Some are calling to buy the financials now. I'm not so quick to think so. With the Lehman situation still unfolding, and possible more problems coming for the financials, the short sale is still not over yet in my opinion.
I'm currently selling short on JP Morgan. See my "JP Morgan: Why I'm Selling Short" article on Seeking Alpha. I see a bottoming coming for the financials with excellent buying opportunities for the long-term, but not just yet. I don't think its the time yet for a variety of reasons. I do think its time to start looking closely to buying a little of the financials on further weakness.
I've posted the following article from CNBC to provide some contrast to my short sell position on the financials. Maybe I should be covering my short, and going long? I intend to do just that in time. The question now is when?
The Financials from CNBC.com
The way some money managers are talking it looks like the worst of the storm may have passed for the financials. Legendary short seller Jim Chanos has shifted some of his focus away from the battered group and is now looking at commodities. Metropolitan West Asset Management’s Tad Rivelle told “Street Signs” that his firm is looking to fixed-income securities from JPMorgan Chase, Bank of America and Citigroup Cramer, too, has recommended a few stocks from the sector.
Jim Cramer agreed with Rivelle that Bank of America and JPMorgan Chase were good companies, and the Mad Money host has been telling viewers to buy these stocks – not the preferreds – on any weakness. Cramer’s bullish on Wachovia and BB&T as well.
Investors who want to buy preferreds should consider the PGF exchange-traded fund, Cramer said. Buying an individual preferred is a bad idea as most have gone down in value since those of Fannie Mae and Freddie Mac were crushed as part of the government bailout. Cramer watches the PGF as an overall sing of financial help, he said, because preferred stock usually goes down before any sizable negative event.
Cramer recognized the volatility of this market, saying, “It’s very hard to have any conviction.” But held firm in his belief that some investing strategies are working right now.
Click here to review Cramer's "Actions Alerts Plus" and receive his book free.
Did you like this article?
Submitted By 
's
