Why You Shouldn’t Invest in JPMorgan

JPMorgan Chase (NYSE: JPM  ) CEO Jamie Dimon began his most recent letter to shareholders on a triumphant note. He proudly reported a record $21.3 billion in net income for 2012, which he said marked the third consecutive year of record profits.

Dimon also pointed to the solid performance of the company's stock over the past eight-and-a-half years, and said that the company is optimistic about the future.

Despite this commendable performance by JPMorgan, we strongly believe that investors should pass on buying its stock. As an investment, the possible upside in shares of JPMorgan does not outweigh the potentially considerable, though unknowable, downside risk.


Ina Drew, former CIO of JPMorgan, testifying about the Whale Trade before the Senate.

With the vast amount of news that's printed about the banking giant on a daily basis, it's helpful to stop and really think about JPMorgan from the perspective of how we approach the purchase of any new investment. First of all, we look for a great business that is growing and sustainable. Next, we like to check to see if the company is delivering value for all of its stakeholders. Obviously, a close look at the valuation is also very important. And finally, we ask ourselves if the company's management is effective and trustworthy.

Let's lay the facts out on the table and see how JPMorgan holds up in those key areas.

Risky business
JPMorgan is primarily a large, traditional bank attached to a massive corporate and investment bank. Traditional banking is a cyclical, but decent business. It's very competitive, of course, but companies can muster reasonable levels of profitability through leverage and cross-selling different products to loyal customers. The corporate and investment banking business can be extremely profitable, though it's also quite competitive and cyclical. Careful risk management is crucial to survival.

Compared with the other banks traded on U.S. exchanges, JPMorgan has average profitability that becomes larger if you take into account leverage; superior growth rates (zero) that resulted from avoiding the worst of the financial crisis; and a somewhat weaker balance sheet:

One caveat worth noting: A good chunk of JPMorgan's profits probably results from its lenders' perception that the bank remains too-big-to-fail. Economist Deniz Anginer calculated that such funding advantages saved JPMorgan $16.27 billion from 2009 through 2011. That amount comes out to 24% of the bank's total pre-tax profits during those years.

But overall, JPMorgan does have a moderately profitable business that stacks up reasonably well against its competitors, and certainly better than fellow megabanks Bank of America (NYSE: BAC  ) and Citigroup (NYSE: C  ) .

As the financial crisis demonstrated, however, banks that fail to manage risk can post record profits for years before suddenly collapsing. And like its Wall Street peers, JPMorgan faces considerable risks. Its most recent 10-K devotes more than 12,000 words to a dizzying array of risk factors such as regulatory risk, market risk, credit risk, liquidity risk, legal risk, and operational risk. Recently, The New York Times reported that the bank is being investigated by at least eight federal agencies in addition to investigations by federal prosecutors and the FBI.

How well does JPMorgan serve its stakeholders?
We believe that you can't predict how successful a company will be solely by looking at its profit model and historical bottom line. Over the long run, corporate performance is also driven by how well a company satisfies its key stakeholders. If a company cheats its customers, they'll shop elsewhere. If it mistreats employees, they'll be less effective in their jobs or find another employer. If a company creates enormous problems for society, society ultimately won't tolerate it anymore.

According to the website Glassdoor, employees actually give JPMorgan pretty good marks all around. On the compensation front, JPMorgan's investment banking employees took home an average of $217,000 in 2012, and managing directors and top traders can make several million in a year.

It's not quite so clear that the company is serving its customers and society well. Some of the evidence is pretty troubling, in fact. One analyst noted that JPMorgan has paid well over $8.5 billion in regulatory and legal settlements since 2009 to settle accusations spanning multiple lines of business. A few of the charges included:

The bank is also under investigation for allegedly manipulating energy markets and hiding evidence that it did so, working with other banks to manipulate global interest rates, and failing to sound the alarm on Bernie Madoff's Ponzi scheme, among other things.

In summary, we'd say the company delivers significant value for its management and employees. It's debatable, to say the least, how well it's serving its customers and society at a large. And despite management's myopic focus on today's bottom line, it's our view that the value long-term investors in this business are receiving isn't sufficient to the risks they are taking.

So what's the company worth?
We'll cut to the chase here: We don't think it's possible to derive a meaningful valuation for JPMorgan's stock or its assets in general.

