Fund Managers Betting Big on Banks
I read this interesting article about fund managers buying heavily into bank stocks lately. It left me thinking — do they know something I don’t? Well, for one, these fund managers are closer to the banks than I am and are definitely more familiar with how large financial institutions work. Some of these guys are in charges of billions of dollars so if they’re betting long on banks and financial stocks, logic would indicate that they must see or know something the rest of us don’t.
Bank of America (NYSE: BAC) is one stock that several large funds increased or acquired positions in recently according to this Reuters article:
http://www.reuters.com/article/marketsNews/idCAN02729220090902?rpc=44
That’s not to say these fund managers can’t be wrong but at least they’re making the bets to go long on these stocks. It’s interesting to note that John Paulson, the guy who predicted the financial meltdown last year, has completely reversed course and bought large positions in several financial stocks including Bank of America and Regions Financial (NYSE: RF).
So my conclusion after digesting this information is: If you’re long on bank stocks like Bank of America, Citigroup (NYSE: C), or Wells Fargo, it might be wise to hold onto them. In addition to being able to snatch up these companies at historically low prices, there are people like John Paulson and Steven Cohen who have far more to lose if they do crash.
