We bought some USB shares for my wife's RRSP.
Mr. Dorsey discusses USB and other well positioned banks for long term appreciation during the eventual recovery phase of the credit/mortgage mess and a juicy 5+ percent dividend to reward you during the wait:
Subscribe to:
Post Comments (Atom)
Posts
2 comments:
Hey Lorne, just reading through your blog here. Good stuff, I am going to subscribe to it. I thought from the title here you meant UBS (as in UBS AG - Swiss bank), as you mention it shortly after. Not USB, which at first I though you were goign to talk about USB sticks! lol.
Good video. The way i see it, is that banks are more or less "reflections" of the economies in the countries that they operate, so to many investors, US banks will not look all that handsome to many in this environment. I guess that doesnt effect you as much with your contrarian approach eh?
I think that most investors who need to see rock bottom prices before investing wont be interested now, but are probably thinking "soon". The Investors with long-term goals in mind wont be worrying to much as you mention. Either way you look at it lot sof people will agree that bank stocks are "typically" one of the best equity investments you can have in your portfolio. I am a derivative paranoid person though with the top American banks they mention there (BOA, Watchovia).
Check the derivative holding tables on page 22 onwards: http://www.occ.treas.gov/ftp/release/2007-65a.pdf . JP Morgan is the largest gambler in economic history! 70 Trillion in derivative holdings. Then see what their assets are? Just over 1 Trill. Wouldnt take much of a loss in the 'ol derivative portfolio to get wiped out. You can see that Wachovia and BOA are next in line there. That is my biggest fear (paranoia I suppose) of the big "fab 5" US banks, not so much the economic crunch going on right now.
I wonder if Buffet has a steak in any of the big US banks? I would bet NOT. “The derivatives business is like hell — easy to enter and almost impossible to exit,” - a good Buffett quote.
Hi Jake:
Thanks for your comments and insight.
Buffett has a major stake in USB (he owns 4% of it) and Wells Fargo
Post a Comment