Five years after the ‘Financial Crisis’, Morgan Stanley is finally ‘Coming Out of the Blue’.
What is ‘Coming Out of the Blue’?
For those new to my blog, “Coming out of the Blue” is an investment strategy where investors purchase large capitalized equities as they emerge or have a positive transit of EBV-3. Since our last EBV line is colored blue, we call this “Coming Out of the Blue”. This investment strategy is unique to Model Price and a buy and hold strategy that can take many years to unfold. I have not only blogged many times of this unique investment strategy but also blogged on specific company names that I believe qualify initially for this investment strategy with additional follow up blogs when positive transits occur on specific companies that qualify from time to time.
Again, I do emphasize that I am not specifically recommending Morgan Stanley for purchase. The purpose of this blog is to highlight specific situations that are teachable in relation to our model price work in the hope you can learn our concepts with the potential of passing these concepts unto others.
Model Price Chart of Morgan Stanley
Morgan Stanley with weekly price bars, EBV Lines (colored lines) and model price (dashed line)
For those interested, a daily updated chart of MS subsequent to this post will be maintained on Facebook, here.
Much has been written and filmed on Morgan Stanley and how the company escaped bankruptcy by the skin of its teeth some 5 years ago. Morgan has substantially changed its business from proprietary trading to client advice, money management and brokerage. Morgan’s change in business practices should achieve some sort of multiple on the company’s book value. (In Model Price language MS should be able to achieve a share valuation at a minimum of EBV – Green Line on our model price charts – to a maximum of EBV+2 – Grey Line – over a period of time.)
Morgan Stanley was at the center of the hurricane in the largest financial crisis since the Great Depression. The company obviously survived and five years later having had a positive transit of EBV-3 ‘the market’ is finally giving its blessing that MS’s balance sheet has value and ‘the market’ has started to form a connection with a positive transit.
Some links to my “Coming Out of the Blue” blogs (but not all).
Questions and Answers about “Coming Out of the Blue!”
How Jumbo Gains are Possible Using Model Price – Part 1
How Jumbo Gains are Possible Using Model Price – Part 2
Citigroup – “Coming Out of the Blue”
Goldman Sachs – Breaking out of the Blue! (Again)