Tuesday, May 5, 2015
Friday, February 27, 2009
Look at this way
It looks very clear and intelligent move from government stand point, that they need more tools and institutions to attack the financial crisis. They have Freddie Mac, Fannie Mae for mortgages, AIG for insurance, and they need a large financial firm to work as proxy for government to clean up the mess. Its a long and painful process and government knew it lacks a strong franchise to go with full guns. The weakest and biggest firm C is a right candidate to do so.
In my opinion, they will continue to increse stake in Citi and pour in huge amounts until the financial crisis is addressed. Look at this way .. Freddie Mac, Fannie Mae, AIG and C are now the war ships for US to attack the problem. In general its a great move for recovery, involves lot of money and time too. And Government needed to increase the involvement, carrying a huge task.
This is not the time for thinking of Tax payer returns, the returns that they get are in different forms. Not necessary in the form of buy/sell ratio on the Citi investment. And for Citi common share holders its a blow and mark my words, Citi share is not for the long term bet. People can trade for a quick buck, but share value will see further declines and will be traded as another AIG,FNM and FRE.
In my opinion, they will continue to increse stake in Citi and pour in huge amounts until the financial crisis is addressed. Look at this way .. Freddie Mac, Fannie Mae, AIG and C are now the war ships for US to attack the problem. In general its a great move for recovery, involves lot of money and time too. And Government needed to increase the involvement, carrying a huge task.
This is not the time for thinking of Tax payer returns, the returns that they get are in different forms. Not necessary in the form of buy/sell ratio on the Citi investment. And for Citi common share holders its a blow and mark my words, Citi share is not for the long term bet. People can trade for a quick buck, but share value will see further declines and will be traded as another AIG,FNM and FRE.
Tuesday, November 11, 2008
DRYS - Oct event's - followup
http://www.forbes.com/afxnewslimited/feeds/afx/2008/11/08/afx5667924.html
its more than a month since my earlier post about DRYS, looks like the fundamentals continue to deteriorate and we are in an absolute mist. When the CEO went on public saying the company can't guarantee the loan repayment and its telling investors a head of times in preparing for chapter-11, I don't see things clearer than this. No matter what would be the reasons, I still this its the too much aggression causing this and lead to such a disastrous balance sheet. I can't say a hold even loosing more than 50% in one month, things might get worse going forward and a crash in stock value is still very much on the cards.
its more than a month since my earlier post about DRYS, looks like the fundamentals continue to deteriorate and we are in an absolute mist. When the CEO went on public saying the company can't guarantee the loan repayment and its telling investors a head of times in preparing for chapter-11, I don't see things clearer than this. No matter what would be the reasons, I still this its the too much aggression causing this and lead to such a disastrous balance sheet. I can't say a hold even loosing more than 50% in one month, things might get worse going forward and a crash in stock value is still very much on the cards.
Wednesday, October 8, 2008
Dryships - fleet expansion
Reference - http://www.reuters.com/article/marketsNews/idUSBNG17918220081006
Let me bring down a piece of information here on this vessel purchase and see if anyone wants to analyze.
Appreciate if any one wants to answer these questions.
1) The implied aggregate value of the fleet is estimated at $1,168 million.
(Question - Market cap of Dryships is less than 1B, that means the sale is bigger than the whole company equity..? Isn't this too aggressive? where is the company headed?
2) DryShips will pay to the Sellers $689.6 million in exchange for the shares of the SPCs. Such consideration will be in the form of 19,431,840 newly issued shares of DryShips Inc. common stock. Following the issuance of the new shares to the sellers, the total number of DryShips shares outstanding will be 62,984,840.
(Question - does that mean approximately 19M shares already given to the seller, or they pay later. If share value falls down further, does Dryships has to give more shares??. For today's prices its 70% of the equity)
3)The Company will also assume $216.3 million of existing debt
(Question - Does it means the seller previously owe this to Dryships or if understand incorrectly,does this mean Dryships has existing debt which they have cash for it?) - can some one clarify
4)$262.0 million in remaining shipyard installments related to these vessels which will be financed by debt facilities that are already in place
(I believe its the new debt Dryships want to take..Remember, its 30% of today's equity value of Dryships)
5)$16 million which will be funded by DryShips. ( I guess its the cash they hold in hand)
Disclaimer - I own some shares bought 3months back, and planning to hold. But I would definitely not buy any more with craziness of the above purchase.
Let me bring down a piece of information here on this vessel purchase and see if anyone wants to analyze.
Appreciate if any one wants to answer these questions.
1) The implied aggregate value of the fleet is estimated at $1,168 million.
(Question - Market cap of Dryships is less than 1B, that means the sale is bigger than the whole company equity..? Isn't this too aggressive? where is the company headed?
2) DryShips will pay to the Sellers $689.6 million in exchange for the shares of the SPCs. Such consideration will be in the form of 19,431,840 newly issued shares of DryShips Inc. common stock. Following the issuance of the new shares to the sellers, the total number of DryShips shares outstanding will be 62,984,840.
