Why the Gravy-Train is Over for Most Banks in the Years Ahead
May 2nd, 2008 | By Eric Roseman | Category: Stock Market InvestingThe United States is likely to suffer a prolonged economic slump as sub-prime and other facets of credit continue to unwind, constricting bank lending and reducing the economy’s ability to recover quickly like it did in the 2001 recession. Also, the next administration will spearhead a global effort to regulate financial services - especially segments of investment banking that threaten the financial system. That won’t be bullish for earnings.
Some banks probably belong in a diversified global portfolio. These should include institutions with no sub-prime loans, minimal securitization revenues tied to real estate and capital Tier 1 Ratios at or above international standards. And yes, make sure the bank pays a dividend, too!
ERIC ROSEMAN, Investment Director
EDITOR’S NOTE: With this disappointing financial sector, Eric is sticking with strong long-term commodity plays in the food and beverage sector, mining and precious metals. And this past month’s minor commodity pullback has created some major opportunities for Eric’s Commodity Trend Alert subscribers. Just last week, he recommended one of the world’s favorite candy companies, and two more plays that take advantage of this farmer’s bull market. (Commodity plays like these have helped Eric grow his portfolio of 40 plays - with a stunning average of 119% - including both winners and losers.) Click here to learn more about Eric’s service now.
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Eric serves as an editor and Investment Director for The Sovereign Society's Commodity Trend Alert. Eric's talents include blending a dozen or more alternative investment funds to produce consistent returns to traditional asset classes and making commodity based recommendations with huge upside and limited downside.
