Marc Gerstein

Are Bank Stocks Buyable?

I get a sense the market is more or less tuned into credit cards and the employment issue. But the care leases and pay option ARMs still seem to have the potential to surprise. And outside the strict confines of banking per se, people (other than sell side analysts) had been worrying about Lehman and that shoe fell hard. Bear is gone. Now . . . are there any more to surface? So it seems unsurprising that that the banks stocks that bounced most were the most conservative, the type least likely to carry a sustained rally.

BTW... the reason I didn't use valuation or loan loss criteria is because right now, I'm not comfortable with the #s. Good loan loss #s may mean good lending habits, or it may mean that they haven't yet ... but will soon .. take the big charges. That would also play havoc with the valuation, metrics. Down the road, once life normalizes (however long that may take), valuation and loan criteria would definitely be important.