As my good friend and partner EI pointed out we're "often confused why it takes so long for the Mr. Market to catch up with something close to reality".
We've spent the last couple years scouring literally hundreds of small banks across the country looking for opportunities and there simply is no rhythm or reason to price vs fundamental value.
It's fair to say that most small banks in the country post recession are in a similar phase of recovery. But before that most of them experienced a 90% (or more) drop in market value since 2007/8.
I think it's also fair to say that small banks weren't known in the past to be a traders stock. They were something only investors tended to buy. Historically, as EI can attest, bank stocks aren't known for big moves...maybe 2% a year...which is boring stuff for a "trader".
Now suddenly with market values so low and all these small obscure banks making a recovering, traders have discovered these banks and stepped into the void with absolutely no regard to a banks' fundamentals. I'm not being judgmental when I say this but if you ask them they'll say they bought in because it was "cheap".
It's impossible to predict which bank they will descend on or where they'll take it. So long story short...I have no idea where this will go.
Over time I like banks that are currently selling for under book value with robust earnings. There are a few out there ...and over time I think prove to be the better buy.
Trading or Investing...Good luck!
Chevy
Learn something new every time you invest...and take it with you to the next opportunity.
