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How To Buy a Bank (and Other Beaten-Down Stocks)

Apr. 28, 2008 9:40 AM ETC, BMO, HCBK, IBN, NWG, XLF, COOP11 Comments
Philip Davis profile picture
Philip Davis
66.78K Followers

People have asked about bank investing so let’s talk about that.

One of the reasons I tend to get very good results is because I listen to the Media but not the way many of you do. I listen to the media and when I see them catching onto a trend, like Cramer/Macke pushing solar every day (on NBC/GE, the "green" network) I get suspicious. When I see the banks get savaged by bad news, then sold off to five year lows and THEN attacked by the media, especially when some so-so analyst like Meredith Whitney is suddenly raised to the rank of financial messiah - THAT’S when I make my contrary bets.

I don’t, of course, just arbitrarily go negative - a lot of people now think GM sucks, and they do! But when Kirk Kerkorian said he had a plan to bail them out and the stock went to $37 in mid ‘05, reversing a clear downtrend that had cut half their value since 2004, I was one of the only people to cry Shenanigans (and got death threats and called a communist for my troubles). We all did well on Apple (AAPL) when that got beat up and Google (GOOG) as well, but that’s because they ARE good companies and the only reason they sold off is because the bears and their hyenas whip the media into a frenzy and stampede the mob out of good stocks for no reason. Learning to identify this behavior is the key to that almost mythical concept of buying low and selling high.

After I read through the hate mail I got after my first quick repudiation of Whitney’s call that CitiGroup (C) was going to fall another 50% from their March lows around $20 (a stance, admittedly, I took without feeling I had to

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Philip Davis profile picture
66.78K Followers
Philip R. Davis is a highly respected options trader, entrepreneur, and founder of philstockworld.com, one of the most influential stock and options trading sites on the web. With over 20 years of experience in the financial industry, Mr. Davis has earned a reputation as a trusted authority on options trading, equities, and macroeconomic trends. As the creator of Phil's Stock World, Mr. Davis has built a vibrant community of traders and investors of all levels, providing them with unparalleled insights, analysis, and trading ideas. Whether you're a beginner or a seasoned pro, Phil's Stock World offers valuable resources that can help you navigate the complexities of the financial markets and achieve your investment goals. With a unique approach to teaching the art of options trading, Mr. Davis and his team of expert contributors including Optrader, Sabrient, Income Trader, Trend Trader, and Warren the Trader AI provide members with live chat sessions during trading hours, real-time trade alerts, and in-depth technical and fundamental analysis of hundreds of stocks. In addition to his role as an options trader and financial guru, Mr. Davis is a serial entrepreneur and founder of several successful companies, including Accu-Title, a real estate title insurance software solution, and Personality Plus, a precursor to eHarmony.com. He is also the President of Delphi Consulting Corp., an M&A consulting firm that helps companies of all sizes obtain funding and close deals. With his unique blend of wit, humor, and financial acumen, Mr. Davis is a sought-after speaker on options trading and financial markets. His writing style is both entertaining and informative, providing readers with specific and actionable trade ideas, as well as deep insights into the macroeconomic forces that drive market trends. In short, if you're looking for a trusted and experienced options trader and financial expert, Philip R. Davis is the real deal. Join the growing community of traders and investors at Phil's Stock World, and start profiting from his insights and analysis today.

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Related Stocks

SymbolLast Price% Chg
C--
Citigroup Inc.
BMO--
Bank of Montreal
HCBK--
Hudson City Bancorp, Inc.
IBN--
ICICI Bank Limited
NWG--
NatWest Group plc

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