Banking Blues

Are banks the new tech? It sure seems that way.

After the internet bubble burst, quarter after quarter went by where tech companies would lower their revenue outlooks, the stocks would dive, and people would buy in. Now quarter after quarter goes by where banks announce that they have to raise capital, the stocks dive, and new investors dive in. The latest news about smaller regional banks fits this pattern

But if you averaged into Tech stocks throughout 2002 you would have received a 7% annual return through today—about 1% better than the market. And Tech stocks hardly pay any dividends. Today you’re getting paid over 4% just to own the banks. And if they recover, their total returns should be great.

The moral of the story is that it’s usually profitable to be buying an asset that nobody else wants. And the best time to buy is when the blood is running in the streets.

Douglas R. Tengdin, CFA
Chief Investment Officer
Leave a comment if you have any questions—I read them all!

Follow me on Twitter @GlobalMarketUpd

direct: 603-252-6509
reception: 603-224-1350 •
By |2014-09-03T19:47:25+00:00June 19th, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

Leave A Comment