In my earlier post, I have narrated about my last Sell transaction in Dec 2022.
It was for stock $Camber Energy(CEI)$. You can click here to read if interested.
I was performing a stock take just after lunch when I realized that I had a last Buy transaction in Dec 2022, as well.
Whahahha. guessed it slipped my mind.
On further verification, the reason I could not recall is because (a) its a token buy and (b) I was merely testing out Mr Warren Buffet's teaching of "Be Greedy When Others Are Fearful".
No more, no less.
What was my last stock purchase in Dec 2022 ?
My "token"purchase on 15 Dec 2022
- Its none other than Banking stock - $Credit Suisse Group AG(CS)$.
- Year 2022 hasn't been kind to CS. It has been battered by a string of scandals and losses.
- First Blow. It suffered a $5.5 billion loss from the unravelling of US investment firm Archegos.
- Second Blow. It also had to freeze $10 billion worth of supply chain finance funds linked to insolvent British financier Greensill.
- The result of the two biggest crisis in the bank's 166-year history - saw rich clients pulled out savings & investments from the financial institution.
- The two crisis also saw the bank's stock price plummeted from $9.94 (05 Jan) to $2.98 (at its lowest).
- That's a massive -70% from its 05 Jan 2022 stock price.
- As I wanted to test out Mr Buffet's theory, I bought a token position in CS only.
- I do not believe that it will collapse. It is Switzerland's second-biggest bank afterall.
- When I submitted the Buy transaction slightly > 2 weeks back, I wasn't sure if it has bottomed as well.
- Is there light at the end of the tunnel ? Will there ever again be a rainbow above Credit Suisse's head again ?
- I believe there willl be light at the end of the tunnel if the bank plays its cards right.
- That means no more major boo boo like the above 2 incidences.
- The bank could ill afford another similar one-two punch in the face.
What Are The "Proactive" Steps Undertaken by Credit Suisse To Turn Itself Around ?
Under the stewardship of new CEO Ulrich Körner & Chairman Axel Lehmann :
- There will be 9,000 job cuts over a three year time frame.
- Completed a 4 Billion Swiss franc (US$4.3 billion) capital hike back in Dec 2022.
- Focus even more on its flagship wealth management franchise
- Scaling back volatile investment banking after a string of losses & risk-management failures.
- Credit Suisse is also spinning out its investment arm back (again) into an independent company and reviving the original brand name - CS First Boston
- CS First Boston will be based in New York; where the "biggest fee pool" is.
- CS market business will "support" First Boston
- CS has also entered into definitive transaction agreement to sell a significant part of its Securitized Products Group (SPG)) to Apollo Global Management; targetted to be completed by mid-2023.
- Most importantly, restore trust in the most pragmatic & stablising timeline.
With Restructuring Plan Announced & In Motion, What Does It Mean To Investors & Stock Market ?
"A Picture Paints A Thousand Words" ..... by Frederick R. Barnard.
- Do you think there is hope for Credit Suisse ?
- What do you think will be CS's stock price at end 2023 ?
- Food for thoughts ?
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The lender has been paying out billions of dollars to resolve legal cases linked to its residential mortgage-backed securities (RMBS) business in the run up to the 2008 financial crisis.