I have just closed out my positions on PFG (roughly $20 down to about $6.80) and HIG (about $30 down to about $4.50). I have better things to do with the money (see my recently released research) and they are both trading in the mid single digits. As a result, I am releasing the most recent research reports to free registered users so you guys can see what you have missed out on (you still have to register and choose a free subscription).pfghigchart.gif

I'll be releasing 2009-to-date performance figures for my prop account as well as the blog research soon.

The Forbes.com article ("Going Short", March 01, 2009) had two (admittedely minor, but I'll correct them anyway) errors in that it stated that I tripled my money since the blog inception. I tripled my money for the one year period ending 2008. Absolute raw returns since blog inception till today (about a year and a half) is currently 670% for my prop account (the reporter had no way of knowing this, but I thought I would mention it anyway). It also stated that I had wild swings between profits and losses. I am assuming the reporter misread the graph. I had one aggregate down month for the existence of the entire account. The graph that he was probably referring to was a monthly return graph, not a cumulative return graph. See below:

Click to enlarge to print quality



reggie_monthly_results_explained.png


Below are the raw, absolute returns for my proprietary account. These
returns are calculated by calculating the difference between my
starting point and ending point, and is the number that I use for
comparison (since it is the number that shows how much money I actually
made).

Reggie's gross avg. return S&P return
For all 2007 (6 months)
42.93% -8.23%
For Q1 2008 50.03% 0.68%
For Q2 2008 53.46% -8.66%
For Q3 2008 32.40% -8.30%
For all 2008 196.11% -8.69%
Since inception (to 1/9/09)
481.04% -35.72%
2008 absolute return 335.42%
Correlation
to S&P 500
-61.02%
Correlated
Beta
-2.26

My risk adjusted returns actually show I took significanly less risk per unit of return than just about everyone that publishes results on the web! Just had to set the record straight! I really did enjoy the article though. I thought it was well done (corrections excluded) and a good read. Here are the free reports:

document 10/25/08 Insurance Industry Update - Professional w/inventory addendum 2008-11-22 06:27:52 7.50 Mb

pdf Hartford Insurance Group Forensic Analysis - Pro 2008-11-22 06:30:43 619.29 Kb

pdf Hartford Insurance Group spreads and counterparty/debt holders - pro 2008-11-22 06:31:47 149.00 Kb

pdf Principal Financial Group Actionable Intelligence Note - Pro version 2009-02-23 09:13:39 252.74 Kb

And now, a word from our sponsor...

I have been planning to raise the prices of the subscription by (last)
Monday, but it came to my attention that some may be struggling with
access to the lower tier as it is, particularly considering the economy
and employment environement. I vowed I would attempt to keep access as
open as possible, but I also have bills to pay (a whole lot of bills).
So, I will postpone the price increase for oen week (till at least next
Monday) to give all non-paying members a chance to jump on board.On
that note,
Ms. Jennifer Keeley hinted that I share her email with the blog:

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Dear Reggie,

I have been reading your blog for over a year now, but
only yesterday did I decide to become a subscriber. I'm just an avergae individual investor
trying to navigate the bear market from my home computer, but I was able to pay
for my subscription within 3 hours of the market open with some XXXX [the most recent banking actionable intelligence report] puts (now
up 25% and counting.) So, a hearty thank you for all your hard work and feel
free to use me as an example for anyone on the fence re: subscribing.

Jennifer Keeley


Thank you, Jennifer, for the willingness to share your esperience. Has anyone else had the good fortune to quickly recoup their subscription fees from the research herein? If so, please share in the comments section below. BTW, I told you that last banking one would be hot.

Published in BoomBustBlog

Here is the Actionable Intelligence Note for this month. This one should be profitable for those that can get into it. I don't see a rosy reporting period for this bank at all.

I will include some additional portfolio detail for professional and institutional subscribers soon.

pdf March Actionable Note - banking sector 2009-03-03 11:06:41 184.25 Kb

Published in BoomBustBlog
Sunday, 01 March 2009 23:00

Actionable Note Preview for Subscribers

I am releasing an Actionable Intelligence Note tomorrow on a lesser known bank, but the price deterioration has turned decidedly violent, so I will release the ticker and value band to subscribers today with the promise of the actionable note tomorrow. Beware of violent price action and pullbacks.

March 2nd Actionable Note Preview - banking March 2nd Actionable Note Preview - banking 2009-03-02 09:44:20 61.88 Kb

Published in BoomBustBlog
Friday, 27 February 2009 23:00

The Wynn Resorts Full Analysis is released

Here are the reports with valuation bands. As is usual, the professional/institutional reports give the complete macro argument in addition to the fundamental assumptions that went into the model that calculates the valuation.