And we're not the only ones. According to Jesse Eisinger and Frank Partnoy, a recent survey found that "more than half of institutional investors did not trust how banks measure the riskiness of their assets." And 60% of hedge fund managers gave our big banks unsatisfactory marks when it came to the trustworthiness of their "risk weightings." Eisinger and Partnoy write of one CEO who "regularly hears from investors that banks are "uninvestable."

During the financial crisis, banks wrote down hundreds of billions of dollars in ordinary mortgage assets. But major trading institutions like Goldman Sachs (NYSE: GS  ) , Morgan Stanley (NYSE: MS  ) , and JPMorgan work with assets that are notoriously difficult to value. And JPMorgan is the largest derivatives dealer in the world, with $69 trillion in notional value, nearly all of which are traded over the counter instead of on a transparent exchange.

In early 2012, as JPMorgan's so-called "London Whale" trades began to unravel toward at least $6.2 billion in losses, traders began employing dubious valuation practices to cover their tracks. The bank conducted an internal investigation that discovered the "aggressive" pricing, but determined it to be "consistent with industry practices" and "acceptable under bank policy" -- good enough, in other words, for the bank's official quarterly earnings filing. JPMorgan didn't consider the books to be mismarked for several more months, until after they found out traders had been disparaging their own valuation with descriptions like "idiotic."

As the Senate Permanent Subcommittee on Investigations put it, "That the Controller concluded that the SCP's [Synthetic Credit Portfolio] losses could legitimately be reported at anywhere between $719 million and $1.2 billion at the end of March exposes the imprecise, malleable, and potentially biased nature of the credit derivative valuation process."

No outside investor can truly understand this bank. We think you're kidding yourself if you believe you can peruse its financial statements and come away with an informed, clear view of the riskiness of its assets.

As an investor in JPMorgan, you are ultimately relying on the ability and trustworthiness of the company's management to deliver solid gains, while preventing the whole enterprise from blowing up. This is faith-based investing.

Is JPMorgan's management worthy of such extraordinary faith?
So, assuming we're not already dissuaded from investing in such a company, the question we now have to ask is: Can we trust the leadership team at JPMorgan?

When Warren Buffett looks for an investment, he insists that the people operating it are "honest and competent." The recent JPMorgan Whale Trade debacle as outlined by the Senate Permanent Subcommittee on Investigations raises some reasonable doubt about those two attributes. Take a look at the following table we put together based on the report by the Senate Permanent Subcommittee on Investigations:

Public Disclosure on the JPMorgan Whale Trade

Ultimately, the Subcommittee concluded that "derivative trading and financial results were misrepresented to investors, regulators, policymakers, and the taxpaying public, who, when banks lose big, may be required to finance multi-billion-dollar bailouts."

Now, if this were an isolated incident, we might be tempted to write it off (so to speak) as an unfortunate mistake. Dimon has taken responsibility for the fiasco, and has promised that he will fix the problems that led to the trading losses. He also said recently of the trading debacle, "Businesses make mistakes, they learn from it and get better." For the most part, we couldn't agree more.

The problem, of course, is that there have been far too many breakdowns in internal controls and risk management of late at JPMorgan. When the litigation section of your quarterly filings is almost 9,000 words and even your CEO talks of regulatory orders requiring improved performance in multiple areas (with more to come), then there's a worrying pattern that needs to be properly evaluated and fixed. At a certain point, it's only natural to ask, how many investigations are too many?

Just say no
Ultimately, JPMorgan operates a pretty profitable business that could be considerably safer and more sustainable, if the company possessed much better internal controls and risk management. What is particularly worrying for us is that there's been scant evidence of improvement in those areas despite past promises.

The company has a mixed track record of taking care of all its stakeholders (other than management and employees). It's basically impossible to value. And it's not obvious to us why JPMorgan's management team would deserve the extraordinary level of trust such an inscrutable investment would require.

Why should we invest in a black box of unknown but potentially enormous risk when there are dozens, if not hundreds, of more attractive publicly traded, large-cap companies out there? We strongly believe this one is a pass.

If you'd like us to keep you up-to-speed on financial reform and investor protection, just shoot a blank email to financialreform@fool.com.

