Crossing Over With Allan Edwards (NYSE: BAC) (NYSE: WFC) (NYSE: PNC)

From November 24th, Since then the KBW Bank Index is up 19%.


http://themarketsareclosed.blogspot.com/2010/11/buy-us-financials-i-am.html


"U.S. FINANCIALS face large headline risk there is the foreclosure scandal, worries of government intervention and sour loans.

But ... I’ve been buying American Financial stocks. I now have 80% of my wealth in U.S financial institutions. At the beginning of the year I did not own any banking institutions. This is based on my investment philosophy of being cynical when others are optimistic and being optimistic when others are cynical. And keeping an open mind when others have closed theirs. This is when the strategic opportunities are best seen. People are selling U.S. Financials at impossible levels on fear. Of course these banks have had rough times but the tide is turning and all the major U.S. financial institutions are beginning to show an exceptional amount of profit.

U.S. Financials are the most attractive in the world. Fannie Mae and Freddie Mac have done their job in keeping liquidity in the financial market and the government should also be given praise for this. Franklin Roosevelt created these institutions during the Great Depression to add liquidity to the financial markets. Because of this the large U.S. financial institutions are among the safest in the world. The banks have more equity then they have ever had and the major banks have more equity as a percentage of capital than that of any other major country in the world; full liquidity will eventually return to the markets. Despite this U.S. Banks are getting large discounts to European, and Asian Banks, especially Canadian banks and the market in general.

The past congressional election dictated that there is unlikely to be oppressive financial regulation. Nor do they deserve it, they have all paid back TARP and the government has made a large amount of profit from the banks. I have never seen such a distortion in the risk reward ratio. I see U.S. Banks everyday which I deem to have no risk that sell as if they have a 50% risk of bankruptcy. Now is the time to buy U.S. Financials."