7/14 If you have any bank deposits over 100k, I would say now is the time
change that ASAP.
http://online.wsj.com/article/SB121605305718551305.html
\_ This sentiment is 100% correct. I'm not worried about you fools--
it's your parents and relatives. Small business owners have it
roughest because payroll can easily be > $100K.
\_ Just put your money in a bank like Well's Fargo or BofA.
\_ Wells is definitely a safe bet, but I'm not so sure about
BofA. Are you certain they aren't exposed? Keep in mind
that they bought Countrywide as well.
\_ I think they are both "too big to fail" though WFC is
certainly the stronger institution. I don't have $100k
in cash anyway, so it is all moot.
\_ What about Charles Schwab? Is it safe?
\_ I am buying KBE (seriously).
\_ Reversion to mean strategy? I'd say that's probably a good
short term bet and an extremely lousy long term bet.
\_ I actually think it is a good short and long term strategy,
though I will certainly take some profits on any move up.
\_ Why are you long on financials? Just playing
devils advocate, or do you have a good macro
justification? The problems with financials are not
purely sentiment, they have a solvency issue.
\_ No, I actually got 100% out of financials back in
Dec, when my stops got hit. I have been itching to
get back in and am starting to buy now. I think
this is a selling climax right now, brought about
by the IMB failure. I am sure some more banks will
fail, but not too many of them. I am looking at
a recently released (today) research report from
Citibank. They are saying that they are revising
BAC 2009 profit forcast down from $3.57 to $2.91.
This is a huge drop, to be sure, but implies a
forward P/E of 7. The banking sector will probably
recover in 2010, making it an even better deal then.
Buying on drops has worked our pretty well for me,
though I admit I am often early, like most
contrarians.
Check out the chart on these three the last time
we had a housing meltdown:
http://tinyurl.com/6pgkpm
\_ Update: the BAC I bought for 20 and change a week
ago is now up over 30. |