The following was written by an analyst who has long criticized how Wall Street covers itself. It is published anonymously due to his firm’s legal & compliance rules.

~~~

At 9:43 AM ET on CNBC, Dick Bove (Rochdale Securities) said Goldman would pay a fine and this will pass (3:00).  He also called the stock an agressive buy at $171 (4:45).  At 6:00 minutes Mark Haines begged him to reconsider his position arguing that fraud is a big deal.  Bove was undeterred and reiterated his buy recommendation stating a second time this was a short-term issue (7:00).

http://www.cnbc.com/id/15840232?video=1470603264&play=1

Then at 6:35 PM ET with the stock at $160.70 ($11 below his aggressive buy recommendation this morning) …

  • Bloomberg.com – Goldman Sachs Executives Should Resign, Bove Says
    Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein and finance chief David Viniar should resign over fraud allegations, according to Dick Bove, an analyst at Rochdale Securities. “Will Lloyd Blankfein, CEO, and David Viniar, CFO, maintain their positions in the company? I do not think so,” Bove wrote in a note to clients today. “Someone must ‘fall on their swords’ for the devastating decline in this company’s persona and they may be forced to do so for public relations reasons.”

Comment

Just six months ago Bove stuck his foot in his mouth by offering instant analysis on Wells Fargo by exciting giving a positive instant reaction to their earnings only to change his opinion to a sell for clients six hours later.

As a result of this embarrassment, Bove told Dow Jones newswires:

“I’m not going to do it anymore. I’m going to have to see the numbers before I go on air,” Bove told Dow Jones Newswires Thursday. “It creates an untenable situation.”

Dick, maybe you should expand your self-imposed gag order beyond numbers and not offer an opinion on a SEC complaint until you actually read it, or at least the three paragraph summary.

Category: Analysts

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

12 Responses to “Dick Bove – Open Mouth Insert Foot”

  1. VennData says:

    Recall BP celebrating the anniversary of Dick Bove’s “the bottom is in” call that was not quite prescient…

    http://www.ritholtz.com/blog/2009/01/money-ethics/

    Maybe BP should celebrate this Lostradamus annually.

  2. SINGER says:

    Bove did reco C on Bloomberg in Jan? 2009 at a buck…..

  3. jmf says:

    Moin from Germany,

    Bove is really the posterboy of “Wall Street Finest”…….

    Lehman Brothers (LEH) / Hostile Takeover?

    Will it happen? I do not know. Should it happen? Absolutely, opportunities like this are rarely evident in the markets.

    http://ftalphaville.ft.com/blog/2008/08/22/15320/the-bove-note-on-lehman-in-full/

  4. Jim Greeen says:

    How in the name of god does someone like Dick Bove ever get on the air???? He is known for making terrible calls after terrible calls after terrible calls!!!

    How any self respecting producer can allow this kind of spew on the air baffles me. Maybe Dick has some pictures from one of the Christmas parties.

    Please: NO MORE DICK BOVE!!!

  5. constantnormal says:

    @BR — a bit OT, but I think you’re going to need an upgrade to your comment filters, as it seems the posters at your site are dumber than the average blogger’s) — I’ve run britholtz against mish, yvessmith, pkedrosky, and TBP commenters consistently come across as dumber

    http://www.tomscott.com/stupidfight/

    …. bzzz/click … CARRIER LOST

  6. iratherbe says:

    Duh! Who pays heed (or for that matter … pays compensation) to these archetype analysts? They are passe, played out & so 90′s.

  7. Pete from CA says:

    Bove did not say that GS was an aggressive buy at $171. He said if it goes down significantly it will be an aggressive buy. He happened to say this while the chart showed GS at $171.

    I guess attention to detail is not a prerequisite for employment as a financial analyst…

  8. mbelardes says:

    I’m sorry, but what is wrong with what Bove said? This analysts posts is completely misguided.

    First Bove says, buy the stock as this will pass.

    Then he says the management team needs to resign.

    How is any of that in direct conflict? Had anyone said “Gee, Ken Lewis really sucks and has to go … but BAC is a great buy right now” they would have been correct. Keep in mind the SEC also sued and settled with BofA over a similar disclosure issue in the BofA/Merrill deal.

    Bove also said, accordign to the linked article, ““I do not believe institutions will stop trading with Goldman Sachs over this issue,” Bove wrote. “The company’s presence, systems, capital, and expertise in trading markets make it number one in the world in this activity.”

    What I’m getting at is, Bove and all of us have seen enough SEC slap on the wrists to know that his comments are not unqualified. Does anyone really think this one charge is going to put Goldman out of business?

    But most of us probably would agree that the current Goldman management have not improved the firms image and Bove is merely saying they should resign and clean house.

    Conflicting opinions? Not in this instance.

  9. Jim Bianco says:

    When GS was at $171 it was already down $12 for the day. That’s not a signifcant decline???

    mbelardes – I’m trying to square you thought that its buy the stock this will pass yet top management has to go. This makes no sense.

    And yes, I for one believe this one charge COULD bury Goldman. Yes, it is that serious. Try to understand it. This is not like most SEC charges.

    I’m assuming Goldman will lose. If they do, it will lead to dozens more just like it.

    No Goldman will not collaspe like Lehman. Instead it will be sucked dry of money and resources and in a few years it will be bought by a larger bank (Citi, Wells, JPM) and fade into a division of that bank.

    See what happened to Solomon Brothers in 1991. That one charge killed them in this exact way (and, ironically, Buffett held a large preferred in them).

  10. mbelardes says:

    Jim,

    I’m just saying, in comparison to SEC actions and the full extent of litigation, we’ve seen time and again these slaps on the wrist have not been very extensive. I used BofA as an example. Go ahead and compare it to Solomon Brothers but wasn’t that hundreds of millions of dollars of fines racked up for defrauding the government at the direction of high ranking corporate officers? Here we have a 26 year old caught ripping off his client under the guidance of … to be determined.

    I reitterate, maintaining a buy rating on a company after a 15% decline in the stock value due to a securities fraud charge and calling for the resignations of a management team that has squandered a company’s image and goodwill is not a foot-in-mouth conflicting opinion.

    I’ll give you this though, the charge on Friday seems like a fishing expedition to me. Discovery in a civil case is a real bitch to deal with and I’m sure the Department of Justice is just waiting to see some fresh emails, pitchbooks, and facts role out of this civil case to start nailing Goldman Execs to the cross with grand jury subpoenas and indictments. THAT could very well bury Goldman a la Arther Andersen style, but then you would be betting our government grew a pair in the last couple months…

  11. mbelardes says:

    One last point (because I sound like a Dick Bove defender), I can’t stand Bove and think he should be banned from TV for the sole reason that we should no longer be subjected to his over-the-top fashion that is only meant to distract us from his awful calls.