Stock Selection Still Matters, Exhibits BAC & MS

Morgan Stanley ($MS) and Bank of America ($BAC) are two utterly broken stocks.  Both of them are taking out multi-year lows.  The chart below shows them on a percentage basis over 60 months versus the flat-lining S&P 500.  Stock selection still matters, regardless of the timeframe and nothing is written in stone that large companies get to be “blue chips” forever.

Behold the suckitude:

Why do these two banks look so much worse than most large company stocks over the last few years?  Simple, we have no idea what business they’ll be in tomorrow.  They can’t do the mortgage stuff the way they were doing it.  They can’t be deposit institutions while running internal hedge funds. They also can’t be levered 40-to-1 in bull markets.  Bank of America and Morgan Stanley are now basically in the plain vanilla banking and retail brokerage business, moreso than ever with the acquisitions of Merrill Lynch and Smith Barney, respectively.

The simple fact is that, even once their balance sheets are cleaned up (which could take years yet), what you’re left with are two very mediocre, albeit large, banking giants with very little sex appeal.  In the meantime, there are only bad headlines and lackluster comps in their future.

Bon chance, Old School Wall Street.

 

 

Tags: ,

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. What is the Bitcoin loophole? commented on Sep 25

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  2. latina love doll commented on Sep 25

    … [Trackback]

    […] Here you will find 23663 more Info to that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  3. Bitcoin Era Review commented on Sep 28

    … [Trackback]

    […] Read More on to that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  4. bitcoin evolution commented on Oct 01

    … [Trackback]

    […] Read More on on that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  5. Smith and Wesson commented on Oct 14

    … [Trackback]

    […] Read More Information here on that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  6. orangeville real estate agents commented on Oct 16

    … [Trackback]

    […] Information on that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  7. dumps shops commented on Nov 16

    … [Trackback]

    […] Find More Information here on that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  8. equation of quality commented on Nov 24

    … [Trackback]

    […] There you will find 87027 more Info to that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  9. tangerine canada commented on Nov 26

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  10. Devops Strategy commented on Dec 01

    … [Trackback]

    […] Find More Information here on that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  11. imitation rolex white gold day date commented on Dec 31

    … [Trackback]

    […] Read More on on that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  12. human hair wigs commented on Dec 31

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]

  13. Regression Testing commented on Jan 18

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2011/07/11/stock-selection-still-matters-exhibits-bac-ms/ […]