Banking Analyst Dick Bove Changes His Tune on the Sector
Rafferty Capital Markets Banking Analyst Dick Bove has changed his tune on bank stocks, taking a bearish view of the sector. “I made the decision that you’re going to lose money in bank stocks if you hold them through the summer.”
Bove told the FOX Business Network’s Stuart Varney three things led to the change. “Number one, I’m having difficulty believing that the tax cut is going to be passed before 2018. Two, there’s no likelihood of major deregulation coming in the banking industry. And three, business is lousy.”
Though Bove remains bearish on financials in the near term, he says investors could choose to hold onto bank stocks into next year, when he predicts the outlook for the sector will turn positive again.
“If they expect to make money over the next six months in bank stocks, they’re not going to do it. And therefore, they have to make the decision if they want to hold through that period in hopes that in 2018 which I expect will be better, things will then get better for bank stocks.”
Would Bove make the same sell call beyond financials? “Well, my gut feel would say yes, but I’m not a market timer so I don’t know that I would have any good advice there.”