It was widely speculated that when conventional banks began selling stocks that the investment firms were doomed. Likewise when the internet firms kicked in but the traditional brokerage houses are still standing and most are profitable.
When the dust settles those boomers are going to come back into the markets in a big way. What is the alternative? Real estate is dead for a while.
The financial world moves in cycles and this too shall pass.
On to the next bubble!!!
loan loses will continue to accumulate and excelerate into defaults.. Rjf balance sheet will continue to erode..real estate will continue to deleverage over the next 3 years..we may go the route of Japan..either way we are looking at the 70's all over again..deflation..then stagflation..then inflation....if your long..why? there are so many more stocks that would be safer longs..why take the risk??
Why would I be long? Let's see....:
1)they're adding new advisors hand over fist,
2) they're trading at the biggest discount to book value in their history,
3) They have the smartest, most tenured (30+ years at the helm) CEO in the business,
4) They have continued to be profitable every quarter throughout the biggest financial mess since the great depression
5) When you actually dig into the books, they have barely over a billion in commercial real estate and are over-reserving (as their conservative culture always has)
6) All of the residential mortgages that they have are to their clients
7) They have zero toxic structured investments on their books
This is close to the safest financial out there, plus they benefit exponentially when the market goes up...and the market has been on a tear recently...do you have any idea how much their asset management fees increase with every 100 points up in the Dow?
My question to you is, there are so many awful financials out there...why would you ever short one of the best?
I think you need to look a lot closer at the balance sheet before you make a claim like that. Very little long-term risk here...even the most bearish of analysts assume RJF will remain profitable. they're turning down TARP funds and adding advisors like crazy.
read the transcript.
Not saying you might not get a lower price if the market as a whole tumbles, but RJF isn't going to crumble.