Tags: Dick Bove | Investors | Treacherous | Bank | Stocks

Dick Bove: Investors Should Get Out of 'Treacherous' Bank Stocks

(Dollar Photo Club)

By    |   Wednesday, 12 April 2017 04:06 PM

Bank expert Dick Bove warns savvy investors to withdraw and cash out from risky and dangerous bank stocks.

"I think you should be getting out of the banks right here. I think they are a very treacherous area to invest in," Bove told CNBC.

"You are going to have to wait till the fall before you are going to make any money in bank stocks," he said.

The reasons people are investing in bank stocks are "simply wacko," Bove, vice president of equity research and financial sector analyst at Rafferty Capital, said.

Bove said that investors in essence have an "incorrect" theory that bank stocks are not really companies but bond-market surrogates.

"What's happening now is if the yield on the 10-year goes down, which mean that the value of the assets of the banks go up, bank stocks go down," Bove said. "If the yield on the 10-year goes up, which means the value of bank assets go down, bank stocks go up." Bond prices typically go down as yield rises, CNBC.com explained.

"I still think JPMorgan is one of the best companies the United States has ever created, under Jamie Dimon. That's a pretty good stock to look at," he said.

Meanwhile, other gurus recently have offered their insight on the best places for investors to seek shelter, and possibly profit, in this volatile market.

Entrepreneur, stock trader, television personality and author Adam Mesh told Newsmax TV that not every section of the stock market is a safe bet just because investors have enjoyed a bull run since Donald Trump’s presidential victory.

“It's hard to explain how it got here. All of last year seemed surreal in how we went up and then the expectation was going into the election if Trump became president that we'd go down, but then we just continued higher and now it seems that everybody is bullish,” he told Sunday’s “The Income Generation Show.”

“It's just hard to buy up here because everything has come so far already. If you were going to go see Hamilton in New York and you didn't buy tickets because they were $250, would you pay $1,000? It's the same thing right now with the market,” said founder of the Adam Mesh Trading Group.

But be advised: one of the most respected financial minds of our times bluntly warns there is no safe place for investors these days.

Former U.S. Treasury Secretary Lawrence Summers said that while it’s difficult to call a market top, valuations have gotten ahead of the economy in recent months.

“I’m not sure that I see what in the economy would justify a market move of the magnitude we’ve seen in the last months,” Summers said in an interview Wednesday on Bloomberg Television.

“It wouldn’t surprise me if people look back and see that there was a bit of a sugar high in some of the valuations that we’re seeing,” said Summers, a Harvard University economist who led the Treasury Department under Democratic President Bill Clinton.

Summers said that there’s more downside risk to markets than upside risk right now, and said there’s “a certain amount of apprehensiveness” given politics in Europe, uncertainty in Asia and challenges moving U.S. legislation.

(Newsmax wires services contributed to this report).

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Dick Bove: Investors Should Get Out of 'Treacherous' Bank Stocks
Dick Bove, Investors, Treacherous, Bank, Stocks
Wednesday, 12 April 2017 04:06 PM
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