For more on JPMorgan, check out:

link


Read/Post Comments (34) | Recommend This Article (73)

Comments from our Foolish Readers

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  • Report this Comment On May 17, 2013, at 9:25 PM, Mega wrote:

    "And we're not the only ones. According to Jesse Eisinger and Frank Partnoy, a recent survey found that "more than half of institutional investors did not trust how banks measure the riskiness of their assets." And 60% of hedge fund managers gave our big banks unsatisfactory marks when it came to the trustworthiness of their "risk weightings." Eisinger and Partnoy write of one CEO who "regularly hears from investors that banks are "uninvestable.""

    The fact that most people think big banks are uninvestible, is EXACTLY the reason they are so cheap. Ignore the crowd.

  • Report this Comment On May 18, 2013, at 7:14 AM, Rusty56 wrote:

    As this bank continues to produce gains, idiots like the authors will continue to be left behind. Some people shouldn't be giving others advice, period. Never put any faith in these foolish articles.

  • Report this Comment On May 19, 2013, at 6:20 AM, dragonmonkey wrote:

    I enjoyed the article, but considering the Motely Fool owns shares of JPMorgan, I'd like to see a rebuttal article from the staff explaining their perspective in light of these claims.

  • Report this Comment On May 19, 2013, at 6:20 PM, TMFBreakerRob wrote:

    dragonmonkey: "I enjoyed the article, but considering the Motely Fool owns shares of JPMorgan, I'd like to see a rebuttal article from the staff explaining their perspective in light of these claims."

    I wish I had a buck for every time I see such a comment...

    *Every* Fool article includes this information:

    "We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors."

    Reworded: There are a lot of different opinions expressed by different people at the Fool. You might see an article *for* something and another article *against* the same thing in the same day. The idea is that readers can make up their own minds.

  • Report this Comment On May 20, 2013, at 12:04 PM, TMFDiogenes wrote:

    dragonmonkey: "I enjoyed the article, but considering the Motely Fool owns shares of JPMorgan, I'd like to see a rebuttal article from the staff explaining their perspective in light of these claims."

    Here's Anand's buy articles that included JPM:

    http://www.fool.com/investing/general/2010/11/01/its-time-to...

    http://www.fool.com/investing/general/2010/11/01/its-time-to...

  • Report this Comment On May 20, 2013, at 5:05 PM, Lucy2007 wrote:

    For the past 20 something years, of all of the credit cards I have ever had, Chase has always been the best. They have exceptional customer service and have always had my back. I have no complaints with them whatsoever. I can not say that of credit cards from other organizations, where I have had awful customer service (and now no longer have those cards). For that reason, and this article, I feel I need to write a J.P. Morgan Chase stock market blog in support of investing in J.P. Morgan.

  • Report this Comment On May 20, 2013, at 7:12 PM, Hibiscusanole wrote:

    I received a modest sum from a class action suit against Chase, a part of J.P. Morgan. They mistreated credit card holders at the beginning of the recession. Their customer service was so ugly that they demanded triple the minimum payment, although my credit was in good standing.

    I'd steer clear of anyone that untrustworthy.

  • Report this Comment On May 20, 2013, at 7:30 PM, MartyParty wrote:

    Nice attempt at a cautionary tale about investing in JPMorgan, but some of the writers arguments do not stick. For one, referencing the wisdom of Warren Buffett is a bit odd. Although JPM is not an investment of Berkshire Hathaway, Warren Buffett is on record saying he has his own personal account invested in JPM. He goes on to state that Dimon is perhaps one of the most brilliant minds in the investing community today.

  • Report this Comment On May 20, 2013, at 7:31 PM, aljahbar wrote:

    Sometimes the crowd is correct in avoiding specific investments...Dry bulk shipping the last few years is an example of that. TiO2 investments were an example of that until perhaps recently. What is strikingly different about these three industries is in the later 2 the assets and the fees derived from these assets a calculable from their financials and from the transparency of the their markets. Dry bulk shipping has the Dry bulk shipping index that people can transparently view for pricing. TiO2 costs and sales are highly transparent and so these effects on future cash flows are estimable within reason.

