Q: Hi
I'm down 40% on the U.S. bank ETF, but with only a 1.5% weighting. I'm a true believer in that the most important metric in buying stocks is what you pay when you take a position. Being down 40% is presenting a huge opportunity if the Good out weighs the bad in these regional banks. Are there enough solid banks here to justify a 3% weighting in your opinion.
Thanks
I'm down 40% on the U.S. bank ETF, but with only a 1.5% weighting. I'm a true believer in that the most important metric in buying stocks is what you pay when you take a position. Being down 40% is presenting a huge opportunity if the Good out weighs the bad in these regional banks. Are there enough solid banks here to justify a 3% weighting in your opinion.
Thanks
5i Research Answer:
The answer is 'probably' but the problem is that the sector is not yet trading on fundamentals. Fear could return and more banks could still fail. Concern on the economy may temper recovery in the short term, even with no more crisis. We dot like averaging down, and the sector outlook still has to be called uncertain. We will be more comfortable once the FED pauses and we see some more stabilization of deposits.