02-09-2009, 03:40 PM
The problem with all the financials (or all companies with large financial arms, like GE) is that investors are afraid that they will either go out of business, or be nationalized, or that the common shares will be wiped out through some other government action, such as major dilution.
I don't think there is any doubt that GE, Bank of America, Wells Fargo, and so on are excellent companies that will be worth much, much more in a few years...if they survive. But it is entirely possible that they won't, which makes any long term investment pretty much a gamble.
So really, why risk it? There are plenty of excellent companies out there that are beaten down right now that are far safer to invest in for the long haul. Apple and Microsoft aren't going anywhere, unless we truly do have armageddon. Or go with McDonalds, or WallMart. For now, bank stocks are just too risky.
Having said that, they are great for a trade! GE up 13% today, and BAC has doubled since it's low on Thursday.
I don't think there is any doubt that GE, Bank of America, Wells Fargo, and so on are excellent companies that will be worth much, much more in a few years...if they survive. But it is entirely possible that they won't, which makes any long term investment pretty much a gamble.
So really, why risk it? There are plenty of excellent companies out there that are beaten down right now that are far safer to invest in for the long haul. Apple and Microsoft aren't going anywhere, unless we truly do have armageddon. Or go with McDonalds, or WallMart. For now, bank stocks are just too risky.
Having said that, they are great for a trade! GE up 13% today, and BAC has doubled since it's low on Thursday.
Ex SWG, L2, CoH, Wow, and War
Currently PvPing in the stock market
Currently PvPing in the stock market