User 236661

Bill Miller on This Tough Market

Financials are not cheap, and just because they are down in some case over 50% from their peaks, the market is right in bashing these stocks. Their fundamentals are still very poor and deteriorating. We are probably just half way (at best) through the credit write-downs, and once the books are cleansed they will still have the arduous task of rebuilding their businesses within an economy crippled from a severe credit contraction. Think about it these banks are levered to the tune of 10:1 to 15:1, and are probably under capitalised to the tune of several hundred billion. Now extrapolate that to the credit that is / will be sucked out of the economy - and boy it's going to take a while to reflate those valuations - and your hopes.

The cheap, tend to get much cheaper in the final run. You just wait and see.