I love this bank volatility!
As an investor looking for mispriced securities, I love this bank volatility! So do most of my Foolish colleagues who follow the banking sector.
Banks were up an average of 6.5% today (using the KBW index)! On quite minor news.
Nothing changed today except that bearish banking analyst Meredith Whitney (she of the famous Citigroup call) upgraded Goldman Sachs to a buy. Lost in the headlines is that she's bullish on Goldman partially becaues she believes it'll benefit from more debt issuances from troubled governments and corporations...not exactly a green shoot prediction. Plus, she still has a sell order on Wells Fargo, Citigroup, and Capital One.
So why am I so happy? Not because banks are up today, but because their stock prices are volatile. When you're looking to buy, volatility is your friend...with prices all over the place from day to day and month to month, mispriced stocks abound. Your move, Mr. Market!
-Anand (owns shares of Citigroup)