Recently, I have been trading BofA again. I sensed it was headed above its 52-week ceiling, and I was right. The stock is coming out of its long, long slumber and almost all signs point to a potential upside that could go on for a while. Now, imagine my surprise when one of my favorite targets in my campaign against the oracular industry predicted that BofA was ready to take off on that long climb uphill.
- Bank stocks offer some of the best opportunities for investors in years, with Bank of America and others poised to post double-digit gains in the year ahead, well-known analyst Meredith Whitney told CNBC on Tuesday.
Her take on bank stocks is similar to the one I have and have had for some time, but in the article, a new consideration pumped up my excitement about the future of BofA.
- The main catalyst comes in March when the Federal Reserve is expected to approve banks’ plans to return more capital to shareholders through dividends and stock buybacks in March, Whitney said.
Now that makes sense to me, but I must admit, I did not factor that into my decision to start trading BofA again, but I will now, thanks to Meredith Whitney.
Ah … you might be thinking, how can he quote and give credit to Meredith Whitney (with a straight face) after he rode her so hard about her municipal bond predictions? My answer is simple. I have never knocked her for her analyses in the financial sector. That is what she does, and she does it well, as I have also said. Besides, her words are only corroboration for my own thinking, which is the way it should be. Market players should not rely solely on analysts’ conclusions. It is their thinking process that is of interest.
- Trends change before they’re reported on balance sheets. Unfortunately many investors fail to actually observe the economy in which they invest.
I love the above quote. It is totally in line with my whole trading and investing philosophy. It is always nice to know one is not a lone wolf howling in the night. Okay, the lone wolf thing is silly, as many a successful trader/investor will tell you that understanding “the economy in which they invest” is as important as anything else they do.
Just before sitting down to write this morning, I read a lucid and thoughtful article on why Germany’s economy is poised to collapse. Simply, the author argued that Germany’s strong export economy was faltering from a declining demand for its particular products – pharmaceuticals and precision cars, primarily. The author suggested that folks in the emerging economic world would want iPhones and Italian clothes, rather than Porsches and prescription drugs, essentially. Interesting thesis, but those in the German business loop don’t seem to agree.
- Germany’s Ifo Business Climate index has improved for the second consecutive month, rising to a greater-than-expected 102.4 in December from 101.4 in November.
Finally, here is an irony that points to the idea that no matter the technology, fundamentally people behave under the same emotional umbrella. We have needs that practical technology just cannot fill.
- After years of criticizing physical stores as relics, even e-commerce zealots are acknowledging there is something to a bricks-and-mortar location. The companies say they are catering to customers who want to see what they are buying in person, and who see shopping as a social event.
Actually, aside from the irony and the human perspective, there is a trading and investment aspect to the information. The simple reason e-commerce sites are turning toward brick and mortar stores is that they are finding that overall sales increase. Consider the following.
- EBay and Etsy are testing temporary stores, while Piperlime, the Gap Inc. unit that was online-only for six years, opened a SoHo store this fall.
Trade in the day; Invest in your life …
