Hold or Short, You Cannot Lose in the Investment Services Industry
You are not alone. It is normal to be in awe of giants in the Investment Services industry. These corporations pay enormous sums to celebrity alumni of top Business Management schools. Even governments listen to them. They know it all, from the state of the economy downwards. Then there is the sub-prime story. Some of their executives have been naughty. They have left with golden handshakes. The stock market holds its collective breath in the meantime. What further bad news can we expect about undisclosed losses tomorrow?
Shorting seems to be a favorite for Financial Sector stocks. Just wager a small bet that new instances of rank bad management will come to light. Pick up discounted stocks on or near the due date and deliver to pocket a small fortune. Your conscience may hurt at the thought of making cash from distress. Your broker will not complain. Besides, you can always donate some of the killings.
It is also a bad eggs or rotten fruit story. The Investment Services industry has a wealth of executive talent. Not all of them are negligent. They have reserves to meet obligations and to rebuild their assets and revenue streams. Inherent stock values are probably much better than what the stock market thinks of them today. They will eventually welcome such stocks back in portfolios like indulgent parents. No economy can flourish without a vibrant and professional Financial Sector. Therefore, holding is as profitable as shorting, though not in the same time frame.
You can troll any industry to find top stock picks. It is the same with Financial Services. The trick is to analyze business performance rationally, rather than to go by image and branding emotionally.