Monday, 10 March 2008

Fighting the Fear...buying C, FRE, LEH

Financial stocks are taking a BEATING today, following Bear Stearns liquidity rumours, taking the stock down the most since the 1987 crash, and battering other financial stocks. Lehman also out saying they are laying off 5% of their staff globally.

Well, I like to step in to buy when fear seems high, so today could be the day. I just paid $20.00 (-4%) for Citigroup (C), $17.27 (-12%) for Freddie Mac (FRE) and $44.00 (-5%) for Lehman Brothers (LEH). I was also going to buy some Bear Stearns, but it was 5-6% off the lows of the day so I'll just wait that one out. I bought around $10k worth of each stock.

Whilst the fundamentals are still clearly disgusting for the financial sector, when fear is high you can sometimes get great entry levels, so looking for a good near-term bounce in all of these, purely on technicals. Lehman seems a decent one though, I still think them and Goldman are pretty well run banks, so will probably whether all but a complete financial meltdown (something I am definitely not ruling out).

1 comment:

2and20 said...

This post over at is required reading for anyone involved in financials. Outlines why AAA ABS is not nearly as bad as the ABX indices make out.

Liking my FRE long even more now.