    The derivatives markets in which JP Morgan is the worlds leader is however ..not estimable by its financial statements. As added discomfort the consistent deluge of legal suits against JP Morgan is frightening and the recent revisiting of the energy market rigging in California and Arizona markets out of JP Morgan is just too frighteningly familiar to jump on a stock that is notably at its highs going into a summer where everyone and their grandmother is now after 4 years of a bull run is waiting to finally get on the wagon.

    Although completely differing industries the euphemism that just because the crowd avoids something you should buy it is unacceptable as a reason to invest in a company.

    Buyer beware JPM and if you do... hedge the investment

  • Report this Comment On May 20, 2013, at 9:59 PM, chris293 wrote:

    JP Morgan has been around a longer time then most of the nations of the world. Quality and honesty pay off when you hang in there. Some stocks if held long enough really pay off on the original costs. Then throw in M & A, some stocks end up costing nothing, and still pay you on top of that. On the other hand, you could lose a lot of money if you are not careful.

  • Report this Comment On May 20, 2013, at 10:24 PM, skypilot2005 wrote:

    My money is on CEO Jamie Dimon. One of the very best leaders in the banking industry.

    JPM is a fine long term investment.

  • Report this Comment On May 20, 2013, at 10:39 PM, crca99 wrote:

    Thx, I was feeling cynical today and needed a reason for dour thoughts.

  • Report this Comment On May 21, 2013, at 2:48 AM, TerryHogan wrote:

    *Full disclosure* I have 100 shares of JPM in my retirement account

    I'd like the article a whole lot more if it focused less on "Stakeholders" and more on "Shareholders". As an investor, I'm much more concerned about how the shareholders make out, than how the stakeholders make out. I mean, Exxon wasn't great to 'stakeholders' in 1989, but if you had bought shares then, man you would have done well.

    I like JPM (and Wells Fargo too, though I don't own any) precisely for its size. I think banking lends itself to oligopoly, particularly at the national level. I can see the US ending up like Canada with just a handful of large national lenders. If so JPM will be one of them. Of course this could also be an argument for buying a small regional lender in the hopes that it's swallowed up.

  • Report this Comment On May 21, 2013, at 8:56 AM, TMFBane wrote:

    Great comments, everyone! We really appreciate the differing opinions expressed here.

    Several of you have noted the leadership abilities of CEO Jamie Dimon. Speaking for myself, I think he clearly is an outstanding leader who has a fine track record of creating value for shareholders. He’s also sensible and well-spoken. I actually admire him for his remarkable achievements.

    Alas, he’s also presided over a serious breakdown in internal controls and risk management at the firm. And we feel that’s one of the reasons why the downside with this investment outweighs the potential upside.

    If you haven’t seen it already, here’s a fascinating take on Dimon by The Epicurean Dealmaker:

    http://epicureandealmaker.blogspot.com/2013/05/mr-indispensa...

    Thank you,

    John Reeves

  • Report this Comment On May 21, 2013, at 9:32 AM, Bret28 wrote:

    Should I sell and perhaps return all the money I have already made?

    Bret2824

  • Report this Comment On May 21, 2013, at 8:09 PM, skypilot2005 wrote:

    Here’s a fascinating take on Dimon based on fact:

    http://files.shareholder.com/downloads/ONE/2490147965x0x6530...

    News release: IMMEDIATE RELEASE

    JPMORGAN CHASE REPORTS RECORD FIRST-QUARTER 2013 NET INCOME OF

    $6.5 BILLION, OR A RECORD $1.59 PER SHARE, ON REVENUE1 OF $25.8 BILLION

    17% RETURN ON TANGIBLE COMMON EQUITY1

    SUPPORTED CONSUMERS, BUSINESSES AND COMMUNITIES

    • Strong performance across all businesses2

    Consumer & Community Banking deposits were up 10%; mortgage originations were up 37%to $52.7 billion; Credit Card sales volume1 was up 9%

    Corporate & Investment Bank reported strong performance across products and maintainedits #1 ranking for Global Investment Banking fees; assets under custody were up 8% to$19.3 trillion

    Asset Management achieved its sixteenth consecutive quarter of positive net long-term client flows, a record of $31 billion for the first quarter; assets under supervision were a record $2.2 trillion; loan balances were up 27% to a record $81.4 billion

