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Strategies & Market Trends : Waiting for the big Kahuna

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To: GROUND ZERO™ who wrote (87106)	4/9/2009 11:45:13 AM
From: carranza2	Read Replies (1) of 94695

How does your model differentiate between smart and dumb money? Size of the bets? A lot of this allegedly smart money made some awfully stupid bets in the last couple of years. I think this allegedly smart money has taken positions in the financials because it is now apparent that no systemic collapse will take place. They can obviously note the new Administrtion's policies, which are basically more rescue, more bailing, etc. When their existence is guaranteed despite awful fundamentals, buying them at this stage is simply an unexpirable but really cheap option. But this is - I think - a relatively long term play. It doesn't mean that the banks will be exceptionally profitable or that the fundamentals, except for the apparent fact that no systemic collapse is now on the horizon, are unchanged. I don't understand how WFC makes much difference. It was not really one in particular danger, if I recall correctly. I think it was more prudent than the others and is now reaping the benefits of it.

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