“Bank stocks have been on a tear for the past year, with the KBW Bank Index soaring 27 percent. And renowned banking analyst Dick Bove thinks the party will keep going — for another 14 years.
“What I’m suggesting is for the next 14 years — you’ll have some setbacks, some recessions — [but] bank earnings will do what they did from 1992 to 2006,” Bove told reporters, according to CNBC.
“They’re going to go straight up.”
Economic growth will fuel the rally, says Bove, who has moved to Rafferty Capital Markets from Rochdale Securities. He expects gross domestic product to expand 3 percent this year, despite its 0.1 percent decline in the fourth quarter.
Strength in the real estate, healthcare, automobile and electronics sectors will “drive the economy,” Bove says.
He thinks the Fed’s quantitative easing will help support the economy too. That’s because through its purchases of mortgage-backed securities, the Fed “is taking the money and investing it directly into an industry — housing.” …”
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