Nice piece in Barron’s about the under-performance of the Financials this week:
"Big sell-offs often create bargains, but, as Barron’s has warned ("No Bargains in Brokers," Oct 29) investors should tread carefully. Financial companies typically have huge balance sheets and relatively modest capital bases, making them vulnerable to asset write-downs. Bottom fishers in financials already have been burned badly this year."
Earlier last month on CNBC, I noted that the Banks and Brokers were major "avoids, with at least another 20% downside — but I didn’t mean this week!
Here’s a table from the Barron’s piece:
Five Days of Misery
Investors’ confidence in financial companies was shaken last week. So were the share prices of some of the sector’s erstwhile stalwarts.
|Bear Stearns (BSC)||102.16||-12.1||-37.2||11.12||9.2|
|Merrill Lynch (MER)||57.28||-13.3||-38.5||2.87||20.0|
|Washington Mutual (WM)||23.81||-16.7||-47.7||2.37||10.0|
|AMBAC Financial (ABK)||23.51||-46.9||-73.6||7.84||3.0|
NM = Not Meaningful.
Sources: Bloomberg; Thomson Financial
The Week That Shook the Financial Sector
Barron’s NOVEMBER 5, 2007