Banks
Not that long ago, some brokers were recommending that bank shares are overpriced... and because of this and that, investors should offload some. My father said invest in anything with long term reliable dividend paid out of profit especially when people are dumping those shares as the dividend is far better than interest paid on bank deposits.
My question is not who is right or who is wrong. My wish is for those brokers to account for their miserable 'expert' opinion. Well, they may still be right but it will have to be due to other factors.
I didn't dump any financial stock... and in fact, I picked up more ASX shares when it was dumped.
posted by Club Mulgoa @ 12:04 PM
8 Comments:
Today, another bunch of brokers put out a statement that the banks have risen 20% and therefore investors should think about selling.
They could be right. However, if the banks are still making money, where else can you invest where the profit is still good?
Today, from Wall Street, a different set of opinions about the finance stocks... We won't know who is right but the brokers definitely make money when there is a transaction and the suckers take the risk.
In reality, outwardly the economy is moving along and nothing has collapsed so I am not selling (nor buying). When something catastrophic has happened and the market plunges, not even the most brilliant and the most research-orientated broker can predict a Black Swan event... but some 'experts' will be quick to point out that they were right. These brokers may get it right once by pure luck; it is rare to find the same broker predicting major events accurately and timely, more than once based on their 'cleverness'.
More brokers writing bad news about banks... I can't help but think this is a lemming approach.
Banks are still making money! So why sell them off?
Today, in Wall Street, banks are making or expecting to make money. That refers to American banks. So, today, ASX banks have lifted.
But if those analysts are right, then why should the ASX banks go up? It is the lemmings, stupid!
Finally, one lone voice screaming out that it is stupid to sell off the banks... Well, I am not diplomatic. The head of Nikko Asset Management says it has good franked dividends! Do I need to do a finance/accounting degree to know that?
But lots of idiots were selling off bank shares recently. Yet, a year from today, I wonder who would be right. Luckily I don't invest for the short term.
In today's The Australian, "The bank’s won’t admit it — and no broker report will spell it out — but the greatest strength of the big four banks is that they are a cartel."
The article by James Kirby tells small investors not to be sucked into adverse advice. I don't know who these 'experts' are but when these idiots moan, stupid investors dump... and the big institutions pick up those shares.
There were inaccurate predictions of huge capital raising, end of good dividend stream and debt blowouts in QLD and WA. Also I have read that the low interest rate means lower margin of profit for the banks. So far, all these are rubbish! But suckers will remain suckers... and I love suckers because I did manage to pick up some bank shares on the cheap!
Those broker recommendations to sell down banks share must be for the big institutions to buy up small investors' shares! I can't believe anyone would want to heed those words when obviously there has been no problem for the banks and it has been business as usual.
Today, when CBA announced its profit as expected, the banks went for a nice ride up. The dividend is still good. Of course, when the housing market takes a tumble and property investors cannot pay, there will be trouble. However, there is no sign of that at the moment.
When the ASX tumbles, I rarely rush in on Day One. If it falls for a few more days, then I top up... Today is one of the biggest falls but I will be patient.
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