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John Thomas graduated with a bachelor’s degree in biochemistry with honors and a minor in mathematics from the University of California at Los Angeles (U.C.L.A.) in 1974. He moved to Tokyo, Japan where he was employed by a medium-sized Japanese securities house. Thomas became fluent in... More
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  • Bank Stocks to Underperform in H2 0 comments
    Aug 6, 2009 11:22 AM | about stocks: GS, MS, KBE
    Those whose bacon was saved by the Q2 doubling and tripling of bank share stocks, better not count on a repeat in Q3 and Q4. For a start, there isn’t going to be any more government issued adrenaline to ramp prices with TARP’s, TALF’s, ZIRP’s, stress tests, and forced takeovers. The next move in interest rates is going to be a flattening one, cutting into their now hugely profitable margins. Q2 earnings showed that the best performing banks made the largest portion from trading, likely an unrepeatable performance. There is room for only one Goldman Sachs (GS) in the world, maybe two, if you count Morgan Stanley (MS). Wasn’t this the well that poisoned so many of them in the first place? Dare I say that many banks are now overvalued? The quick fingered might even entertain a sector short here in the bank ETF (KBE). For an excellent separation of the wheat from the chaff, take a look at Martin Hutchinson’s work by clicking here .
    Stocks: GS, MS, KBE
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