What we have at JPM is a substantial “beat” as profits were predicted to be $3.10 per $154 share for the quarter and now its $4.50– almost 50% greater than forecasted. Even if we presume the bank goes back to “regular” $8Bn quarters, were still looking at a $40Bn year and you can buy the entire bank for $473Bn– not bad. We already have Goldman Sachs (GS) in our Long-Term Portfolio (LTP) so were not going to add JPM and GS also knocked it out of the park. We were worried about JPM since they have common banking (chase) and we didnt depend on those stimulus checks to produce so much service but they did– mainly since the Government wired the cash to your bank and didnt simply send you a check to invest. We were far too conservative with GS when we made it a Top Trade Idea for our Members on October 14th:.
I have actually always objected to Loan Loss Reserve accounting because it allows a bank (and numerous other companies) to take revenues that have currently been stated (and currently moved the stock) out of Cash (showing a loss as needed for taxes, housekeeping, and so on) and after that back to profits when they feel like it (to increase the stock rate or conserve a quarter). Specifically for Businesses that are able to redeem their own stock when the price is depressed due to a loss they purposely caused and then, when they want to offer more stock or take rewards– they simply re-recognize the earnings as needed. What a fraud!
Bank profits are excellent..
Well, Goldman Sachs (GS) and JP Morgan (JPM) are good, Wells Farge (WFC)– not a lot. And Im unsure I d call JPM “good” as $5.2 Bn of the quarters $14.3 Bn in earnings originated from the release of loan reserves that were reserved in 2015 to cover anticipated loan defaults. Because the Federal Government tossed $6Tn at the economy given that then– it ends up they didnt require the $5.2 Bn to cover bad loans so now the cash (which was constantly in the bank) is transferred to the income side of the ledger.
