It’s hard not to laugh a little when we say ridiculous things like,
Regional Bank Stocks continue to be the market leaders during this Global Pandemic….”
Especially in front of a group of investors who think they’re smart.
This is like the “least smart” comment you can make, according to some circles…
The sentiment here is pretty unbelievable.
Whenever I tweet something out about bank stocks or send an email blast about them, the twitterati gets all up in arms about their fundamentals.
Like that’s anything that matters lol
Meanwhile, how about Deutsche Bank pressing up against new 52-week highs?
If this is actually what’s going on here, I’m not sure what the bears have left. They better be on their hands and knees praying this is not that, because if it is, oof!
A ripper in European Banks would make sense in an environment where Europe as a group is breaking out of a 6-year consolidation:
And if you look at the broader S&P600 Index, we’re talking about a 20-year base.
If Europe (priced in local currency) $HEDJ is above those 2015 highs, how can we NOT own European stocks, and more specifically not have long exposure to European Banks?
Some of the “I’m too smart for my own good” crowd would say that it’s just a coincidence that US Banks are also breaking out at the same time. They’ll tell you that it’s all about to fall apart….or it’s “unsustainable”, whatever that means.
And let’s just say you have no interest in owning these companies. Maybe you have some philosophical aversion to it or something.
But just think about the implications of European Equities breaking out of a 20-yr base, being driven by Bank stocks….
How are stocks around the world most likely doing in that environment?
What does this sort of behavior say about risk appetite out there?
They tell me the “Fundamentals Don’t Add Up”
I tell them good.
By the time they figure it out, we’ll be selling these back to them.
When they start talking about how great the fundamentals are for European Banks, that’s when we’ll be feeding the ducks.
Price leads. The gossip follows.