alfa and other fin company

**vin** Wed Feb 16, 2005 12:22 pm

alfa and other fin company
Blastinvestor is the best FA person in goofiz. It seems quieter here.

How to value bank and financial institution/insurance?what is it's margin of safety? It seems there are a lot of insider of banking company are buying stock (alfa, tbbk, cbh...). however, there are such a high leverage that I am scared to do anything .

I search web and find out 2 rules are Net interest margins and Cost/income ratios. but still it does not make any clu.

Also as a suggestion to data miner expert, it is posible to find out stocks that are sold below company cash value/share ? I suppose that is a good criteria for margin of safety.

**blast_investor** Wed Feb 16, 2005 2:37 pm

Thanks for praising me.

My attitude on typical financial stock: avoid.

In theory, cash, income are all good criteria for financial stock. In reality, financial stock is much more complicated and income or earning is not really a indicator of profitability of financial stock. Even "Cash" has some issues as well due to unpredictability of liability size.

Of course, financial companies with simple business model such as mortgage, local banks might be worth looking. But overall, I doubt any data mining effort can help that much in digging out financial stocks. They are just too complicated in most cases.