Buy BSC/financials

[Bowgett]

Quote from nysetrader78:

You shouldn't be so proud of yourself. If Bernanke hadn't been pressured into bailing everyone out by his cronies then you would have had nothing to save you from huge short term losses. But then again, you probably knew exactly what would transpire over the weekend right?

I didn't know. I bought ahead of cuts which supposed to be next week and btw they might cut again. FED cut 175bp already which is very bullish for financials.

 

[S2007S]

Quote from MrDODGE:

Stay away from financials, don't try to pick a bottom.

everyone always says dont try and pick a bottom, Im sure there going to fall further but no one ever knows where a bottom is, for all we know they could have bottomed yesterday....


:eek:

 

[nysetrader78]

Quote from Bowgett:

I didn't know. I bought ahead of cuts which supposed to be next week and btw they might cut again. FED cut 175bp already which is very bullish for financials.

Exactly my point, the cut that was supposed to happen next week was already "baked into the cake". Bernanke did everything he could to hold off from being pressured into making an early move, but finally succumbed to the pressure.

You are right, in theory cutting rates is very bullish for the financials and without a doubt the situation is better for them now than it was only a few days ago. However, there are still many underlying problems.....like when will the banks finally start valuing their assets appropriately and the realization that if the FED has to cut rates this quickly and drastically, the situation truly is worse than anyone has been willing to acknowledge.

My personal opinion is that until we see more financials that are willing to devalue what they consider their "prime" assets, it is nearly impossible to have a good understanding for the stocks true value at these levels. Prime assets are supposed to be backed right......so who is going to pay if that day comes, the insurers don't have the cash.

Anyway, I dont wish to start a pissing contest with you Bowgett....just sharing my views.

 

[Bowgett]

Quote from nysetrader78:

Exactly my point, the cut that was supposed to happen next week was already "baked into the cake". Bernanke did everything he could to hold off from being pressured into making an early move, but finally succumbed to the pressure.

You are right, in theory cutting rates is very bullish for the financials and without a doubt the situation is better for them now than it was only a few days ago. However, there are still many underlying problems.....like when will the banks finally start valuing their assets appropriately and the realization that if the FED has to cut rates this quickly and drastically, the situation truly is worse than anyone has been willing to acknowledge.

My personal opinion is that until we see more financials that are willing to devalue what they consider their "prime" assets, it is nearly impossible to have a good understanding for the stocks true value at these levels. Prime assets are supposed to be backed right......so who is going to pay if that day comes, the insurers don't have the cash.

Anyway, I dont wish to start a pissing contest with you Bowgett....just sharing my views.

You are absolutely right but you cannot wait for "all clear" sign. By that time all gains will be gone. Many of the things you said already known and somewhat discounted in current prices. Also remember many troubled portfolios are in wind-down mode and new loans banks make since about Aug 07 are high quality at high rates and with FED funds rates going down means margins are expanding significantly.

 

[Opra]

FWIW, I put in offers to sell some '09 puts on financials again. Back in Aug. 07, I sold some on BAC and IAI (latter, broker/dealer etf, is very illiquid, sold jan08 40 put, and in panicky market got $2.5 for it). 2-6 weeks later closed them $.65 and .50 as market rebounded a bit and vol came down from >30 reading to 20's. Similar situation like today's but more headlines these days. So a play on rebound and on vol shrinking. Of course, always sell manageable amount when dealing naked puts and be ready to own underlying.

 

[S2007S]

Quote from drsteph:

Bear market finished for now. Wait until February. Go long if you like.

finished, in only 2 days..


hmmmm

bull market lasted over 5 years, why can the bear market last at least 5 weeks.

 

[turkeyneck]

"The market can go much lower than you can remain solvent." - Mark Fisher in "The Logical Trader"