Any reasons not to buy JP Morgan Chase stock?

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Spungo

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Jul 22, 2012
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https://www.google.com/finance?q=NYSE:JPM&ei=QiEqUvDOH6nLiQLSSg
Range 51.28 - 52.66
52 week 37.50 - 56.93
Open 52.41
Vol / Avg. 15.13M/15.58M
Mkt cap 198.20B
P/E 8.79
Div/yield 0.38/2.89
EPS 5.99
Shares 3.77B
Beta 1.34
Inst. own 74%

I was thinking of adding this one to my imaginary stock portfolio because the PE ratio looks good, the yield is ok, and the company's net profit margin is 25.77%. Is there any reason not to buy this stock? The only thing I can think of is that it's not currently sitting at fire sale prices. Any input at all would be helpful.
 

Spungo

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Jul 22, 2012
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Sure, it's an imaginary portfolio anyway.
But picking the wrong thing ties up imaginary cash, preventing me from buying better things. The market is due for a correction, but I don't know when or how big that will be. Quantitative Easing is one of the things keeping the stock market up right now.

Another thing that looks a bit odd is how the most recent insider transactions are all sales.
http://finance.yahoo.com/q/it?s=JPM+Insider+Transactions
 

Lyfer

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May 28, 2003
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Asking ATOT for financial advice is like ..... (You fill in the blank)
 

KB

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Another thing that looks a bit odd is how the most recent insider transactions are all sales.
http://finance.yahoo.com/q/it?s=JPM+Insider+Transactions

Look at the net sales/purchases for the last 6 months. Purchases are higher.

Purchases 745,086
Sales 216,253

Insider sales can be an indictor of bad things coming but not always. Often managers/directors are given shares or options as bonuses instead of money. Since they would rather have money, they sell, making it look like the rats are fleeing a sinking ship when that is not the case.

JP Morgan looks to be making a lot of money and they will continue to do so as long as the economy is improving. The company is involved in so many parts of the financial system (too big to fail) it is hard to figure out how they will do in a rising interest rate environment. Higher interest rates will increase their net interest margins for their loans, and the returns from their insurance holdings; however it will likely hurt their hedge funds and investments in the short term. I see little reason not to buy JP Morgan except that they are near a 10 year high, but there may be plenty of room to keep going.
 

iGas

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Feb 7, 2009
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The numbers does show that JPM to be a good buy at the moment. However one must be careful because JPM is under investigation for manipulation of the energy market, and people like Warren Buffett hasn't jumped into it if it is such a great stock.
 
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mshan

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Nov 16, 2004
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JPM and a $2 trillion dollar margin call ("economic Pearl Harbor", as Warren Buffet vaguely referenced in 2008? (his interview with Charlie Rose, I think in October 2008):

http://www.zerohedge.com/news/2013-03-04/did-us-government-sanction-liquidation-lehman-brothers

http://londonbanker.blogspot.com/2011/05/concentration-manipulation-and-margin.html


Realistically, though, it does seem like JPM will just continue to get nickel and dime fines for whatever true role they had in the stock market crash of 2008, not admit guilt, and be free of further liability going forward (though cloud that politicians will turn their guns on them again, even if it is just political theater as usual, in future always persists).

If you want to dabble in financials, do some google research on Bruce Berkowitz and his Fairholme Fund (http://portfolios.morningstar.com/fund/holdings?t=FAIRX&region=USA&culture=en-US) quarterly reports for his mutual fund investors. He's quite a gunslinger, has a huge position in AIG, and is trying to hit a home run in Fannie Mae and Freddie Mac.



Pure Fiction (?): http://movies.netflix.com/WiMovie/Margin_Call/70167125?locale=en-US
 
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