Bank stocks

[sweeps]

Is it time to buy these puppies?

Bank of America: $4.70
Citigroup: $3.49

... or would I just be catching a falling knife.

[disneysteve]

I keep asking myself the very same question. Are they really "too big to fail" or will they end up getting split up into a bunch of little pieces and erasing any shareholder equity that still existed?

[GREENBACK]

This is an interesting subject. Obama has chastised these folks for inappropriately giving bonuses and buying things, etc.. He is even calling for a cap on what they can earn if they took part of Paulson's bailout. If this has the effect of turning things around this could be a wonderful ooportunity to buy stocks that would never be any wear near this low in good times.

It's a bit of a gamble to buy in but I somehow feel that the major institutions that are still around will survive. I don't think the gov't want's any more failures and as much as I disagree with bailouts, I think they'll continue them if it keeps the big banks afloat.

[humandraydel]

There is a very real possibility of these banks becoming nationalized (they are almost there already!). If that happens, the common stock holders will (probably) be wiped out. The rewards are great, but so are the risks. If you have gambling money (not sure I'd even risk "play money"), it may be worth the risks.

Just beware that while these banks ARE too big to fail, that doesn't mean any value will remain to the stock holders.

[banditfist]

There is a very real possibility of these banks becoming nationalized (they are almost there already!). If that happens, the common stock holders will (probably) be wiped out. The rewards are great, but so are the risks. If you have gambling money (not sure I'd even risk "play money"), it may be worth the risks.

Just beware that while these banks ARE too big to fail, that doesn't mean any value will remain to the stock holders.

Well said!

[sweeps]

The cap on executive salaries is largely symbolic. The banks will find loopholes. I've read that Obama is willing to throw the populist crowd this bone so he can get other things taken care of.

[disneysteve]

Just beware that while these banks ARE too big to fail, that doesn't mean any value will remain to the stock holders.

Excellent point.

If you want to invest in banks, you might do better to do so with some smaller regional banks that are on solid ground because they weren't weighed down with toxic sub-prime loans and the over-leveraging that sunk the big boys.

[banditfist]

Excellent point.

If you want to invest in banks, you might do better to do so with some smaller regional banks that are on solid ground because they weren't weighed down with toxic sub-prime loans and the over-leveraging that sunk the big boys.

You have to be VERY careful with regional banks. While true that their residential loans may be of a higher grade, there commercial lending is absolute crap. Think about all those strip malls and mom-and-pop shops going under.

Look at SunTrust (STI) and Regions (RF) banks. Their stocks have been devastated in the last 3 weeks. Both of them have received TARP I monies as well.

I would look at a non-leveraged ETF if you are considering on investing in financial assets. I have a position in FAS (3x leveraged ETF financials). It moves more like an option and there is slippage. I am hoping for a slight bump when Obama finally makes an announcement on what Geithner plans on doing. I will drop it. I have a small loss right now, but I want out.

[JBinKC]

I won't touch them for a long term hold until there is strong evidence the prices of real estate are stabilizing.

The recent tax credit they gave to buy an existing home is encouraging but I think its implementation is a little tardy to make a big effect given the current rash of job insecurity.

One fact I do know is there are plenty of mortgages in force that still have teaser rates attached that will have to be refinanced at higher rates at likely 30-40% more than its current FMV meaning it is highly probable those mortgages will default and these mortgages peak in mid 2011.

[Broken Arrow]

I've been staring intently at bank stocks as of late.

The thing about C and BAC is that both are being clobbered for a reason.

I prefer something that is being clobbered by proxy, but is in itself a healthy company. Unfortunately, the pickings are slim in the financials, and the only bank stock I'm willing to trade right now is Wells Fargo (WFC).

[simpletron]

at the moment, i'm still researching bbt. everything so far points to it being very well capitalized compared to other banks(even wells fargo) and it is still making money. but it also has a premium price compare to other banks and they just change CEO. so this along with wells fargo are the bank stocks on my watch list.

[sweeps]

Guess I missed the boat... BAC is up 26% since I posted this.

[EEinNJ]

I took a small position in C back in December when a bailout was pending, made 50% and sold it. Now I'm glad I did, it's back down again. I got lucky.

The news continues to reveal there is much more going on here than an individual investor can know. You don't know what you are buying, or how much risk you are taking. Come Monday you could find out BoA or C has been taken over in toto by the Gov't. We have no way of knowing, but the suits already do. The game is rigged.

[Broken Arrow]

I missed it too.

I put in a buy for WFC at $15, then canceled it at the last minute.

Now it's $18.50.

[disneysteve]

Guess I missed the boat... BAC is up 26% since I posted this.

Keep watching. It has been very volatile. $6 one day, $4 the next. If you really want to get in, put in an order at a price you're willing to pay and wait to see if it hits it.