November 27, 2009
– Comments (7)
TARPedBanks regains the title of Bottom Fool.
A fitting postscript to Banksgiving
Congratulations. Now you have no where to go but up.
Will check on Monday to see if you are still the "Champion", or if someone took it away from you.
Hope you had a nice Thanksgiving.
That's actually so awesome...
I forget if I ever actually conceded your point, Russ - which is that TARPed banks won't necessarily have an advantage over other market participants - but if I haven't, let me graciously admit utter and total defeat here. :)
You may have conceded the point too quickly. As bad as TARPed banks would have been as a collective investment over the past year, they were in line with the KBE. The average pick underperformed the S&P500 by about 40 points. Running a chart of KBE vs. the S&P over the same time period shows about a 37-38 point under performance.
KBE is heavily weighted toward bigger banks that were also TARP participants, so it's not surprising the results are similar. Hindsight being 20-20, I should have used the Watchlist or something to create a non-TARP index that was easy to calculate. In order to do a good comparison, I'd have to collect price data for non-TARP banks and either get TMF to provide a historical data dump for this profile or manually back out/account for the picks that got added later in the process. That time and effort would be too much like work.
One stat where the TARPed banks have performed notably better than unTARPed is FDIC failures. Last I checked, the failure rate among all banks was about 1.5%. Of the 600+ banks that took TARP, only 3 have failed and one of those, CIT, isn't really a bank. I'm sure there are a number of banks that would have failed without TARP.
After following this for a year now, it's my opinion that TARP participation wasn't much of a factor in bank stock performance. I can find several examples of really strong performance and several really awful performers in the mix of picks.
I think it is safe to conclude that as a group, you would have had to look really hard to find a worse place to put your money than bank stocks, TARP or no TARP, over the last year.
Anyway, I'm glad you and others find the profile interesting. If we ever meet, I'll get the first round.
TMF updated the rankings since the screen capture, it now shows me at 69010 out of 69013. Not only lost Bottom Fool, but I'm not 007 anymore. Glad I got the screen capture when I did.
Holy Bad Loans!!
The best thing (or worse thing) has got to be that big fat goose egg next to Player Rating. I didn't think it could go to zero.