akinbostanci
Why Are Banks On Sale?
On March 10 , Silicon Valley Bank (OTC:SIVBQ) failed and was taken over by regulators after the bank ran face-first into $42B in withdrawal requests. Notably, just two weeks earlier on February 24th,
Banks Are On Sale But Risks Remain
Summary
- One month ago, Silicon Valley Bank failed, with a resulting decline across the diversified banking industry.
- Some investors may be tempted to buy the dip, while others are considering doubling down on losing positions.
- However, the industry may remain risky even at bargain prices with unrealized losses on Treasury bonds and mortgage-backed securities.
- Further, Silicon Valley Bank was not entirely an outlier with regard to its exposure to mortgage-backed securities or its ratio of cash to total deposits.
- Investors are once again cautioned to consider every investment carefully and on its own merits.
I most often base my analysis on company fundamentals, industry specific data, and broader economic trends. I read company quarterly presentations, but very rarely cut and paste presentation content and include it with my analysis. Those presentations are put together specifically to present company data and results in the most favorable way limited only by SEC regulations. I have not seen a single company presentation advising investors to sell.I sometimes work with fellow Seeking Alpha author Badsha Chowdhury.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.