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Make Money in Bank Stocks
This week the editors asked for comments on the financial industry, the banking sector in particular and I have to admit I'm very afraid of individual banking stocks. I don't think there is any analyst in the industry who can honestly analyze the numbers. I have an accounting and a law degree and have passed the GA CPA, Certified Internal Auditor and Georgia Bar Exams and I wouldn't even to attempt to read and tear apart any bank's 10Q. I can't trust the numbers. It's not that the bank are dishonest, they just honestly don't know what their assets are worth. Many of the loans were either "No Doc" loans and not underwritten at all or were badly underwritten with highly suspect and incomplete information.
These loans have been sold and resold, packaged and repackaged to the point that no one knows what the pay-off of the loans will ultimately be or if any of the banks have adequately reserved for their bad debts.
But there is a way for the common investor to make a good bit of money in this market. Don't buy individual banks, buy the whole sector.
Need more specifics? See what Jim Van Meerten has to say in his latest post.
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