David McDonough's avatar
$488.2m follower assets
Bought $SCHW: fear seems overblown (reminds me of fear in 2009 GFC)
My first/best trade ever was buying $C in 2009 in the middle of the GFC at close to $1 per share.

I was super naive back then then but felt like it was a strong bank on fundamentals and I knew the gov't would never let it fail. Today is very much NOT the GFC! but I'm seeing market behavior that feels similar and figured I'd make a similar trade, for old time's sake.

Specifically, bank issues create a very scary narrative that tends to drive an overblown selloff. $SCHW has pretty strong numbers and 80% insured deposits so I don't think the doomsday scenario is possible. When the dust settles - if it does - there might be a nice 10-20% gain to be had. It's a small/risky call that the U.S. will protect American confidence in banking at almost all costs. (that latter part doesn't seem like a risky bet).

Related: I know our system has plenty of flaws, but when we bring to bear the full weight of the United States Government to eliminate a threat or solve a critical problem, holy hell is it impressive to witness. Interesting behind the scenes look here:

(Also fascinating that gov't can be so inefficient in so many ways... and then have these small but critical pockets of unparalleled, ruthless hyper efficiency, like the military and financial protection)
Josh Rozin's avatar
Just picked up some myself, I smell a V recovery. Set a tight stop loss though.
Jared Watson's avatar
Completely agree. It’s rare to see a high quality company drop 45% in two days from an already reasonable, if slightly inflated, valuation. I think Schwab has proven they can execute efficiently and continue to grow revenue in any macro.
Conor Mac's avatar
When there is blood on the streets

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Jon Bond's avatar
was waiting to get the green light from @mcd ...
Rihard Jarc's avatar
if $SCHW goes under it's a total doom scenario. Can't imagine it...
Plutus's avatar
I mirror your belief in $SCHWAB

Another bank with nice liquidity and likely subject to an over blown correction— Western Alliance ($WAL) . Curious to hear anyone else’s thoughts on $WAL and if/when they positioned themselves.
Maverick Equity Research's avatar
great story, thanks! Funny Lehman times ;))



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