Dale,
I've been saying that for a while. Unfortunately I jumped the gun too soon, and got hurt by bank-merger mania while holding shorts on CCI and CMB.
At this point, I'm cautiously preparing to re-enter. CCI still has lots of "merger hot air" built into it's price, as does their suitor TRV. IMO, either one is a great short. TRV's insurance operations almost certainly have derivative and asset exposure in the far east which has never been reflected in the stock price. The trading and money management business (Salomon Smith Barney) has also got to be sensitive to world markets, especially if the down trend spreads to the US and Europe. CCI, at the very least has significant exposure in their Asian consumer practice -- guess who's the largest issuer of credit cards in Indonesia? -- and probably to other important fee-generating businesses. And I still refuse to believe that CCI learned their lesson after the loan disasters with South America, Mexico, US Commercial real estate, and others.
CMB is a great one. Probably the highest percentage of asset exposure among major US banks. BT and JPM are also good candidates.
Keep in mind, they're all long-term shorts, and could take a while to sort themselves out. I would not short for a quick profit, instead I'd be looking for a substantial one over time.
mg |
