Regional Banks have Bottomed... Big Banks have not... My Response..
"I could easily see your theory up here play out, except how could the banks have bottomed when real estate hasn't, and retail real estate hasn't fully crashed, because the retail market hasn't crashed completely? "
I said regional banks have bottomed. And they have due to the widespread consolidation which I pointed out in my blog before I got bullish on TCB.
I caught the signs of a strong regional bank acquiring a weaker one and how this consolidation would create a bottom. I see that their are enough regional banks with zero tarp, low debt to capital ratios... I mean... Countless positives.
Are Malls going to continue to crash? Sure.. some will... But we have already seen General Growth Properties head straight into Bankruptcy protection. They happen to be in the worst of the worst when it comes to commercial real estate.....That being MICHIGAN / MIDWEST States.
I figure we have seen the signs of a bottom in commercial real estate troubles by the coming onslaught of bankruptices with companys like General Growth Properties.
Now.. I am not in favor of saying the entire banking sector has bottomed...yippe...like Jim Cramer is willing to do. I do not think that makes any lick of sense.
I am just in favor of regionals... and fully believe they have bottomed and growth is ahead for these banks.
I got bullish on Regionals.. and guess what? Jim Cramer's last T.V. Show on Friday.... He gets bullish on Regionals himself. I called the regionals as a buy before the great master Jim Cramer.
TCB and many other regionals either didn't get involved in Subprime mortgaging AT ALL..... or they kept a very tiny percentage of it. TCB carries a commercial real estate portfolio, but they have zero Shopping Malls.. They have more of what you call a Shopping Strip.
This really is about finding specific banks... a pursuit of stock picking in the financial sector is what all investors should be doing rather than blindly following BAC or C into the abyss.
I am not saying that BAC or C are bad investments... Just that I see no reason to put your money in these types of TARPED up banks when there are so many good, growing, strong non-Tarp banks out there that are set to benefit and take market share from the larger banks.
Look at a blance sheet in terms of CAPITAL percentages.
TCB's percentage is 5.5%.
Do you seriously want to wait for the ENTIRE banking sector to bottom???
You can't sit and wait for Sunshine and then jump in when the water is warmed up enough.
Why? Cause you'll jump in at 2x or even 3x the share price. I'll be rolling in the Dough and you'll be trading sideways for months.
You have to Stock Pick.... Especially as a Buy and Hold investor. Stock pick by making sure you are not carrying a Bank of America 3% or less Capital reserve percentage bank.
P.S. Check out the following banks
FNFG <-----------If you trust Jim Cramer... So... HUGE warning