    • The Board intends to increase the second-quarter common stock dividend to $0.38 per share3 from the current $0.30 per share; the Firm repurchased $2.6 billion of common equity in the first quarter and is authorized to repurchase an additional $6 billion of common equity through the first quarter of 2014

    • Fortress balance sheet strengthened

    Basel I Tier 1 common1 of $143 billion, or 10.2%

    Estimated Basel III Tier 1 common1 of 8.9%4, up from 8.7% in the prior quarter

    High Quality Liquid Assets5 of $413 billion

    • First-quarter results included the following significant items

    $650 million pretax benefit ($0.10 per share after-tax increase in earnings) from reduced

    mortgage loan loss reserves in Real Estate Portfolios

    $500 million pretax benefit ($0.08 per share after-tax increase in earnings) from reduced credit card loan loss reserves in Card Services

    • JPMorgan Chase supported consumers, businesses and our communities

    $480 billion of credit1 provided and capital raised in the first quarter

    – $78 billion of credit1 provided for consumers; originated more than 260,000 mortgages

    – Nearly $4 billion of credit1 provided for U.S. small businesses

    – $123 billion of credit1 provided for corporations

    Investor Contact: Sarah Youngwood (212) 270-7325 Media Contact: Joe Evangelisti (212) 270-7438

    1 For notes on non-GAAP measures, including managed basis reporting, see page 13. For additional notes on financial measures, see page 14.

    2 Percentage comparisons noted in the bullet points are calculated versus prior-year first quarter.

    3 The Firm's dividends are subject to the Board's approval at the customary times those dividends are declared.

    4 Includes the estimated impact of final Basel 2.5 rules and the Basel III Advanced Notice of Proposed Rulemaking.

    5 High Quality Liquid Assets (“HQLA”) is the estimated amount of assets the Firm believes will qualify for inclusion in the Liquidity Coverage

    That's why you should invest in JPM lead by Mr. Dimon.

  • Report this Comment On May 21, 2013, at 8:15 PM, skypilot2005 wrote:

    BTW, I don't currently own JPM. But, I have made money off of firms Mr. Dimon has been involved with. He has high ethical standards, is a great leader and is very smart. I've followed his career for many years.

    Sky

  • Report this Comment On May 22, 2013, at 1:26 AM, snapperreef wrote:

    Very informative article, and well researched. I learned the truth of your statement,

    "We think you're kidding yourself if you believe you can peruse its financial statements and come away with an informed, clear view of the riskiness of its assets."

    when I tried to understand IBOC when HG recommended it years ago. I can't complain about the recommendation, I just could never fully understand the workings of even a relatively small bank. skypilot has a much better handle on JPM than I could ever do. Even with the information I don't think I would ever feel like I understood how it worked.

    If the NYT statement about the Federal investigations is true, I might look first to see if JPM has ever given money to or made any statements favorable to Conservative organizations. :)

    But seriously, the only item I could comment on is the Jefferson Co. bond deal and ensuing bankruptcy. I think most all down here feel that the Commission and particularly its leadership brought the bankruptcy on themselves without any coercion on the part of JPM. I believe a portion of the Commission members as well as its Chairman are in prison today regarding their dealings with the taxpayer's money.

    JPM just learned the same lesson that all banks which loan to cities like Birmingham, Stockton, and Detroit learn; it's the hard way.

    I think I'll hunt another deal other than JPM too, but not because I would not trust Dimon.

    Thanks.

  • Report this Comment On May 22, 2013, at 2:01 AM, dsciola wrote:

    Lots of interesting info here all around...

    Quick curiousity question for the authors and others interested:

    if JPM is a 'Black Box' of derivatives and other exotic financials instruements, figures, etc that no one can value...then do you feel investors should steer clear of all banks / financial institutions?

    Dom

  • Report this Comment On May 23, 2013, at 12:05 PM, TMFDiogenes wrote:

    ^ Interesting question.

    Personally, I'm very reluctant to invest in "black box" companies. It feels to me speculative (hard to assess the risks and upside), and it seems to defeat the purpose of selecting individual stocks to begin with (if you don't know what you're buying... why not just get a low-cost index fund?).

