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Millionaire Now! by Larry NusbaumThis blog is based on the organizational principles found in my new book, "Millionaire Now! - A Financial Toolbox with Seven Steps to Wealth". |
Are Financials Suddenly Cheap?
I suspect the bounceback has less to do with "fundamentals" and far more to do with short-covering, especially financials.
Are financials suddenly cheap? I say "NO. There are too many losses still to come. There's too much work to be done to rehabilitate the financials from the worst financial crisis since the great depression. And, in coming weeks, there simply won't be the excitement to push up, let alone hold their present stock prices, which will slide down." In today's present frenzy, it's too early to short the financials. But it soon will be.
Want to read more? The New York Times has a piece, Bank Investors Expect Less as Losses Mount. The article has these words:
But it has now been a year since the credit crisis erupted, and, so far, the optimists have been proven wrong time and again. Skeptics say it could take years for banks to recover from the worst financial crisis since the Depression. And even when things do improve, the pessimists maintain, banks’ profits will be a fraction of what they were before.
There are many reasons for caution. Home prices continue to decline, and defaults are accelerating on a wide range of loans. As lenders struggle, loans are becoming even more scarce for hard-pressed consumers and companies. That, in turn, could slow any recovery in the broader economy.
The Wall Street Journal has a piece "Five Banks Post Losses -- and Their Stocks Soar". The piece contained:
Five of the largest U.S. financial institutions, led by Wachovia Corp. and Washington Mutual Inc., reported combined quarterly losses of more than $11 billion. But their shares jumped an average of 14% on rising hopes that battered bank stocks have fallen about as low as they can go.
The buying frenzy, also fueled by short sellers covering bearish bets, was at odds with the mostly somber assessment by bank executives Tuesday of the shaky loans and struggling economy bedeviling the industry.In a sign of the loan woes likely to haunt them for years, Wachovia, Washington Mutual, SunTrust Banks Inc., Fifth Third Bancorp and Regions Financial Corp. socked away nearly $13 billion in loan-loss provisions. Wachovia, Regions and Fifth Third also cut their dividends in order to conserve cash.
- How (bad) Certain Investments Did Last Week
- Dow Dips Below 8,000 Threshold, Reaching April 2003 Levels
- Some Insight From The Blogs:
- Canslim.net Morning Comment And Links (for Traders)
- Stocks Fail To Turn Up; Sec's Shorting Ban On Financial Shares Expires
- October 2008
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- Millionaire Now!
- The 7 Steps to Millionaire Now!
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- RETIRE RICH: Survival Guide
- ASSET ALLOCATION MODEL
- THE BIG ROLLOVER IS HERE
- THE END OF THE GRAND SUPERCYCLE?
- Marin Real Estate Bubble
- The Average Joe Investor
- Millionaire Now! by Larry Nusbaum
- Don't Mess With Taxes
- The Prudent Investor
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Made several great trades today. Traded the QID, QQ [read more]
Today we have the Fed speaking and release of Fed mi [read more]
NOTE: Please click on the charts below to enlarge them [read more]
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