Thursday, August 23, 2007

If investors had taken my advise in the last few weeks, they would have profited from nearly every stock I recommended. Now, if you are one of those investors, it's probably a good time for you to take more risks, now that you have more confidence and money on your side. I believe in taking sound, calculated risks for maximum return. To do so, I believe the Financial sector is currently on sale, and is a good investment.

Bank of America invested $2 billion in Countrywide, the nation's leading mortgage lender, in what Countrywide called a "vote of confidence" as it weathers the credit crunch. Countrywide shares jumped more than 20 percent in after-hours trading. Bank of America said it looked at Countrywide's books and found the company to be undervalued. (Bloomberg) "Countrywide is no longer on the endangered company list," said Punk Ziegel analyst Dick Bove. "And it is a prize despite what has been said recently." (Los Angeles Times)

Encouraging news from banks -- including large central-bank borrowing by four U.S. banks and Bank of America's investment in Countrywide -- helped boost optimism early today that the damage from the credit market drought would be contained. (MarketWatch) Asian markets ended their day higher, with the Shanghai Composite Index closing above 5,000 for the first time. Japan's Nikkei 225 rose 2.6 percent, despite the Bank of Japan's decision to leave its interest rates unchanged. (AP in Yahoo! Finance) "The market is getting more comfortable," said ABN Amro Morgans analyst Tony Russell. "But confidence can certainly be shattered by any more revelations." (Reuters)

Putting together these signs, on top of Warren Buffett's investment into Wells Fargo, investors should also get into the scene now. Look into the large cap Financials and/or buy index funds. You can contact me for specific stock names and purchase price points.

No comments: