It was just two years ago, I was telling everyone that banking and financial stocks were two expensive. I was screaming SELL SELL SELL! Between 2002 and 2007, Price-to-Earnings were low at around 11-12 times for quality stocks like Bank of America or Citigroup. Dividends were paying a good 4% at times. But I still thought banking was EXPENSIVE!

By measures of financial valuations like PE, price-to-book, dividend yields and so on, they look more than reasonable. In fact, many value investors were heavy on financials too. By measures of common sense, valuations were way off my charts! The party cannot last on all night!

Patience Pays Off!

I guess my reasoning paid off big time. While I sold off all my banking positions 2 years ago and also being extremely patient. Listen to this, I had waited 4 years to buy Citigroup! That's what I call patience.

Screaming Buy!!!

Today, I am doing the opposite. Since the beginning of 2008, I have been telling everyone to buy quality Financials or brokerage stocks. I have been accumulating large positions on a few stocks.

It's pointless to name all the financials stocks. There is a bunch of them. Look for strong balance sheet but been hurt recently by this whole mortgage/credit crisis. But do your due diligence, make your own opinion and you'll find lots of treasure in financials today!

The Storm will Pass

As always, this crisis will go away. The Feds, the US government and the banks are working to resolve this issue. The system will work its way our of this mess.