Published at: www.ft.com
Capital Without Representation
June 30, 2009
Very tricky investing when it comes to buying stock which can be revalued by the adjustment of the underlying security asset. Buying stock in a bank holding company is similar to buying options. Various issues develop from the government nationalization of previously held assets by the private sector. Obviously the first issue is the principal stripping (inevitable price valuation destruction), and the second issue is becoming; which controls are available to the existing private sector holders (those in at the beginning) and those new government (government of the people by the people) holders.