Street Capitalist: Event Driven Value Investments

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Wisdom on such diverse topics as: spin-offs, merger arbitrage, post-bankruptcy equities, global macro commentary and short ideas.

Street Capitalist: Event Driven Value Investments

Oct 7, 2009

Submit Questions: Interview with the Bank Analyst

Sorry for the lack of content lately. I’ve been kind of busy with school and interviewing for jobs. I’m gearing up for my next interview, this time with a value investing bank analyst at a large buy-side fund. Unfortunately, this individual has to remain anonymous, but I think the interview will be really insightful.

I think that this person will be great for an interview, but I thought it might be even better to get questions from some of you guys. Typically, you’ll see value investors shy away from analyzing financials because of the complexity involved. This guy does it day in day out, so it might be the perfect time to get some questions answered.

Leave your questions in the comments section or via e-mail. Thanks!

  • hey Tariq, looking forward to this interview. I've got a few questions for them:

    - The trade in fins has largely been long large moneycenter and short regionals, do you see that trend continuing going forward?

    - how worried are you about regionals with large CRE exposure as we progress through what seems to be the next set of fundamental problems? And on that note, which regionals would you be most afraid of here?

    - What ratios are you looking at the most when examining banks? do you use the Texas ratio at all given how it has helped signal banks that will need to raise cash in the past?

    - And finally, what are your best long and short recommendations in the sector currently?

    Thanks!
  • Andy
    Looking forward to the interview. Active financial sector investor here.
  • Packer16
    What level of reserves do you consider appropriate for the following types of assets held in banks: commercial loans, commercial real estate, residential real estate (gov't guarenteed, jumbo), real estate development loans, consumer credit and auto loans. How do you get comfortable that the reserve levels are adequate?

    How do you include the value of core deposits and the flexablity of overcapitalization in your fair valuation estimates of banks?
  • kvattiku
    Hi Tariq,
    I have the following questions:

    1. Commerce Bancorp (formerly CBH) used to be a unique bank which had a different business model. If it were a standalone company now, would it have been affected the same way as most of the big banks. Also, would it have taken more market share from the likes of BoA and Citi.

    2. Are there any banks similar to Commerce Bancorp which are radically different ?
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Tariq Ali is a student at the University of Texas at Austin, where he also operates a non-profit microfinance organization called TEEXAS.org. In his investing, Tariq draws upon the knowledge and experience of the great investors of our time, including Benjamin Graham, Warren Buffett, Joel Greenblatt, Seth Klarman, and George Soros. Tariq is actively pursuing a career in finance. Find me on twitter @valueinvestr


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