On bank share price continuing to fall - the feds new facility is supposed to run until March 13, 2023. Basically gives these banks a year to get their house in order. Many will need to issue new equity as their HTM still exceeds equity. I suspect the market has sniffed this out. If long bond treasury yields fall a bunch(below 2%), and deposit runs stop these banks could do very well.
SCHW has a very different issue then BAC + FRC - watching that one closely.
Be the person you want to be :)
I personally swing both long and short. Going short is super boring 4sure. Pick from a long list of names still trading at bubble prices, short them when people think we are in a bull market again, cover when the world is ending, and repeat. We don't participate in shorting companies to 0 for a variety of reasons.
I think in probabilities both directions so don't find it impacts me much as an individual. I do get super excited about great ideas, company's and management and annoyed by having to wait 6-18 more months to buy them :) Being short just provides more capital to own more great names. There are some small caps we may accumulate board size positions in and help out. I'm hoping the capital we accumulate in this stage of the cycle might be operationally useful some day.
I'm also hoping the information we share, while sometimes unpleasant, helps people.
Note: If you are worried about infinite downside risk, check out ITM puts. We use those a lot to limit exposure.
On bank share price continuing to fall - the feds new facility is supposed to run until March 13, 2023. Basically gives these banks a year to get their house in order. Many will need to issue new equity as their HTM still exceeds equity. I suspect the market has sniffed this out. If long bond treasury yields fall a bunch(below 2%), and deposit runs stop these banks could do very well.
SCHW has a very different issue then BAC + FRC - watching that one closely.
Be the person you want to be :)
I personally swing both long and short. Going short is super boring 4sure. Pick from a long list of names still trading at bubble prices, short them when people think we are in a bull market again, cover when the world is ending, and repeat. We don't participate in shorting companies to 0 for a variety of reasons.
I think in probabilities both directions so don't find it impacts me much as an individual. I do get super excited about great ideas, company's and management and annoyed by having to wait 6-18 more months to buy them :) Being short just provides more capital to own more great names. There are some small caps we may accumulate board size positions in and help out. I'm hoping the capital we accumulate in this stage of the cycle might be operationally useful some day.
I'm also hoping the information we share, while sometimes unpleasant, helps people.
Note: If you are worried about infinite downside risk, check out ITM puts. We use those a lot to limit exposure.