jstratt

Wells Fargo and US Bancorp - Hitch a Ride with These Two

I enthusiastically agree with the author. I took a list of the worlds 50 strongest banks and picked USB, BK and JPM off of it. Then on Monday 3/9 bought all of them and then went out on a limb and bought BAC, RF and GE.

Risk cuts both ways and in a market like this it helps to think long. In short I was willing to buy USB at $8.80 and more up thru $14 because I believe they will restore their dividend within 3 years and a 10%+ dividend in the investment will result plus the price appreciation. That overweighed my reluctance to invest in financial stocks in a financial crisis. It is still not to late to invest even thou those initial investments are up 60% or more in a little over a week. My analysis of GE was much the same.

BAC and RF at $3.80 and $2+ were flyers that I thought had the potential to be 10 baggers within 5 years. They also carry more risk. The government has told us and shown us that they will support the banks, and have created a very profitable banking environment. When this financial crisis started in 2007 I decided to get totally out of financial. Now I think is the time to recreate and build a reasonable financial position in your portfolio.