Time to buy financials ?
- Thread starter ASusilovic
- Start date
Media pundits are pumping the bottom which usually means stay away a little longer. Wouldn't mind a bit more blood after earnings season.
http://ap.google.com/article/ALeqM5hEk5TzJabMTolW09kiR9fkDEgqSAD8U3SGJG2
When these suits are just starting and none have been adjudicated yet so there is no way of knowing what liability the banks have don't think one can buy financials for anything more than a short term bounce.
When these suits are just starting and none have been adjudicated yet so there is no way of knowing what liability the banks have don't think one can buy financials for anything more than a short term bounce.
But "Real Estate" and "financial stocks" need to be seperated here. IF, IF, IF they wrote down all their RE holdings at .30 cents to the dollar, they could be fine. Actually could be in good shape longer term as that could have been a classic market overreaction. I am by no means saying that the bottom is in, just pointing out that trying to reason with the market like that usually doesn't work.
IMO, the worst case scenario is that we are 10-15% away from the bottom in an ETF like UYG. I'm not waiting for that bottom. I'm taking positions now because the upside potential is well worth the risk.
Secondly, something that is being overlooked in this thread and those who are "bashing" the financials, the government is going to step in and bail out a lot of this crisis. The psychology and fundamentals IMO point to a bottom being very very close.
Secondly, something that is being overlooked in this thread and those who are "bashing" the financials, the government is going to step in and bail out a lot of this crisis. The psychology and fundamentals IMO point to a bottom being very very close.
Always good to take a look at ABX Indices :
ABX - HE- AAA 07 - 02
ABX - HE - BBB 06 - 02
And by the way : RE prices are always a function of "real" interest rates. So when FED FUNDS RATE will be at 3 %, what kind of price appreciation can I expect in the value of my RE holdings ?
Here is a piece of paper from Western California University on this topic :
Real Estate Lending: A Year 1999 and 2000 Forecast as a Function of the 30-year Treasury Rate and the Consumer Price Index from a Simple Aggregate Expenditures Perspective
http://paws.wcu.edu/mulligan/www/NCES99-14.html
ABX - HE- AAA 07 - 02
ABX - HE - BBB 06 - 02
And by the way : RE prices are always a function of "real" interest rates. So when FED FUNDS RATE will be at 3 %, what kind of price appreciation can I expect in the value of my RE holdings ?
Here is a piece of paper from Western California University on this topic :
Real Estate Lending: A Year 1999 and 2000 Forecast as a Function of the 30-year Treasury Rate and the Consumer Price Index from a Simple Aggregate Expenditures Perspective
http://paws.wcu.edu/mulligan/www/NCES99-14.html