Our Updated Take on Financial Stocks
We still see opportunities amid the turmoil.
In the wake of the current credit crisis, we have spent a good deal of time examining and reassessing how we value financial stocks. This article offers an encapsulation of much of the work we have done so far.
We begin our discussion with a brief history of the lending bubble and its fallout, as well as a description of the players and the funding mechanisms. We have also outlined some mitigating factors and potential outcomes; specifically, we lay out three broad possible scenarios for the economy. Of course, there are myriad imaginable outcomes and we continue to incorporate new evidence into our models; however, the three broad scenarios outlined here form a starting point for further analysis.