For those looking to make money on the ongoing panic in the financial services area, what is the best vehicle (ETF, mutual fund, equity, or bond) to play a rebound in this sector on the long side? Your ideas, please. I'm not interested in short ideas, just longs. Thanks....
2007-08-11 14:03:25 · 5 answers · asked by johnxspeaking 1 in Business & Finance ➔ Investing
Indeed they stuffing has been knocked out of the financial sector. I am not sure what the best way to play it is. Here are a couple of ideas for you to consider.
ACAS and CSE are two options. These companies provide financing to smaller companies. Both have been beaten down a lot. CSE the most because they own a portfolio of mortgage securities. This portfolio however is supposed to be all Freddy Mac and FannyMay guaranteed. There are other companies in this sector that are also suffering similarly.
Money center bank stocks also have been hit very hard. BAC and C are both very large and although they may take some writeoffs as a result should weather the storm. But who knows for sure. There are others also.
If you are really a risk taker, consider CFC but I think it might shed another 10 to 15 points yet.
Among the ETFs, they will allow you a wider brush to cover more area.
Maybe the safest would be IAT, a regional bank index. But it has fallen already about 12% so far this year. This type of bank I would think anyway should have the least exposure assuming they did not buy a bunch of sub-prime mortgage paper, which they might have. But certainly it would be out of character for them to do so.
VFH is a broader holding of larger financials. Down only about 10% this year.
PJB is sort of unusual. An index of bank stocks that is supposed to have appreciation potential. It is down about 13% this year. Some appreciation.
There are others also of one sort or another. KBE and KRE.
If you really want to play a rebound don't go for the financials. Instead go for the home builders.
XHB down 29%
ITB down 37%
Or you can take a pot shot at a particular home builder CTX is down about 20 points.
2007-08-11 15:05:30 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Not all financials have exposure to subprime mortgages but they all went down in sympathy. Find the ones that were punished unfairly and play the rebound.
One possibility: CNS
2007-08-11 15:54:16 · answer #2 · answered by Anonymous · 0⤊ 1⤋
None at this time.blood has just stated to flow.When a few banks go under and hedge funds tank! About a year,may be longer...
2007-08-11 14:16:48 · answer #3 · answered by Tom W 1 · 0⤊ 0⤋
Professional investors don't try to find "bottoms".
2007-08-11 16:36:06 · answer #4 · answered by Common Sense 7 · 0⤊ 0⤋
CFC
2007-08-11 19:16:24 · answer #5 · answered by Anonymous · 0⤊ 1⤋