As David Tepper pontificates why he didn’t clear the deck of all his financial holdings – consider this contrarian thought.
Is buying the banks here at the very least a hedge?
You will notice that during the early bear market days of the past decade the banks actually outperformed the swooning SPX by a wide margin. This was in part due to their complicity in the housing bubble. It remains to be seen where their business model will take them today, considering the housing market is still bleeding.
However, we know that corporate America is flush with capital and will eventually turn to the banks for distribution. And yes, it will all be quite eerily similar to the easy money days of the housing bubble. But instead of of your 24 year old nephew Jimmy buying an apartment building in Newark – it will be Groupon buying GE.
Food for thought.
I just joined Twitter. All my trades and occasional market musings are disclosed in real-time here.
(Positions in UUP, & ZSL)
Disclaimer: This is not investment advice. Always do your own due diligence. Erik Swarts is not a registered investment advisor. Under no circumstances should any content from this website be used or interpreted as a recommendation for any investment or trading approach to the markets. Trading and investing can be hazardous to your wealth. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor.