gone in 10yrs, page-41

You've been given The Word, acrushor.

If you continue to hold (and buy more) investment bank shares in the middle of a world-wide credit crunch, you only have yourself to blame.

MBL is now down 30% from its May 07 highs. Did you hear about the optimistist who fell off the skyscraper roof? All the way down, he was heard to say, "So far, so good."

Have a look at the chart below, from MBL's recent AGM presentation:-



Note the profit contributions from investment banking and funds management, respectively. "Investment banking encompasses, "Mergers and acquisitions, advisory, underwriting and principal transactions". Then ask yourself, how much profit is driven by repeatable, long-term business and how much is driven by year-to-year deal-making opportunities?

Finally, ask yourself, "Where will next years' profits come from, in a world-wide market where credit is contracting, LBO and M&A activity is crashing and valuations are declining?"

You really should read these things, if you're going to buy or recommend a company. In fact, for all of those who think MBL is a good buy at current prices, I'd suggest that you download and analyse that presentation, in light of recent events.