XLF, Banking and Financial Sector Stocks
- Kirk
- Happy
- Happy
- Kirk
- Kirk
- Rande
- Kirk
- Kirk
- SteveT
- Rande
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» Kirk - The key Norm, was buying XLF back when it was under $24 and when
The key Norm, was buying XLF back when it was under $24 and when the S&P500 was near a high...Selling strength (technology stocks) and buying weakness (banks) was a good move to beat the averages and is what Dreman speaks of in his book (see my reading list). Some of us did very well following this strategy...My mostly technology portfolios are still up YTD due to taking SOME profits and buying things like XLF. It is funny how you only need to do a little bit to get significant outperformance.
Try clicking on Jen's name to get info on posting links...
-- posted by Kirk
-- posted by Happy
» Kirk - Yeah, you do have to look at the overall package.
Yeah, you do have to look at the overall package. They can't all go up at the same time.The point is you CAN sell some stocks that are soaring and then buy others that are on the way down and often the added diversity helps overall performance. Especially selling some when high and buying others when low. Of course, nobody I know can sell at absolute highs just like they can't buy at the very bottoms. I've never made the claim to buy at the very bottom or sell at the very top.
The ONLY way to truly measure performance is for a total portfolio, not just a pick here and a pick there. Even with MANY picks being far from perfection, my newsletter portfolio IS beating the averages in both 1999 and 2000. IF someone doesn't have the same portfolio, then they won't get the same results.
-- posted by Kirk
-- posted by Kirk
» Kirk - Merger Activity
Looks like the mergers we predicted late last year, as a reason to buy Financials, is starting. I understand that "pooling of interests" accounting will end after 2000 so this is supposed to be a good year for mergers.Look at XLF components and you have a hard time missing.
Good YTD action too!
<img src=http://chart.neural.com/servlet/GIFChart... width=450 height=250>
Could still be some value in the smaller players like FSRBX and BTO
<img src=http://chart.neural.com/servlet/GIFChart... width=450 height=250>
Any other suggestions for those that are late to the party? Probably still upside on XLF (I hope so!)
-- posted by Kirk
» Kirk - Credit Suisse confirms plans to buy DLJ
Wednesday August 30, 10:42 am Eastern Timehttp://biz.yahoo.com/rf/000830/l308290_2...
Credit Suisse confirms plans to buy DLJ
By Alice Ratcliffe
ZURICH, Aug 30 (Reuters) - Credit Suisse Group said on Wednesday it would buy U.S. investment bank Donaldson, Lufkin & Jenrette (DLJ) (NYSE:DLJ - news) in a deal worth an estimated $13.7 billion to form a global investment banking powerhouse.
Including an additional three-year staff retention plan, the total cost to Credit Suisse will be around $14.9 billion.
The deal creates one of Wall Street's premier investment banks to rank alongside Merrill Lynch (NYSE:MER - news), Schroder Salomon Smith Barney (NYSE:C - news), Morgan Stanley Dean Witter (NYSE:MWD - news) and Goldman Sachs (NYSE:GS - news).
Switzerland's second-largest financial services group said it had agreed to pay $90 per DLJ share, or $11.5 billion. Sources close to the deal said it would pay a further $2.2 billion for outstanding options which Credit Suisse will issue to DLJ employees in exchange for options they already own.
It will also set up a staff retention fund totaling $1.2 billion to keep DLJ employees.
Credit Suisse First Boston (CSFB), the investment banking unit of Credit Suisse Group, is expected to derive the most immediate benefits from the move.
``DLJ's strengths in investment banking are highly complementary to (CSFB's) activities,'' Credit Suisse said in a statement. These included the high-yield bond business and industry sectors including telecommunications, financial institutions, technology and health care.
DLJ is 71 percent owned by AXA Financial (NYSE:AXF - news), itself owned by French insurance group AXA SA .
AXA's shares hit a record high of 178.5 euros in early trade in Paris, but then fell back to stand down 1.7 percent at 169.50 euros.
CAPITAL GAIN OF $2.75 BILLION
Credit Suisse will pay AXA 30 percent in cash and 70 percent in Credit Suisse shares for its stake. AXA said the sale would produce a net capital gain of $2.75 billion.
Through the deal, AXA will gain an additional 8.5 percent of Credit Suisse for a total stake of around 10 percent.
Credit Suisse shares, already under pressure amid widespread speculation about the deal, fell further when details of the transaction were confirmed. They were down 3.0 percent to 370 around 1415 GMT, off a low at 362.
Credit Suisse Group officials have said the group wants to grow organically, but top management also has stressed distribution of products as an avenue to expand its personal wealth management business, which include insurer Winterthur.
The move will put CSFB back in the spotlight just when many believed a business perceived as inherently risky was being eclipsed by more staid wealth management operations.
But analysts said it also needed to increase its size to make headway in the competitive investment banking market.
``In investment banking, you have to have scale to survive,'' said Bryan Crossley, banking analyst at ABN AMRO. ``This is like a poker game -- you have to keep throwing money into the pot to stay at the table.''
Credit Suisse said it expected the acquisition to be positive for earnings starting after 2002. It will take a $850 million restructuring charge in 2000, as part of the deal, but said cost savings from the transaction were expected to range between $750 million and $1 billion annually, pre-tax, by 2002.
It will ask shareholders to approve a capital increase of up to 30 million shares in authorised capital and up to 12 million shares of conditional capital to help fund the deal. It will also ask shareholders to approve a share repurchase plan at its next annual meeting in June 2001.
DLJ Chief Executive Joe Roby will become chairman of CSFB's executive board. Allen Wheat will remain CSFB chief executive.
MIXED EMOTIONS
Analysts had mixed feelings about the deal.
``They are buying a more risky, more lumpy business. They have a much bigger challenge ahead. I am not very convinced,'' said Heinrich-Horst Wiemer, analyst at Bank Sal Oppenheim.
Some market watchers had hoped the group would strengthen its asset management business and reduce dependence on volatile earnings from investment banking.
The deal would give CSFB a top position in the traditionally high-risk business of junk bond underwriting and make it the third-largest stock offering underwriter.
Credit Suisse will also have scope to expand in investment banking areas like private equity. CSFB is bringing to the table its U.S. technology team led by Frank Quattrone.
Quattrone left Deutsche Morgan Grenfell for Credit Suisse in July 1998. Credit Suisse management regularly denies that he is paid a salary of several tens of millions of dollars a year, but its officials admit running such businesses is costly.
Credit Suisse has tended to grow internally. Its strategy has been rewarded, as its shares hit all-time highs of 390.50 francs on August 16. Its first-half results, to be reported on Thursday, are expected to be strong, with net profit forecast at 3.6 billion Swiss francs.
The move follows rival UBS AG's announcement in July that it planned to purchase U.S.-based PaineWebber, the U.S. broker.
Some analysts believe that Credit Suisse was unwilling to be left behind and pride may play part in the expected acquisition.
``It does look like that. To my knowledge, Credit Suisse has always said that no big acquisition was planned in the United States. So with this news, I am absolutely surprised. I thought the focus was more in Europe,'' said Christoph Ritschard, analyst at Zuercher Kantonbank.
-- posted by Kirk
» Rande - The Financial Accounting Standards Board on July 5 postponed the
The Financial Accounting Standards Board on July 5 postponed the release of a final statement that is expected to ban pooling-of-interests accounting for mergers and acquisitions. FASB said a final statement will probably be released in the first quarter.-- posted by Rande
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