Categories
Accounting
Banking
Credit
Currency trading
Day trading
Debt consolidation
Investing
Loans
Personal finance
Wealth building
Popular Articles
Natural Remedies

Where Are The Mortgage Rates Heading In 2009?
Of late, there's been a lot of talk with reference to mortgage interest rates. Barely a month ago everybody was discussing on the subject of how awfully low they were. Indeed, they were at historical lows and it helped in, to stimulate a huge recovery in the mortgage refinance market. On the other hand, July is witnessing resurgence in mortgage rates. Can it actually make a difference if interest rates rise by a few percent? To a large extent will it matter? Can it have an effect on the recovery of the housing market? These are a few basic questions that need to be answered.
generic viagra online
Why Are Taxi Or Car Hire Insurance Policies So Important?
When you are faced with the need to venture into the "outside" world, because your previous working place closed or perhaps your services were no longer needed, you might be faced with the possibility of choosing to become one of the many cab drivers available in the UK. Whether you decide to hire your services out to someone, or you decide to explore this particular activity on your own with the idea of getting your own fleet in the nearby future, probably the most important thing that you need to know, understand, and obtain is proper insurance.
News of the day
Taking Advantage of Credit Card Rewards
Card issuers do not have a hard time marketing their credit card rewards program because people actually get thrilled with the thought of being rewarded for spending. The keyword, however, is planning. Be it a large purchase or a simple transaction charged to your credit card, it is necessary to have a plan on how to get more out of your reward credit cards.
Investing

Financial Stocks: Danger or Opportunity?

I am trying out a rather risky investment thesis by investing in financial stocks. I have begun to start building a position in the major financial stocks. I believe that the last few weeks have presented some good buying opportunities for financials. The three financial stocks that I have invested in are Wells Fargo, JP Morgan and Bank of America.  Wells Fargo is probably the best capitalized of the major banks. The recent addition of Wachovia has given Wells Fargo about 800 billion in deposits. Wells Fargo size is a major competitive advantage. They have a Tier 1 capital ratio and a solid balance sheet. Wells is currently the 2nd largest bank in the US in terms of market cap. Wells also has excellent management. Wells Fargo management have already accounted for a 74 billion dollar writedown of Wachovia’s total loan portfolio. This should reduce Wells exposure going forward. Wells stock has held up pretty well over the last few months compared to its peers. Wells has historically had a 22% profit margin and solid ROE of 18% over the last five years. It doesn’t hurt that Warren Buffett loves Wells Fargo and has owned it for years. JP Morgan Chase should emerge from the financial crisis as the dominant player in the banking industry. JP Morgan got a steal with the acquisitions of Washington Mutual and Bear Stearns for well below their true value.  JP Morgan has the largest deposit base of any bank in the country which gives it a strong capital base. JPM has solid management that has delivered an 18% profit margin over the past 5 years. The return on equity averaged 10.5%.  I think this will increase in the future as Jamie Dimon and company realize the synergies of the Washington Mutual acquisition. JP Morgan currently sells well below its book value and pays a healthy dividend. Bank of America is definitely the riskiest of the 3 banks. From its purchase of Countrywide just before the subprime crisis to its pending merger with Merrill Lynch, Bank of America has made some questionable moves. The Countrywide and Merrill Lynch deals that appeared cheap before now look severely overvalued. Bank of America’s shares have plummeted and this may provide an opportunity. The stock was selling for $10 recently which is well below its book value. Bank of America has historically averaged a 16% ROE and a 27% profit margin. I think that the Bank of America name is a major competitive advantage. Bank of America has a huge deposit base and the BOA name has significant goodwill. I think the Merrill Lynch acquisition will be a valuable brand for Bank of America long term. But I am not so sure about the Countrywide acquisition. Countrywide has a damaged brand name due to its heavy association with the subprime crisis. However, I do think with their ability to access capital and their strong brand name Bank of America will remain a viable entity. These 3 stocks will probably continue to face difficult circumstances in 2009. I do think that over the long term these banks will benefit from the financial crisis and emerge with even greater market share and a stronger financial structure.


Add your comment:
Name:
Site address: http://
Your message:
Enter today\\\\'s date, 2 digits
(spam protection):

© Copyright 2009