Could Edward Jones' Capitalization be this good?

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Sep 20, 2008 8:21 pm

Could Edward Jones be in this good of shape?:

Take a look:

Scroll to last page to Select U.S. Brokers and their Capital Multiples. Hard to believe.

Sep 21, 2008 6:50 pm

The answer appears to be “maybe, but no one cares”? The numbers probably look good because they don’t do any i-banking/trading to speak of, or anything that takes much leverage (if any). They are slow and steady, which has been a good thing lately.

Sep 21, 2008 7:25 pm

bny’s money market broke the buck last week so take the list for what it is worth.

Sep 22, 2008 10:34 am

Jones only uses leverage to grow their infrastructure, not to invest and generate profits.  They also use some to put bonds into inventory for client sales, but mostly for infrastructure.  Not good or bad, just the way they do business.  EDJ is pretty much the same as how most brokerage firms would look if they spun off their B/D’s into their own firms (in other words, there was no I-Banking, etc.).

  It's strange, but it seems that we are one of the last few large firms that do strictly broker/dealer work.  Not sure what other business RayJay and LPL do outside B/D work.
Sep 26, 2008 9:20 pm

And to think there were many, many people on this board who said Jones would fail because they would have capital problems. It’s interesting during these times where many, many firms ARE struggling with their capital requirements that there has only been 3 responses in this thread. The silence is deafening!!!

Sep 27, 2008 12:07 am

I guess you have your answer on RayJay.  See the lead on this website.  Bet this pisses off that loser bspears.  I know he thinks the more he prays EJ fails the more likely it should be to happen.  I feel for him.  It must be disappointing.  Primo, I know I owe you a response, I have been a bit busy working.  I promise I will get back.  Doing the ACAT’s in has been a bit more important.

Sep 27, 2008 9:18 am

Yes, nobody wants to admit that EDJ might, just MIGHT be OK.  We are JUUUST going to squeek by with capital.

Brokerage Firm Capital Multiple

Edward Jones 19.90

Bank of New York Mellon (Pershing) 15.80

T. Rowe Price 13.98

Scottrade 13.86

OptionsXpress 12.65

Raymond James 11.92

Merrill Lynch 8.62

Fidelity 7.93

Bank of America Securities 5.97

ING Direct 5.85

Schwab 5.85

Lehman Brothers 5.43

E Trade 5.00

TD Ameritrade 4.72

Citi Smith Barney 4.06

Goldman Sachs 3.90

Morgan Stanley 3.21

Oct 1, 2008 11:19 pm
  Soothsayer, cat got your tongue? Weren't you one of the naysayers regarding Jones when it came to them failing due to a lack of capital?