Instead of Running Around Like a Crazed Chicken
I've continued spending a lot of time thinking about the small bank trade this week amid still-strong improvements in balance sheets and bottom lines in the space. What we are not seeing is a truly strong rise in the valuation -- these stocks are still fixed at roughly 80% of tangible book value, on average, and in my view this creates an enormous opportunity in regional and community banks. I have been trolling around the Internet the past few days, looking for articles and commentary on the group that either reinforce or deflate my opinion thereof. It has been an interesting experience.
This morning I ran across the most recent commentary from the managers of the John Hancock Regional Bank Fund (FRBCX). Back in the 1990s, this was my favorite mutual fund for small investors who wanted to participate in the opportunities created by the savings-and-loan crisis. The fund has struggled with the collapse of the sector for the past decade, but it now improving dramatically as banks have been restored to profitability and viability in the past year. I am not much of a mutual fund guy these days, but if I had access to this fund in my 401k program, I would not hesitate to put some money in regional banks via a fund....450 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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