On Sunday, I gave you some information on the financial sector. My prediction on Sunday: the huge short-term boom in financials would not last!
Let's take a moment to examine what the four stocks I've mentioned have done in the past two days:
Bank of America (BAC): down 5.6%
Capital One Financial (COF): down 12.3%
Washington Mutual (WM): down 19.4%
Etrade Financial Corporation (ETFC): down 13.9%
Well, what happened? A UBS downgrade of American Express (AXP), Capital One Financial (COF) and Discovery Financial Services (DFS) was issued yesterday. Analysts warned of a moderate consumer-led recession and the likelihood of rising unemployment, with higher credit card losses leading to lower earnings through 2009. Merrill Lynch downgraded Wells Fargo (WFC) and Wachovia (WB), saying loan losses may increase.
There will be better deals in the banking sectors later on. Just hold tight!
In play: Ultrashort Dow30 ProShares (DXD), the only stock I've recommended, is up 6.5% since last Friday. The Dow itself is down almost 350 points. Now that's smart investing!
Come back tomorrow, when I will tell you where all of the money leaving the financial sector is going!
Dollar Bill did not own any shares in any of the stocks he's mentioned at the time of publication.