Dave P

Don't Believe the Lies: Ride the Bank Stocks Bull

I think there will be more write offs and more losses in the banking industry, but the market is way ahead of the auditors on that. The market has already discounted those future losses, and yes, I do think the bottom is largely in. It may be a few months though before we start to see any significant upward movement.

The proof of that is to look at how far the banks have already fallen. Wachovia, for example, was a company with a $120 billion capitalization a year ago. Now it's at $32 billion. They haven't lost $88 billion since then. Not even close. Less than $10 billion. The reason the capitalization has fallen by $88 billion is that the market is assuming that they will ultimately lose that much. If they can beat that number, then it is gravy for investors at these prices.