Banking Industry: These Thieves Were All Trained in Bagdad

October 8th, 2013

by Steven Bauer

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

My Logo is: "Investing Wisely."

Forecasting is what it is all about for me. Without this very profitable tool, making timely and "Wise" investment decisions for myself and my clients would not be possible. Yes, "Wise" Investment decision-making is also what it is all about.

This has to do with what I refer to as my "Rotation Model." As the marketplace cycles from Bull to Bear typically the participating securities "rotate" into favor and back out of favor. This produces an entirely new batch of both Industry Groups and individual companies / ETFs on my asset management lists from month to month.

This includes the market sectors, but they tend to move in and out of favor much more slowly. industry groups tend to also rotate within their sectors. Staying on top of all of this in an ever-changing world of economics is quite a trick and requires much time these days. Some do their jobs well and others do not, it is just that simple.

My Basic Views on the Banking Industry

The Financial Market Sector still have their barn-burners with Industry Groups, Companies and ETFs all doing well. The Banking Industry Group is one of those currently remaining in Favor. However, my Forecasts suggest that these good times are waning along with the Financial Sector itself.

Personally, I dislike the practices of the Banking Industry over the recent decades and they themselves have made it quite factual they there is a dependence of Washington on their power. For me that means they will once again get themselves in trouble and need Government intervention.

My current Forecast for the Banking Industry has remained Favorable now and for nearly five years. There was just one time frame that I took profits; that is in early 2011. By mid- 2011 my Forecasts clearly provided what I call "Re-Entry Points" and I am currently on a HOLD once again. I do have an Initial Bearish "Warning" in place, but that is only activated when I see some possibilities of again taking profits. The real serious time frame becomes one when I move to a Strong Bearish "Warning." When that occurs, soon thereafter I will definitely be taking profits. (We may be close to that happening). This does not mean that I am equally comfortable with all the component Companies. When Companies like many foreign banks started to pull-back that too was clear that profits were a more prudent investment decision than holding. I am a Very Cautious Asset Manager about preserving profits once I have them going for me.

The Banking Industry is back on its feet primarily due to government stimulus and support. That scene is fading and the average investor is not doing as well economically as is rather commonly believed. The notable gap between the wealthy and not so wealthy is widening and that should create problems for the Banking Industry. There are massive cut-backs in spending in many areas and with interest rates on the rise and the maturity of the Banking Bullish Cycle being very "Toppy", I suggest my Forecast is well supported with sustentative economic and historical market facts.


The Table below shares several of my Component Industry Group Indicators and a couple ETFs of the overall Banking Industry. At this time all are doing well, but more and more often there are some clear negative variances or divergence in my Analytics of how they Forecast.

Note: There are many more combinations of the above information in my Forecast before any investment decision can be prudently made. My Notes for Table will offer help to understand my Methodology of "Investing Wisely." I hope this will provide you with guidance.

Prudent Investment Decisions

Is it too late to Buy? At this time, the answer is Yes. You just might want to wait until there is the next Bullish General Market Inflection Point to do so. Should this be your strategy, I would be both cautious and highly selective in my securities choices. My General Market Bullish and Bearish Inflection Points occur only several times per year. I hope you are a Patient and Disciplined investor.

My work/analytics starts with Forecasting and ends with very selective Formal Recommendations. In between it is a matter of waiting for the next General Market / Banking Bullish or Bearish Inflection Point.


A Thirteen Year Perspective on the Banking Industry ($DJUSBK)

It has NOT always been like you are being told by so many who do not take the time to do their homework and practice "Investing Wisely." The Banking Industry has taken some big hits over the years. You will also note that it has not even come close to replicating the S&P. There are clear reasons why, if you take the time to study this Industry Group closely.

Compare a Few Companies (from a Percent Point of View)

Perspective is a very profitable investment tool and seldom used effectively. There were clear reasons both fundamentally and technically for these particular securities to out-perform. This is true about all out-performing Companies / ETFs. Identifying these prospects is obviously of incredible value and Accurate Forecasting is always ahead of the fact. I hope you know what I mean about "ahead of the fact."

Articles for Staying "Ahead of the Fact"

Should you wish to read my latest article on Forecasting the following Companies and ETFs. Just Click on the Symbol. You will be taken (Linked) to my most current article as well at my last 20 articles on that Company or ETF. (May I suggest that it is an excellent way to gain insight into the accuracy of my Forecasts and Opinions). By doing so, you will have access to over 1,000 articles where I share my Analytics. In addition I have recently published all 500 of the S&P 500 Large-Cap component Companies. And, a select 200 of each of the S&P 400 Mid-Cap and S&P 600 Small-Cap component Companies. I stay quite busy doing my homework and analytics.

I hope you will find my "stuff" well worth your Time and discover that it is very Accurate – "Stuff." Please Click the links below symbols for specific commentaries that I have written:


Supporting Articles for Further Understanding of My Forecasting - Methodology

  1. Please consider reading my article on "News." Any of the above Banking Companies / High Profile Companies / ETFs is like most all of them. They like to tell "Stories" or share "News" that they believe the "Financial Analysts / Financial Media" will want to pick-up upon. That promotion often is not supportive to “Investing Wisely.” It also directly correlates to the Rise or Fall of Price Movement of that Company.

    I learned in my doctoral studies one thing, amongst many others, that has proven to be very worth-while (profitable) for over 50 years of managing other people's money. Please have a look at this Flash Update.

  2. I believe this article on the Banking Industry, and my "Flash Updates," like so many that I write, requires a supporting article with Additional and Specific Information and Details. Please have a look at the following commentary on Identifying Tops and Bottoms and Inflection Points.

  3. My "Flash Updates" are definitely either "Alerts" or "Warnings" and can often be a leading or "Heads-Up" to eventually making or not making a Buy or Sell – Formal Recommendation to my Clients. I have a unique Methodology for my own guidance to make such decisions that I offer some insight into in the following article: Buy / Sell And Short / Cover – Formal Recommendations.

To Email Me with your questions or thoughts:

Concluding Remarks

At this time I must reiterate my Initial Bearish Warning and Strong Caution and prudence for holding many of the component securities of the within this Banking Industry Group. Perhaps after a notable pull-back -- but even then you will want to pass or definitely be highly Selective with you choices of investment securities.

Since the U.S and World economies remains quite weak, and the positives are most-often off-set with further negative economic data and the stock market itself is very over-valued and currently very over-bought. Interest rates are on the rise again! TAKING PROFITS (and HOLDING-CASH, if you have any), is the best place to be. If you don't have any CASH, I suggest you get some! Oh yes, I have my exceptions, on my Bullish List, but it is diminishing almost daily. Holding with the focus on selling is my recommendation at this time.

There will again be fantastic investment opportunities if you will just be patient and disciplined with the management of your portfolio.

Most analysts remain overly optimistic.

Smile, Have Fun, "Investing Wisely,"

Dr. Steve

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