iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,429 Blog Posts

Believe the Lie

Stop obsessing over uncovering some Earth shattering news that everyone else is not keen of and get to work. Ignore the notion that you will call the next great bubble and make a fortune buying puts, CDS  and shorting equities. You need to stop betting against the status quo, for they have tanks and missiles and you are armed with pea shooters.

Having said that, pay attention to what is happening, ever so quietly. Banks are going up. SHHHHHH, don’t tell anyone.

Just yesterday, ChessnWine made an epic call inside 12631, recommending the top rated stock in The PPT: NCT. The net result was dozens of 12631 subs making more than 13%. Albeit, NCT is not a bank; but they are financial related.

I am long large amounts of BPFH and find myself up 10% over three days. Annualize that pal; then get back to me.

Mergers are happening. Both LEGC and WTNY got bought out yesterday for 40-50% premiums. MI was acquired last week. It has begun.

I will be all over this trade, for the next 2-3 months. I flagged this sector two weeks ago and it is en fuego right now. Look to names with solid price to book ratios. Typically, anything under 1 is dirt cheap. However, when analyzing banks, it’s important to know what their tier 1 capital ratios are, as well as normalized earnings potential. And, you need to look at the peer group. Southwest banks and valued different from Midwest banks, all due to socioeconomic backgrounds, locale etc.

Your average mutual fund manager WILL NOT call into question the accounting practices of his bank holdings. I repeat, mutual fund managers will not scrutinize the reported numbers. Instead, they will plug the numbers into his model and buy accordingly. For the most part, money managers are big dumb guys with idiot amounts of cash to invest.  These stocks will rip higher, in the first half of 2011; because people are under-invested in the sector. Let’s face it, banks sucked dick in 2010.

Get with the program, else get left behind shining my balls.

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28 comments

  1. TMoe

    Fuck the Banks!!

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  2. hubbs

    First! And I did make money on Chess’ $NCT call!

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  3. rookie

    the “smart” money is dumping block shares and selling the big banks on strength. i look at this nightly and BAC, JPM, GE have been at the top for the past couple of weeks. don’t get caught holding the bag on these – the wikileaks docs are coming out first week of Jan … could be something else.

    http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow.html?mod=mdc_leader

    i am still long and strong oil. 93.50 here we come and then it will be time to short the hell out of crude through Jan.

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  4. Bob the Builder

    I flagged these banks a few months ago when I was looking at regionals.. Anyone have an opinion on any of these tickers? FMBI FULT ROMA CHFC THFF WFSL …….

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    • drummerboy

      try fitb,been in and out of that since 2.28.there on the move for 2 weeks now.got long northern trust over a month ago @ 50.it hit my target of 55 twice,was gonna dump yesterday,glad i didnt.

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  5. Alvari40

    In considering underperformers tonight, I am looking at it from a somewhat different angle. What sectors have not yet broken up past the May 6th Flash Crash highs? Also, for those sectors that have mounted the May 6th highs, how did they act when they first got there? Of the sectors that I follow, I only have 5 that have yet to break through: (1) RKH, (2) XLF, (3) XHB, (4) UNG, and (5) PPA. We all know what financials and banks have been doing of late and they sit just below the May 6th highs. One that I had not previously considered for an “underperforming” play is PPA, which is setting up with a nice ascending wedge just below the highs.

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  6. Spooky

    Thanks for confirming my hunch on banks. I’ve been buying FIG, BK, C, and looking at GS, BAC, KEY, RF and others… Don’t know the space though. HCBK has already taken off, as have HBAN and others.

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  7. TeahouseOnTheTracks
    TeahouseOnTheTracks

    M&A continues tonight as ROVI and SNIC hook up …. Incidently, takeover premium on SNIC is nearly 40%, Odd no?

    http://finance.yahoo.com/news/Rovi-Corporation-Enters-pz-646608856.html?x=0&.v=1

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  8. Cascadian

    When the market is going down the common wisdom says, “don’t catch a falling knife.” Now we are going up in a similar inverse fashion. Not buying into a rally is in some ways the flip side of not catching a falling knife in a nose dive. I think you just have to be looking for the turn and be ready to get out, knowing you will not catch the absolute top.

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    • Po Pimp

      I beg to disagree on your assessment. When “catching a falling knife”, you are going against the prevailing trend. If you buy into a rally you are following a trend. Big difference, no?

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      • Cascadian

        I said NOT buying into a rally is roughly equivalent to catching a falling knife. So it is going against the prevailing trend when the market’s in an uptrend and you are on the sidelines or short. Or anyways that’s what I meant to say. Either way, the trend is your friend.

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      • Fly

        Chequemate

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  9. The_Real_Hmmm

    Don’t forget to include decreasing NPLs and NCOs in takeout metrics. Investors are finding value in risky assets and there is greater visibility in that risk. Effectively, it is thawing the lake from the banks.

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  10. Cascadian

    Buy the dow dogs– AA, HPQ, BAC, CSCO, JNJ, MSFT …. for 2011

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  11. theedge111

    The casino has now taken it to another level. Time to update the PPT with a Twitter reader. Investing is likely gone forever on Wall St.

    http://www.nytimes.com/2010/12/23/business/23trading.html?_r=1&hp

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    • drummerboy

      more like they listen to all the radio,(sites) stations,see what everyones playing,throw that into the mix an waa-la,more mix,. a bot on the other side of your trade personally,because you blabbed it on the internets by telling the world of your time stamp,via here,and any other fin site in the world……. so when does radio shack start to sell little algo boxes for the little guy.ops,did i do thaaat

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  12. Aristotle

    Has anyone seen the can of brass polish?

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  13. insidetrader

    fly -have been with you since the beginning you have my acct. from six to seven figures-love your writing-hve a great christmas lets go from 1 to 2 next year.

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