Jim Rogers on China and BofA
Some days I feel like ranting about markets, some days I let other do my dirty work. Since I don't have the funds that Jim Rogers does, I can cash the ego bonus of him echoing my sentiments on a few key issues.
The only bad thing about what is shaping up to be a beautiful day, is that I can't embed directly off the CNBC website. What better than to have than Jim's stupid-like-a-fox grin, country drawl and old-school bow tie staring you in the face when you browse over to WSO?
I completely agree on both counts with Mr. Rogers and though he has been way too bullish on China (IMHO) over the past few years, I always like to hear what he has to say because he is not afraid to change his opinion and never seems concerned with ego or personal politics clouding his judgment.
Since I've done quite a bit of writing on my China related views lately, I will focus on the bank stock part of the interview.
If you read me often you know that I hate traditional valuation methods. I don't discount market caps, p/e ratios and the like, I just think they're not very useful where there isn't a transparent market.
Today, few markets are.
The financial sector and bank stocks are anything but. Using and relying on traditional valuation methods which rely on accurate and truthful balance sheets is dangerous when attempting to analyze them.
There is so much garbage left on many BB balance sheets that traditional valuation methods are not going to give you a clear picture of anything going forward. BofA is everybody's favorite whipping boy because of Countrywide, but they are far from being the only culprit.
We are seeing some good signs in the banking sector. Wells Fargo just posted record profits , while Goldman made excuses and Stanley fell on his face . Still, there are no guarantees that anything will change in regards to actual practices at large banks and this should be a warning sign to those looking to jump into financials.
We are starting to see major retrenching signals and populist Washingtonians may even be realizing that slushing turds under the carpet doesn't work. Until there are some real resolutions to the financial crisis fallout, however, I am staying away from bank stocks.
I am now going to throw on my goofiest grin and chirpiest drawl and go enjoy my day. I don't have a bow tie, but I'm going to cheese just as hard as the old man does.
My parting thought for today...I would much rather be Jim Rogers than George Soros,
take that to mean whatever you think it may.