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  • AvatarMario bishay
    Participant
    Post count: 20

    Hello Sean,
    I have a question regarding BAC, it is almost matching the criteria you mentioned in the teaching video,
    Market Cap 231.4B (high market cap).
    PE Ratio (TTM) 12.85 (Good PE Ratio)
    Investor like Warren buffet now own 12-13%

    Good dividends and it is in wave 3 now.
    why it is is never mentioned in LI ?
    another question 🙂
    I looked at Statistics in the Yahoo as you showed me before, I found it had a debit of 552.05 Billion, How bank has a debit ???
    thanks

    Sean HymanSean Hyman
    Keymaster
    Post count: 3286

    Bank fundamentals are the hardest to examine because, for instance, they can keep cash on their books recorded that’s not theirs, etc.

    So it’s best to base them off of things like book value.

    Forward P/E is almost 17.

    I don’t like the way it looks on its weekly chart (trading below some major moving averages and a declining 50-week simple moving average).

    It traded up with the market (with overly positive sentiment) and it could trade down with the overall market later.

    Yep, Buffett owns a ton of it and he may be right. But keep in mind, he can buy it in Berkshire and he doesn’t care if it takes until after he dies to pan out. That’s not most people’s situation in life. Also, he’s got $147 billion in cash and he wants to invest some for long-term dividend yield. But we have to invest differently than him due to our time horizons. But yes, he might be right. But I’m not comfortable with it. I’ve been watching his buys.

    Also, investing is relative. The money that could be put into BAC could have also been put into silver, etc. which would have performed far better. I think SAN stands the chance to outperform BAC too.

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    AvatarMario bishay
    Participant
    Post count: 20

    Thanks Sean 🙂
    I know I ask too many times :).
    I follow the weekly videos and I have in SLV and SAN ( both are doing GOOD among Others )
    one last thing so i learn, can bank have debit? it is almost double its market cap!

    Sean HymanSean Hyman
    Keymaster
    Post count: 3286

    It’s not a debit but debt. Yes, banks, like any company can carry debt and leverage themselves.

    Again, bank financials are different from most any other sector/industry on the planet. Their debt, cash, etc. is booked differently. So you can’t count on those numbers as being all “their” debt, just like all that cash isn’t “theirs” either but also customers’ cash.

    You have to go off of book value and in my opinion, technicals on long-term charts. It’s why I rarely own banks.

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