Tuesday, December 15, 2009
Friday, December 11, 2009
Next move for Financial Sector
Hello Traders,Buyers and Investors sorry for not posting quite few days.... but back again....
I have been closely watching the Financial Sector for past few days and what is the update and how are they planning ahead for future. Here is the play for common man and the companies. I have received a letter from CITI (NYSE:C) which states that the APR would increase.Good for the company and Bad news for us. Every mind in this time is Pre occupied with thoughts and fear of investment or skepticism is over ruling the very essence of unpredicted nature of future investments which is fueled by High degree of Volatility of the market.Agreed. But Fed has set few clear cut rules keeping in mind about the present nature of the market. Desperate times needs desperate measures.Fed has reduced the interst rates to http://www.federalreserve.gov/fomc/fundsrate.htm. As of Dec 16th 2008, the interest rates have been at 0-0.25. All the financial sectors have lost dead weight and have trimmed down to maximum that they are just for operations of business to carry on. So I would rather say unless and until the banks are filing for Chapter 11 I do not forsee any more further reduction in employment. But lets not allow a wave of optimism to flow in our minds. One should bare in mind that there are lot of option calls which makes us feel that the market is budding. Thats not the true nature of the market.So lets not loose track. Fed has also made clear statements that interst rates to the customers should not increase just because of 1 missed payments and the customers are to informed well in adavnce before increasing the APR. Now what would the effect of this? Revolving credit has already been blocked. If a person misses a payment or cannot pay, banks would loose the credit they have borrowed from the customers. In order to compensate this they have increased the credit card APR’s. How is that we are going to get benifited would be the next obious question? The financial sector investments are no more lucretive the way they used to pay dividends. Upon saying this, they would rather be more stable in the near future. The banks are instructed to show their progress in repaying TARP(Troubled assert relief fund).Few Banks are already on their way of paying the money but CITI is still hanging in the air to develop a program to pay back but it has reportedly planning to raise $20 billion in new equity to help it pay back the $45 billion it received in funding. Treasury has reportedly told Citi it could repay its TARP funds if it raised that amount.
Get the shares of CITI now. Other banks are Hutington Bancshare(HBAN) ,Bank of America (NYSE:BAC),US Bancorp(NYSE:USB),Wells Fargo(NYSE:WFC) .
Analysis:
1.Citi cannot be sunk easily.The roots are so deep in 30 different nations, it would take Hercules to sink it but remember it will be slow but steady. So this stock is GO GO…
2.HBAN is a local bank is a regional bank but backed up by the state Govt of Kentucky for 1 billion and its has more of low risk business and Yield has not dropped to this low. Get this stock and thank me and you later.
3.The only reason as why I would go for Wells fargo and US Bancorp is Waren Buffet. If he can invest and can steer the economy why not me. If lost he will loose atleast a billion folds than us and I don’t think that he is stupid to make such a move.I do not remember his exact name but he is Agarwal who is the man behind curtains for the futuristic investments. Since I am cocentrating only on financial sector for this post, I would also like to throw like on Hartfor Financials (NYSE:HIG). All I say is MAKE HAY WHILE SUN SHINES. One thing is for sure, what ever money we put in today in the market futurelooks brighter for the generations to come.
I have been closely watching the Financial Sector for past few days and what is the update and how are they planning ahead for future. Here is the play for common man and the companies. I have received a letter from CITI (NYSE:C) which states that the APR would increase.Good for the company and Bad news for us. Every mind in this time is Pre occupied with thoughts and fear of investment or skepticism is over ruling the very essence of unpredicted nature of future investments which is fueled by High degree of Volatility of the market.Agreed. But Fed has set few clear cut rules keeping in mind about the present nature of the market. Desperate times needs desperate measures.Fed has reduced the interst rates to http://www.federalreserve.gov/fomc/fundsrate.htm. As of Dec 16th 2008, the interest rates have been at 0-0.25. All the financial sectors have lost dead weight and have trimmed down to maximum that they are just for operations of business to carry on. So I would rather say unless and until the banks are filing for Chapter 11 I do not forsee any more further reduction in employment. But lets not allow a wave of optimism to flow in our minds. One should bare in mind that there are lot of option calls which makes us feel that the market is budding. Thats not the true nature of the market.So lets not loose track. Fed has also made clear statements that interst rates to the customers should not increase just because of 1 missed payments and the customers are to informed well in adavnce before increasing the APR. Now what would the effect of this? Revolving credit has already been blocked. If a person misses a payment or cannot pay, banks would loose the credit they have borrowed from the customers. In order to compensate this they have increased the credit card APR’s. How is that we are going to get benifited would be the next obious question? The financial sector investments are no more lucretive the way they used to pay dividends. Upon saying this, they would rather be more stable in the near future. The banks are instructed to show their progress in repaying TARP(Troubled assert relief fund).Few Banks are already on their way of paying the money but CITI is still hanging in the air to develop a program to pay back but it has reportedly planning to raise $20 billion in new equity to help it pay back the $45 billion it received in funding. Treasury has reportedly told Citi it could repay its TARP funds if it raised that amount.
Get the shares of CITI now. Other banks are Hutington Bancshare(HBAN) ,Bank of America (NYSE:BAC),US Bancorp(NYSE:USB),Wells Fargo(NYSE:WFC) .
Analysis:
1.Citi cannot be sunk easily.The roots are so deep in 30 different nations, it would take Hercules to sink it but remember it will be slow but steady. So this stock is GO GO…
2.HBAN is a local bank is a regional bank but backed up by the state Govt of Kentucky for 1 billion and its has more of low risk business and Yield has not dropped to this low. Get this stock and thank me and you later.
3.The only reason as why I would go for Wells fargo and US Bancorp is Waren Buffet. If he can invest and can steer the economy why not me. If lost he will loose atleast a billion folds than us and I don’t think that he is stupid to make such a move.I do not remember his exact name but he is Agarwal who is the man behind curtains for the futuristic investments. Since I am cocentrating only on financial sector for this post, I would also like to throw like on Hartfor Financials (NYSE:HIG). All I say is MAKE HAY WHILE SUN SHINES. One thing is for sure, what ever money we put in today in the market futurelooks brighter for the generations to come.
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