    So if someone's going to do it, they're putting your faith in the people running the black box -- can they understand and manage the black box for your benefit, and do you trust them to do so and be honest with you about the state of the company. I'm not confident enough that anyone (certainly not the people currently running the bank that I read about in the London Whale report) is capable of running a bank as complex and risky as JPM, or that they're going to be honest with me about the actual state of the company -- to risk my money on it.

    Especially with today's moderate risk-reward tradeoff --1x book value-- even based on the moderate profits the bank says it generates -- .97% roa/11.6%roe -- when there are at least 3,000 other companies that are candidates for an investment. (Unlike big institutions, my portfolio isn't multibillions of dollars, so no one's forcing us to buy it just because it's such a big liquid stock that we can sell 10 million shares at the drop of a hat. I think the size/theater/liquidity of big companies often drive more discussion and conversation than they deserve on pure investing merits.)

  • Report this Comment On May 24, 2013, at 11:22 AM, czbill12 wrote:

    There are some stocks you just have to say--I cannot invest in from a value judgement on a personal level as well. Mine include BoA and JP Morgan, mainly because of egregious practices and management. I will never support Dimon as a shareholder. Period.

  • Report this Comment On May 24, 2013, at 11:35 AM, fpartel wrote:

    Jamie Dimon's reputation is based on avoiding risk and making acquisitions of impaired companies. His track record for organic growth throughout his career is deplorable. The Celebrity CEO choice for banking by the Street should have been Dick Kovacevich at WFC. Absolutely no comparison.

  • Report this Comment On May 24, 2013, at 12:13 PM, TMFDiogenes wrote:

    "if JPM is a 'Black Box' of derivatives and other exotic financials instruements, figures, etc that no one can value...then do you feel investors should steer clear of all banks / financial institutions?"

    (Just to get a little more specific...)

    They're all a bit different, but broadly speaking, I think of JPM, GS, MS, C, and BofA as part of the black box/speculative category.

    There are plenty of financial companies including more traditional national and regional banks that are safer and more transparent. Of course, it's still important to understand the company, industry, risks, and so forth, if you're going to buy shares of them, but they're not impossible to assess in the same way that the black boxes are.

    Ilan

  • Report this Comment On May 24, 2013, at 1:23 PM, Silvertruck313 wrote:

    They must trying to drive the price of JP Morgan down, so they can buy a lot of the shares. JP Morgan is still one of the better performing bank stock since the crash of 2008.

  • Report this Comment On May 24, 2013, at 2:31 PM, JohnLynn5 wrote:

    You can make or lose money on a JPM investment, just like with any stock. The information that leads you to buy any stock can change in a heartbeat and the price can tank or skyrocket. What''s at stake here is, how do you make an informed decision with limited information or information that is not fully understood. Perhaps the axiom Too Big To Fail should be revised to Too Big To Manage.

  • Report this Comment On May 24, 2013, at 5:08 PM, truthmonger wrote:

    Good article, but.. The entire banking industry is in peril, and also indispensable to society and the treasury. They are taking big risks for low returns now, because otherwise they cant get any returns at all. Many are trying to gamble their way to salvation with flawed derivative products that are too complicated for most to understand. Huge leverage, non-transparent, complex, an over-crowded industry for now. How can one resist? So if you want exposure to banking profits, seek one that really is too big to fail, knows how to make profits, and is politically connected to boot. I'd trade JPM and GS and avoid others. Don't own them, just rent. Sometimes. Look for entry points after their next shaming before congress.

  • Report this Comment On May 24, 2013, at 5:41 PM, MorrisonCarter wrote:

    This article can not possibly be considered an analysis. If I was looking for a toilet paper company to invest in then the generalist statements would be sufficient to steer me away.

    This article is good for people looking to create a "wall of worry", people who don't want to invest in banks, people hoping to see the stock drop so they can get in and people with nothing better to do.

    The article is almost devoid of comparisons that give some idea of relative performance and there is no effort to indicate how significant problems really are when looked at as a percentage of assets, gains, losses etc.

    Finally, many of the comments actually support the bank in a backhanded way. Isn't a premium for avoiding the crisis kinda like a strategic advantage?

    Lets hear it from those in Motley Fool who hold this stock in their recommended portfolios!