They haven’t released their 10k yet, so we are still running on our internal estimates for much of the Balance Sheet stuff. I have to admit, in reviewing the earnings call transcript, Steve Wynn didn’t bitch and cry like the management of many other companies that I have shorted – making excuses for their lack of performance. He stood tall like a man and honestly said they had a horrible quarter. This goes a long way in conveying a sense of honesty and accountability from management, at least in my eyes. Compare him to the behavior of the management of BSC, MBIA, LEH, GGP, etc., who blamed their companies abysmal performance on a whole plethora of third parties (somehow the C-suite crew gets absolved from responsibility) and state that the market doesn’t understand how to value their business despite the fact that they had clearly been losing money and asset value for quarters stemming from binging at the punch bowl of inflated credit spigots and out of control asset prices.

pdf Wynn Resorts Forensic Valuation Retail 2009-02-28 18:57:59 147.47 Kb

pdf Wynn Resorts Forensic Valuation Professional/Institutional 2009-02-28 18:56:42 322.47 Kb

pdf

Published in BoomBustBlog
Thursday, 26 February 2009 23:00

One of those "I told you so's"

Quite few people have emailed me asking, some a
little less politely than others, how is it I come to the conclusion
that XYZ company is insolvent when all of the "highly paid",
"professional" analysts and pundits on the street come to a totally
different conclusion. Well, , I think we should judge credibility by
track record.
For those who either forgot or didn't know, I have taken the liberty to compare my record with those of the "Street" just to set the record straight. See Blog vs. Broker, whom do you trust!.

Please click the graph to enlarge to print quality size.


image005.png

I also get emails saying,
"You alleged blah, blah about my favorite company, yet I am sitting
here with XYZ 10k right in front of me and I don't see blah, blah,
yada, yada! How is it that you have the right to spread falsehoods and
rumors about so? You should be ashamed of yourself
". Well, my friends, just because you don't see something doesn't necessarily mean that it is not there. Often, you have to look past and beyond just a 10k. You also have to scan every word of every footnote. I was challenged by many on my accusations of JP Morgan's solvency, primarily by those who had a problem reconciling the fact that JPM was carrying a much larger amount of NPAs on its books than the 10k's and 8k's apparently stated. Well, they stated just what I said, they just couched the statements in a language that they knew would fly over the layman's head. Well, you can only do that for bust so long before I catch' ya. And voila, these are the last two articles that I wrote concerning JP Morgan over the last 30 days or so!

Of course, paying subscribers are offered plenty of
proof to back up my assertions and allegations, but then again, they
are paying, aren't they?

pdf JP Morgan Q408 quarterly valuation opinion - Retail 2009-01-22 08:49:26 79.24 Kb

pdf JP Morgan Q408 Quarterly opinion with sample trades - Professional & Institutional 2009-01-22 08:48:02 211.69 Kb

Well, this is JP Morgan in the news yesterday. Told' ya so!

JPMorgan warns of more housing woes

CNNMoney.com - ‎21 hours ago‎

The New York City-based bank said "non-credit impaired" loans would suffer in 2009 due in large part to the ongoing decline in home prices across the ...

And while we're at it, I posed a warning on GE in the summer of last year (GE: The Uber Bank???). What's the relevance? Well, you should be cognizant of the honest and/or accuracy of management's comments. If I am not mistaken, I could have sworn that I heard GE's CEO sat that he would not have to cut the company's dividend...
Must be me in my old age.

From the WSJ:
General Electric is cutting its quarterly dividend to 10
cents
a share from 31 cents a share, saving $9 billion a year, CNBC reported.
The move comes amid a steep slide in the company's stock price. The company's
financial services operations have been hit hard by losses and delinquencies
during the credit crisis and economic downturn in the past 18 months.

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Notes:
  1. I will try to post the full Wynn forensic analysis tonight or tomorrow morning.
  2. I will be raising subscription prices very soon in a move to come closer to (but still undercut) market prices, so anybody who is on the fence should take the plunge now, or face a price increase later on.
Published in BoomBustBlog
Monday, 23 February 2009 23:00

More "I told you so's"

I told you so on Amex on July 31st, 2008: When the best of the best start with the shenanigans, what does that mean for the rest...

A few months later...

AmEx is paying card holders to close their accounts.

American Express Co (AXP), battered by mounting credit card losses, is offering $300 to a limited number of U.S. card holders who pay off their balances and close their accounts, the company said on Monday.

"We sent the offer out to a select number of card members," said Molly Faust, a company spokeswoman. "We are looking at different ways that we can manage credit risk based on the costumers overall credit profile."

The company did not say how many card holders would receive the offer and did not disclose the total of their card balances. Card holders have until the end of February to accept the offer and must close their accounts in March or April. Each card holder will receive a $300 pre-paid American Express card.

American Express, often seen as catering to relatively wealthy customers and companies, has been expanding its credit card business in recent years by reaching out to a wider range of clients. But that strategy has backfired. The company's earnings tumbled in the fourth quarter as credit losses jumped and debt-burdened consumers slashed spending.

In addition, American Express reported last week that credit card delinquencies rose in January more than analysts expected, as U.S. unemployment increased and the global economy deteriorated.

I told you so for nearly 360 days in a row concerning GGP, starting November of 2007: GGP and the type of investigative analysis you will not get from your brokerage house. Now they have billions in delinquent and about to be delinquent loans.

Published in BoomBustBlog