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Strategies & Market Trends : 50% Gains Investing
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To: tom pope who wrote (79003)6/3/2009 9:00:29 PM
From: Keith FeralRead Replies (1) of 118717
 
Yup, when these things get outside of the channel, it seems to set up more problems. I generally don't get this aggressive on a sell signal, but there are so many good values out there. I hate waiting around for a couple weeks for the Freeport's or the Transoceans of the world to consolidate their gains. Made that mistake with some of my bank positions a few weeks ago.

I bought some JPM today to replace the WFC I sold on Monday. I'll take JPM under $34 vs WFC at $25 and change. I'm not as impressed with C and WFC as BAC and JPM in terms of earnings recovery. The earnings recovery is pretty much priced into C and WFC at the moment. JPM has the biggest normalized earnings recovery from here. BAC less so after the big secondary, but I don't think it'll matter once the market catches up to their higher capital levels - 4 to 5% TCE and 12 to 13% Tier 1 ratio? I'm just guessing about the new ratios, but the cash levels will be back over $200 billion from the capital raise.

JPM is just staggering though. Cash levels at $700 billion with capital ratios that are the best in the industry. It's almost comical that they had to raise $5 billion in common at $35.25, so I'm pretty happy to catch the stock back under the price I blew out a few weeks ago. Quarterly earnings should benefit from lower reserve builds, just like BAC.
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