RE: RE: RE: come to the auctionThis is why I follow my charts and not analysts. Analysts can't see crashes coming - they have no idea what to look for. Fundamentals are only a small and cloudy part of the picture.
What Bove doesn't get is that there is a reason banks are trading at a discount to cash. Earnings have already been overcome by bad debts. This happened years ago, and continues to be true. Mark to market....the bad debts have always been there, they just don't show in the earnings. The market knows this, and can't be fooled.
Lots of bank earnings next week. It doesn't matter what the earnings look like at the banks, the banks will fall. The patterns and cycles are complete. The current pattern with the slowly upward grinding of the mkt is not new, and it has happened before (near identical). The last time that this pattern showed in the mkt, the Dow fell 86% over the following 2 years with large legs down and rallies in between.
Much of my analysis lately is going into where I think the mkt will bounce on the way down.
I'll explain more over the weekend. My micro pattern is also complete. The reason things took so long is that each wave is extending to the maximum possible. It is an elastic that is stretching to the max.
Banks Entering 'Golden Age' With 20% Profit Growth: Bove
Published: Thursday, 13 Jan 2011 | 5:08 PM ET
The banking industry is entering another "golden age," with so much cash on hand that earnings will grow 20 percent annually over the next few years, well-known banking analyst Dick Bove told CNBC.
"There's so much cash in some of the banks in the United States that they're actually selling at below their cash value per share," said Bove, of Rochdale Securities. "For example, Citigroup, Bank of America, Bank of New York, State Street, Northern Trust—they all sell at below their cash per share."
"What that means," he continued, "is that these companies now have tremendous amount of liquidity, which ultimately can be put to use to generate further earnings growth. And I think for the next two to three years, what you will see is that banks will actually increase their earnings at about a 20 percent rate per year, which will be far faster than what you're going to see from the industrial averages."
Dick Bove's "Once in a generation call"
Back on March 7, 2008, when the financials stocks were melting down, Dick Bove came on CNBC and told the world to buy the banks. He also had this to say about Citigroup:
I think the stock will be trading at $55 in the next 3 years, concludes Bove, which is double from where it is at the present time ($25). “You only get a once in a generation chance to buy a stock like this at this price. This is it,” he says.
Friday, 7 Mar 2008
In what many consider to be the boldest call on the Street in a while, Dick Bove called Citigroup the best buying opportunity he’s ever seen.
Dick Bove joins the traders to explain his reasoning. Following is a synopsis of his main points.
- Citigroup is at its cheapest levels since 1990
- The stock is currently trading 8% below book value, an historically wide margin
- Even when you exclude writedowns, the stock seems cheap. And Bove thinks the writedowns should be less than expected.
- One of the big problems with Citi in the past was its weak management, but they might have turned the corner. Bove thinks the current team is a significant upgrade over the previous regime.
- And as an added benefit, no bank has the global reach that Citi does.
The Bottom Line: I think the stock will be trading at $55 in the next 3 years, concludes Bove, which is double from where it is at the present time ($25). “You only get a once in a generation chance to buy a stock like this at this price. This is it,” he says.
https://www.cnbc.com/id/23522110/