  • Report this Comment On May 24, 2013, at 6:33 PM, jumpngeorge wrote:

    As a former chase customer, I found this article very interesting. While a customer at Chase, they 1) improperly charged me service charges on my account for months because they inadvertently dropped one of our accounts 2) denied our application to change our mortgage from a 30 to 15 year mortgage in spite of the fact that we were making payments to pay off the original mortgage in 15 years, took our application fee and denied our application based on information I gave them as a part of the pre-application screening 3) When I deposited the funds from the sale of our New York apartment, they made sure that I knew that I could get 3.5% if I deposited X amount...not insured of course...frankly gave me the creeps...

    Chase works for Chase. Eventually that will come back to haunt them.

  • Report this Comment On May 24, 2013, at 11:58 PM, Lexloeb wrote:

    I have similar feelings about JP Morgan that it is possibly a future too big to fail bank again regardless of what Bernanke is saying about no more too big to fail. The problem is a bank that size goes on the slide and the entire banking system and economy will go sliding right along with it. The bank would end up nationalized and the shareholders will be treated like GM and Chrysler shareholders or even worse because the present administration would actually consider doing away with limited liability and going after shareowners to get additional assets to save the banks as happened in Cypress not long ago! That's the worst case scenario but wait. Those financial figures are not permanent trend lines they are after a giant financial collapse and a poor economy thanks to the Obama administration being anti business and the federal reserve being overly simulative instead of working to lower taxes to get real economic traction. Big banks mirror that economic malaise and big ones like JP Morgan Chase are like ocean liners that cannot turn on a dime like a speed boat can. Good management at Chase Morgan can make it a solid performer in the future. The stats presented are because of past conditions not present or future conditions. Still if a banking crisis looks eminent JP Morgan and even the best of the AAA banks will go into a complete tail spin as investor lose no time heading toward the exits because of the no more too big to fail policy. Banks and any company like a bank including financial houses, investment firms, mutual funds will go down like dominos and we will suddenly then think that Bush's socialist banking fix was not so socialist after all when we see the whole thing nationalized because of a terrible panic all because of idiots like Ben Bernanke. Too big to fail really was the better policy even for libertarians like me because nothing else can stop a systemic super sell off panic when the risk is total destruction of wealth. You only have to look at Lehman in bankruptcy to understand how stupid the new new no government of last resort policy really is because it is government absolutely and only as the last resort.

  • Report this Comment On May 25, 2013, at 5:05 AM, ganesha123 wrote:

    JPMorgan hardly pays well to their employees compared to the hedge fund out there in NY.It is well suited to people who start in their career for showing some experience in their resume and then move to serious companies..because of its size and name,some people waste out their years and career there..its a good company for those who do not want to learn and enjoy to wash their hands in the flowing river as long as it lasts..this company may be next to join Lehman's Brothers ..forget about investing in such companies..trust me people working there learn how to play politics more than anything else..

  • Report this Comment On May 25, 2013, at 1:18 PM, jmv321 wrote:

    Please ! Any one in the stock market needs to know: what YOU buy, some sells...what YOU sell some buys.

    Thus there is - needs to be - an other side, an other opinion, ....

    That provides liquidity... and trends...more buyers--> up tick...More sellers ---> down tick.

  • Report this Comment On May 27, 2013, at 5:47 PM, nonononoyes wrote:

    Nice article with some very good points and things for us JPM owners to think about. But in saying "When Warren Buffett looks at an investment he looks for businesses run by honest people" the author should mention that Buffett frequently mentions that he owns JP Morgan stock in his personal account and I think it is also a BRK holding.

  • Report this Comment On May 28, 2013, at 2:20 PM, wpesci01 wrote:

    Always wonder what the motivation is to write something like this? Looking for advice for what to invest in, not what not to invest in. On that note I will buy some more JP Morgan. Thanks for the tip.

  • Report this Comment On May 30, 2013, at 8:46 PM, BernerPaul wrote:

    Contrary to many other posts, I liked the article. Although I do not own shares of JPM, I have an investment account with them because they manage the profit sharing plan for my previous employer. For those interested in learning more about JPM's history, take a look at, "The House of Morgan" by Ron Chernow. As this current article shows, not much has changed over the years regarding how JPM does business.

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Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2438855, ~/Articles/ArticleHandler.aspx, 12/19/2014 10:49:30 AM

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