Courage

The world has a funny way of not ending.

Just when the gloom couldn’t seem much darker, here comes the cavalry. This time it took the form of Wells Fargo, which not only met earnings expectations and raised guidance, but actually had the audacity to raise the dividend. Don’t they know we’re in a banking crisis? They’re supposed to be asking investors for more capital, not giving it back!

Other banks have followed suit. JP Morgan earned 60% more than expected. PNC Bank’s earnings were up 10% from a year ago. As a result of all this good news, bank stocks have risen about 25% in the past couple days. While this doesn’t erase this year’s decline, it does lift the cloud a little.

Warren Buffet says to be brave when others are afraid and to be afraid when others are brave. Judging from the way the market’s been behaving, this may be a good time for bank investors to show some grit.


Douglas R. Tengdin, CFA
Chief Investment Officer
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