Saturday, July 26, 2008

Financial Institutions; Attachment

Butterfly South
Richard Ivy

Sun Tzu said: The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy.

I don't read Jim Jubak often, but I ran across one of his columns that you might find interesting about the financial institutions. You can be transported to it by clicking below.

Jubak's Journal7/25/2008 12:01 AM ET 5 big losers in the banking crisis

IN the article, he lists these five financial institutions that could be hardest hit: AIG, C, MER, WB, WM. WB just recently lost their CFO. One of the criticisms by analysts was that the fella was not perceived as being able to say no to the CEO. It was always a surprise to me that WB bought Golden West Financial. I had spent a little time with their financials--in fact they were one of the first one's that I had looked at to understand and see the scope of the problems. FED was another institition whose financials I looked at closely and helped shape my thinking early last year.

I suppose both BAC and WB wanted to get into the mortgage business. I'm reminded that when we see these 'deals' --and we can include Sam Zell's selling of his real estate business in that one--we should be instructed by them. These are founders and builders of businesses that even with all of that energy and time spent in constructing them, they were able to sell it and get the best price.

If they were not too attached to sell when the market was at its pinnacle--when the news and prospects for unlimited returns--then why do we get too attached to our own holdings which involve nothing but our putting in a sell order? I think that it is something constructive on which to reflect.

No comments: