Large related party transactions reported by the Wall Street Journal were disclosed in the company's 145 page proxy statement, available for all to see for nearly a year.
I was asked why I am not interested in buying regional banks despite the carnage. Simple answer is that I delegate this to Buffett. It was widely reported that dozens of private jets landed in Omaha last weekend. No deal so far. If there’s something to do, Buffett will do it. Does that mean others might not want to play in this game themselves? Sure, but I see no reason to think I have any edge playing this game myself. Too much depends on the actions of regulators and politicians. And often fickle depositors in a panic, with people like Ackman spreading panic on social media. Too hard pile for me.
“With the caveat that I am not an expert when it comes to this bank and am not commenting on the ethics or intentions of its management, it does seem quite obvious that the company has provided generous pay to its executives and directors.”
While the absolute numbers are obviously eye popping, do you believe that the pay is overly generous on a relative basis? And if so, why? I’m curious how seriously you take the statement on the CEO’s pay being in the 79th percentile relative to 93rd percentile performance.
Another excellent article. Thank you. I have invested in 3 banks, all of which Buffett/Munger have current or prior to investment. A lesson learned is that when they divest, I should have followed. The first one was Bank of America, when he bought the preferred with warrants. The dramatic falls of seemingly healthy banks is extremely alarming and reinforces my belief that analysis of such complex financial institutions is best left to Buffett.
You have reemphasized my curiosity about what the various banks that 'lent" First Republic $30 billion got for their money. Evidently, some goodwill with the regulators and the possibility of stabilizing the system? Time will tell.
I was asked why I am not interested in buying regional banks despite the carnage. Simple answer is that I delegate this to Buffett. It was widely reported that dozens of private jets landed in Omaha last weekend. No deal so far. If there’s something to do, Buffett will do it. Does that mean others might not want to play in this game themselves? Sure, but I see no reason to think I have any edge playing this game myself. Too much depends on the actions of regulators and politicians. And often fickle depositors in a panic, with people like Ackman spreading panic on social media. Too hard pile for me.
Regarding this statement:
“With the caveat that I am not an expert when it comes to this bank and am not commenting on the ethics or intentions of its management, it does seem quite obvious that the company has provided generous pay to its executives and directors.”
While the absolute numbers are obviously eye popping, do you believe that the pay is overly generous on a relative basis? And if so, why? I’m curious how seriously you take the statement on the CEO’s pay being in the 79th percentile relative to 93rd percentile performance.
Another excellent article. Thank you. I have invested in 3 banks, all of which Buffett/Munger have current or prior to investment. A lesson learned is that when they divest, I should have followed. The first one was Bank of America, when he bought the preferred with warrants. The dramatic falls of seemingly healthy banks is extremely alarming and reinforces my belief that analysis of such complex financial institutions is best left to Buffett.
You have reemphasized my curiosity about what the various banks that 'lent" First Republic $30 billion got for their money. Evidently, some goodwill with the regulators and the possibility of stabilizing the system? Time will tell.