(Question - does that mean approximately 19M shares already given to the seller, or they pay later. If share value falls down further, does Dryships has to give more shares??. For today's prices its 70% of the equity)
3)The Company will also assume $216.3 million of existing debt
(Question - Does it means the seller previously owe this to Dryships or if understand incorrectly,does this mean Dryships has existing debt which they have cash for it?) - can some one clarify
4)$262.0 million in remaining shipyard installments related to these vessels which will be financed by debt facilities that are already in place
(I believe its the new debt Dryships want to take..Remember, its 30% of today's equity value of Dryships)
5)$16 million which will be funded by DryShips. ( I guess its the cash they hold in hand)
Disclaimer - I own some shares bought 3months back, and planning to hold. But I would definitely not buy any more with craziness of the above purchase.
Financial turmoil - help yourself.
As the global financial system is weakling day by day...I just wanted to share a thought and see if it helps. I know, most of you aware of that, the world is heading towards a slow down and the best of efforts by Government treasuries of various counties like US,UK,Germany, Russia, and some other European countries having little impact to prevent a major melt down. So, considering the best possible outcome of such efforts...we might prevent a crisis but an economic slowdown is already hitting hard on us.
Few weeks back, when all is green except some isolated fears of sub prime witch, people thought they would better off with elections rather not worry about markets. Bank after the bank indicates a profit hit, and slowly indicated a loss and then the story unfolded quicker than a possible level-5 hurricane. Balance sheets look so weak, overnight lending getting difficult and the confidence almost disappeared from the universe.
I invest in stocks, and have gained some experience with losses. So I thought I would like to share some thoughts, which might be helpful (I know it's too late....)
1) Even though stocks look terribly cheap, please restrain from temptations and avoid fresh investments
2) Real estate - anywhere in the world, may not be a right option at least for 1yr
3) Avoid hand loans, as the borrowers might see financial crisis resulting risk to your money
4) Don't lend money from banks like Personal loans, Home loans with anticipation that you can make more money. Now chances that you might loose money
5) To the possible extent avoid private banks in India. I know this is really pessimistic thoughts, but no one is too big to fail, and we can't trust the accounting practices. So I advise moving your bank deposits to Government banks.
6) Consider 1Yr - 2Yr fixed deposits in Government banks, as they give good returns (I guess in India its 9 - 10%)
7) If you have experience, consider buying gold bonds or physical gold. Economist suggests, gold is an excellent hedge during economic slowdown periods.
8) Always expect a salary decrease or job loss in mind before making any investment plans.
These are some thoughts that I would like to share to prepare for the storm. I know there are two ways to look at it. It might look shit scary and absolute pessimistic approach, But unless you have a great financial advisor this is not an easy storm to sail with respect to your investments.
I wish I will be wrong about my analysis about economy!
Few weeks back, when all is green except some isolated fears of sub prime witch, people thought they would better off with elections rather not worry about markets. Bank after the bank indicates a profit hit, and slowly indicated a loss and then the story unfolded quicker than a possible level-5 hurricane. Balance sheets look so weak, overnight lending getting difficult and the confidence almost disappeared from the universe.
I invest in stocks, and have gained some experience with losses. So I thought I would like to share some thoughts, which might be helpful (I know it's too late....)
1) Even though stocks look terribly cheap, please restrain from temptations and avoid fresh investments
2) Real estate - anywhere in the world, may not be a right option at least for 1yr
3) Avoid hand loans, as the borrowers might see financial crisis resulting risk to your money
4) Don't lend money from banks like Personal loans, Home loans with anticipation that you can make more money. Now chances that you might loose money
5) To the possible extent avoid private banks in India. I know this is really pessimistic thoughts, but no one is too big to fail, and we can't trust the accounting practices. So I advise moving your bank deposits to Government banks.
6) Consider 1Yr - 2Yr fixed deposits in Government banks, as they give good returns (I guess in India its 9 - 10%)
7) If you have experience, consider buying gold bonds or physical gold. Economist suggests, gold is an excellent hedge during economic slowdown periods.
8) Always expect a salary decrease or job loss in mind before making any investment plans.
These are some thoughts that I would like to share to prepare for the storm. I know there are two ways to look at it. It might look shit scary and absolute pessimistic approach, But unless you have a great financial advisor this is not an easy storm to sail with respect to your investments.
I wish I will be wrong about my analysis about economy!
Tuesday, January 29, 2008
Lost ITIN
I thought I would post this here, as this is tax return season and incase any one needs how to get a forgotten or lost Individual Tax Identification Number(ITIN) for their dependents.
I did some googling and found this address some where...so here are the easy steps.
1) call up (215) 516-4846
2) be on line for a customer service representative and tell them that you have either lost or forgotten the ITIN of your depedent.
3) You need Last name, Date of Birth, First Name, Country of Birth, Citezenship details, and the current address
.. they are pretty good, they will give you the ITIN# over the phone and a copy will be sent to your address.
I did some googling and found this address some where...so here are the easy steps.
1) call up (215) 516-4846
2) be on line for a customer service representative and tell them that you have either lost or forgotten the ITIN of your depedent.
3) You need Last name, Date of Birth, First Name, Country of Birth, Citezenship details, and the current address
.. they are pretty good, they will give you the ITIN# over the phone and a copy will be sent to your address.
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