "are the only ones worth owning right now." These "winners of the new world" as Cramer aptly named them, "are the only ones that are going higher consistently in good days and bad."
It is this kind of SHORT SIGHTED mentality that does not produce wealth. What it does produce is risk, tax liabilities, and the occasion gain. As for Cramer’s favorites back in 2000… by the end of 2002, a $10,000 investment would have been worth $597.44 – down over 94%. How can anyone believe his opinion now?
The only reason I am even writing about this is because now there is a large audience following Cramer and his opinions on a regular basis. Unfortunately, when too many folks start really listening is when bad stuff happens.
In my opinion these financial companies are solid. With many offering good dividends and cheap prices and if can hold your nose and take your medicine then you’ll be better off down the road. Remember that investing is a marathon, not a sprint and if you’re looking to invest over a 10 or 20 year period, short term volatility should not scare you. It should excite you!
___________________________________________
Jonathan D. Poland is the Founder & Chairman of the PigsGetRich Investment Network. www.pigsgetrich.com
