A bank rally based on nothing is a bank rally I believe in. That's right; as oxymoronic as that sounds, when you have a rally that occurs in this group, it is usually ahead of some news or some events that will justify the turn.
I scoured everything this morning. We had a disappointing meeting from Action Alerts PLUS portfolio holding Wells Fargo (WFC) about how much money can be made off of rate hikes. Citigroup (C), another name in the portfolio, did a big settlement with the government. But nothing from Bank of America (BAC) or JPMorgan (JPM). In fact, the last significant thing I saw for these was a downgrade of Bank of America by Keefe.
(Speaking of the portfolio, I hope you have heard about our offer giving you the possibility to try all TheStreet's subscription products for $1 for one month.)
I think this is all a sign that the two-three rate hikes scenario is being viewed as a major positive for net interest margins, and that's what has always mattered to this group.
I think you hold on or buy. The discount to true book for Citi is insane, and I think it's got the cleanest bill of health of the whole group.
The temptation is to get out, because they are finally giving you a chance to evacuate.
That's the wrong approach. For those who aren't in them, they are finally starting to roll.
That's when you buy. We will find out why they moved soon, and people will say "ah ha."
Get in before the "ah ha" moment. That's the only way to go.