Re SCHW - I get that SCHW will benefit from higher interest rates, but with 20x earnings, a lot of that is already build in. There are a lot of other financials, that would als benefit from higher interest rates, but have a much lower valuations. Examples are pretty much any insurance company or bank. Those trade at <10x earnings and would all benefit from higher interest rates.
So, if you look at SCHW as a way to bet in higher interest rates, why do you think that this expectation is not already build in, compared to other stocks that have the same sensitivity? I agree that SCHW is a higher quality business compared to an insurance company, somitndeserves anhigher multiple. However, agree that higher interest rates could lead to a market downturn, which typically isn't good for asset manager like SCHW either.
DO you think that SCHW has any competitive advantages compared to TDA or IBKR. I think the latter has a mat, due to being the low cost leader and having the most sophisticated trading platform (which is not the easiest to use, I admit). |
