Morgan Stanley's (MS) Results Fall: Your Surprised?

18 Jun 8:57am
Read original blog entry
The difference here between Morgan and Citi (C), Lehman (LEH) and Merrill (MER) is that CEO John Mack has not been running his mouth around town telling everyone "all is well".

“Given the turbulent environment this quarter, we stayed close to shore and continued strengthening the Firm’s capital and liquidity positions,” John J. Mack, Morgan Stanley’s chairman and chief executive, said in a statement. “The difficult market conditions and lower levels of client activity impacted our results, particularly in fixed income and asset management.”

See, the things is that no one (or at least no one should have) expected the results to be good. So , why tell everyone they would be.

By being quiet, Mack, at least for now has escaped the fate of all his peer except those at Goldman Sachs (GS) who, it should be noted have also kept their mouths shut.

Morgan's profit, amounting to 95 cents a share, was down from the $2.36 billion it earned last year. Howver, they managed to slightly exceed expectations of 92 cents a share. Revenues from its fixed-income sales and trading unit fell 85% from the same time last year to $414 million, due to losses in mortgage trading and lower revenues in other products.

The firm reported a $519 million loss from loan commitments, including those made to private equity firms. While it lost money on hedges, it saw some gains from marking some holdings to market.

All in all, nothing out of the ordinary, bad, but nothing outlandish. Had Mack been running around telling everyone not to worry, he might be getting nervous about now.

Has anyone learned this lesson yet?????????



Disclosure ("none" means no position):Long C, GS, None

Todd Sullivan's- ValuePlays

↑ Grab this Headline Animator


Visit the ValuePlays Bookstore for Great Investing Books

Comments

Back to top

Post comment

Back to top

Post a comment

Please login to post a comment

About

ToddSullivan

A Massachusetts based value investor, I look for companies whose current valuation is at a discount to their true value. When I purchase a stock, my typical holding period is several years. I consider buying a stock purchasing a piece of a business. I am confident once I make a decision to buy that eventually the market as a whole will recognize the true value of the business and value it accordingly. It may take 1 month, 6 months or a year, but if I buy it at enough of a discount to its true value my results will be (and have been) superior to the market as a whole. Of all the disparate investing disciplines, value investing has stood the test of time. The great investors of have all been value investors. Warren Buffett, Ben Graham, Bill Ruane (Sequoia Fund), Bill Miller and Wally Weitz, all have consistently outperformed the market for decades by using various forms of value investing. Currently I am a contributing writer to Seeking Alpha, Vinvesting.com, The Stock Masters and Value Investing News. Posts have been reprinted in The Wall St. Journal, Yahoo Finance, Google Alerts, Google Finance, TheStreet.com. 24/7 Wall St. and Topix.net.