BSC 1-year share price history:
04/25/07 - $159.36 per share
03/17/08 - $2.00 per share (sold off to competitor)
In particular, for us in Tyumen value investors group, we need to better understand bank stock valuations, allocation and securitizations of balance sheet assets before adding positions in financials. We also need to take second look at capital ratios, derivatives trading activity, off-balance sheet deals and corporate greed aspects all of which accentuate the need to adopt down-to-earth attitude towards downside risk management.
Quotable Quotes:
i. Buffett commenting on derivatives trading in 2003
1." complex financial instruments are time bombs and "financial weapons of mass destruction" that
could harm not only their buyers and sellers, but the whole economic system" ///2.."The derivatives business is like hell - easy to enter and almost impossible to exit"
ii. Alan Greenspan writing in Financial Times, 2008:
1. "Comtemporary risk management models are inadequate and cannot be relied upon to predict the systemic risk"///2.. "The full extent of hidden bank losses remain unclear as long as the US housing sector continues to deteriorate, further erosion of the valuation of asset-backed securities are possible"
