Bank Investing: A Practitioner's Field Guide

Description

"Banks are the oil that lubricates the economy. An understanding of how they operate is essential for analyzing any part of the economy since banks represent a large investing universe and control a sizeable portion of assets. With over 800 public tickers representing $3.54T in market cap, banks are larger than several other industry groups. Banks are the largest financial intermediaries in the U.S., controlling $15T in financial assets. Their relative size can amplify effects. For example, a small regulatory or environmental change can cascade and ripple through financial markets and have a major impact on the economy. Bank investing can be a fruitful pursuit: * The most successful investor of our times, Warren Buffett, has a sizeable investment in banks (close to a third of his portfolio weight is in banks). * Banks allow you to make macro-economic bets since they are highly levered to business cycles. * Bank investing allows you to scale your knowledge, as they have relatively homogenized business models... * ...at the same time, banks are diverse enough to drive meaningful dispersion in price performance. This divergence of performance can be taken advantage of by an astute and prepared security analyst. * Banks are great vehicles to make specific investment plays on geographic regions, demographic trends (suburban to urban migration, aging), industries (agriculture, tech, energy), news flow (trade/tariffs, weather), real estate subsectors (NYC office, bay area apartments), and investing themes such as ESG, cryptocurrency, and venture capital. * Finally, fintech disruption is creating an investing opportunity to play the digital divide between banks that embrace technology successfully and those that get left behind. Bank Investing offers you the essential toolkit to become a successful bank investor. It packages practical lessons, theoretical knowledge, and historical context, all into one compelling and entertaining book."--