From the “timing is everything” department.
In a post entitled “Financials: This is What a Bottom Starts to Look Like” I said “So does this means the financials index (XLF) has nowhere to go but up? No, there may be a little more downside from here. It does mean that there will not be much more significant downside though. Currently trading at a 5 year low, the sector as a whole is vastly oversold.”
The XLF (the financial sector ETF) stood at $27.88 the following trading day (1/14) and dropped 8.5% to $25.50 on January 18th. Since then it has rebounded from that low and stands just over $29.
Was that the low for the financial sector in 2008? Barring a seminal event (terrorist attack, another war, etc.) my gut tells me yes..
Consider since then Wilbur Ross is now in talks with Ambac (ABK) or another bond insurer, Ajit Jain at Berkshire Hathaway (BRK.A) has said they “are talking with” them or MBIA (MBI) and Leucadia (LUK) is acquiring shares of AmerCredit (ACF) at a breakneck pace. These are very smart people who have made billions of dollars picking up scraps of unwanted sectors.
The fact they are now circling the financials must tell us something…
Disclosure (“none” means no position): None
