Well, Goldman Sachs (GS) and JP Morgan (JPM) are excellent, Wells Farge (WFC)– not a lot. And Im uncertain I d call JPM “good” as $5.2 Bn of the quarters $14.3 Bn in profit originated from the release of loan reserves that were reserved in 2015 to cover anticipated loan defaults. Considering That the Federal Government tossed $6Tn at the economy ever since– it turns out they didnt require the $5.2 Bn to cover bad loans so now the cash (which was constantly in the bank) is moved to the earnings side of the journal.
What we have at JPM is a huge “beat” as earnings were forecasted to be $3.10 per $154 share for the quarter and now its $4.50– almost 50% greater than forecasted. Even if we presume the bank returns to “regular” $8Bn quarters, were still taking a look at a $40Bn year and you can buy the entire bank for $473Bn– okay. We currently have Goldman Sachs (GS) in our Long-Term Portfolio (LTP) so were not going to add JPM and GS likewise knocked it out of the park. We were fretted about JPM due to the fact that they have normal banking (chase) and we didnt rely on those stimulus checks to produce a lot business however they did– mainly since the Government wired the cash to your bank and didnt just send you a check to invest. We were far too conservative with GS when we made it a Top Trade Idea for our Members on October 14th:.
Bank incomes are good..
I have actually constantly objected to Loan Loss Reserve accounting because it enables a bank (and numerous other business) to take revenues that have already been stated (and already moved the stock) out of Cash (revealing a loss as needed for taxes, housekeeping, and so on) and then back to profits when they feel like it (to increase the stock rate or save a quarter). Particularly for Businesses that are able to purchase back their own stock when the rate is depressed due to a loss they intentionally caused and after that, when they wish to offer more stock or take benefits– they merely re-recognize the incomes as needed. What a scam!
