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Thursday was a rough day for economic news. Things are looking bad on the mortgage front as foreclosures increased during the 3rd quarter. This is despite interest rates dropping to 4.19%. Applications for jobless benefits surged to 462,000. Credit default swaps are widening again as fears abound that banks may be on the hook as more residential mortgages go into default. Despite all of the negative data, I am going to use the current weakness to add to my positions in the following stocks.

I added to my position in Wells Fargo (NYSE: WFC). I am still dollar cost averaging into my position in Wells Fargo. Wells was down 5% Thursday and dropped to $24.50 per share. Wells is one of the best capitalized banks in the industry and a favorite of Warren Buffett.

I am looking to add to my position in Bank of America (NYSE: BAC). Shares were down nearly 6% Thursday as the stock has dropped to $12.50. The bank has been one of the most heavily shorted stocks in the S&P. Bank stocks were down big Thursday due to news of rising foreclosures. Banks foreclosed on 288,000 homes this past quarter. There are fears that write-offs in the banking sector are expected to depress bank earnings for years to come.

Financial stocks are incredibly risky right now and most financial experts are advising investors to avoid the sector. As a contrarian investor, I always like to invest in stocks that the market hates. It may take several years for the financial sector to recover but I am patiently betting that things will turn in the future. In the meantime I will continue to buy bank stocks.

Disclosure: I own shares of Bank of America and Wells Fargo.

Source: Financials Down Day? Time to Increase My Stake in BofA, Wells Fargo