19 July 2008
Financials Hit Bottom?
Barry Ritholtz questions the bottom calls in financials.
Floyd Norris in the NYT says:
The past year has not been a good time for most stocks, of course. But even on a relative basis, the financials have had their worst 52-week period ever. They had fallen by 31 percentage points more than the overall S.& P. 500 on Tuesday, a figure that was marginally worse than the two previous times that the relative underperformance reached 31 percent.
The fact that relative underperformance of 31 percentage points over 52 weeks has twice signaled a great opportunity in financial stocks does not prove that it will happen again, of course. But it does show that pessimism about the financial system had reached extraordinary levels. That could provide attractive prices if the financial system is destined to muddle through the current credit crisis.
These posts and stories confirm my belief that financials are a good bet in the short term. Ritholtz' and Norris' hedging skepticism keeps my finger on the trigger, ready to close out my UYG holdings if necessary. On that note, how does Assy McGee (pictured above) pull the trigger of his revolver?
Posted by WershovenistPig at 11:37 AM