Does this create an opportunity?
Early contrarian investors in 08 such as Bill Miller were trampled by the herd and in retrospect buying way too high. Paulson/BAC and Ackman/C have been similarly hurt trying to time to bottom and inevitably sells at the bottom:
Paulson in BAC 2011
Ackman with Citi in 2012:
So, what is different now that could make banks a buy? I actually won't go into the fundamental reasons because they are common place. At a high level, bac/c are trading at slightly less than 1x tangible book and all are trading ~10x or less "normalized" earnings.
I don't believe fundamentals can be an effective timing tool alone here, so let's look at market psychology. Are flows finally moving into financials?
As such, is now a good time to buy and hold for the next 3-5 yrs (until normalization?)
Disclosure: no position, but may change at any time
i bought about6 months ago so hopefully yes
I would be interesting to hear more perspectives. I don't have enough background or knowledge to make an informed decision.
I'm actually too heavy in cash right now (bad time, I know). I actually meant to spend some time looking at the big banks today, but got too busy.
The main problem for me is that even though I understand the businesses from a high-level, I never feel comfortable bc I feel like their earnings are so succeptable to accounting shenanigans that I don't follow/understand closely enough.
Overall, I feel like with the run up we've seen it's hard to justify buying equities now, but I'm sure I'll just miss out on more $ if I don't.
JPM & WFC are definite buys.
Other than that, no big banks are worth buying right now. They are overheated.
Mid-sized banks to buy:
Bank of New York Mellon BB&T Corp PNC Financial State Street
Overall, the following stocks are my most bullish bets for the year:
Talisman Energy BP PLC Valero Seagate Morgan Stanley Daimler Nucor Corp BNY Mellon Arcelor Mittal Conoco Phillips Fifth Third Bancopr and Metlife Inc.
Really?
Yeah.
I bought JPM and WFC recently. I would not buy BAC.
bac just got upgraded by fitch...good call /sarcasm. of course i'm biased b/c i got in at december
I have some long positions in KEY, MS, C, BAC and XLF since early 2012. Not touching energy stocks for a while.
Fannie Mae is all I am considering now. Return to profit again with potentially amazing up side
Advice from a pro:
Buy the TARP warrants
indeed! dividend protection + implied leverage. They do seem pretty expensive now vs: stock though.
Accusantium exercitationem et eos rerum pariatur et ducimus. Voluptas quia iusto et non earum est. Et quis aut omnis facilis nobis nemo fugit repellendus.
Perferendis dignissimos hic eos eum dolores voluptas. Vel autem at sequi quos qui est. Velit minima eius quaerat voluptas. Aut illum in harum sit repudiandae. Maiores et quasi excepturi ad perferendis deleniti ipsam. Unde esse temporibus error mollitia velit dignissimos ut.
Beatae adipisci qui expedita debitis deleniti qui cumque. Assumenda asperiores ab et optio rerum aut molestiae. At tempore et ea quo eum quia. Iste recusandae repudiandae accusantium hic. Similique omnis rem quidem corporis et. Libero consequatur provident nobis repudiandae.
Excepturi quaerat id quia in enim quam sint totam. Laboriosam voluptatibus veritatis omnis alias quidem facilis. In iure et distinctio esse earum doloribus. Necessitatibus dolores tempore excepturi.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...