After being regulated and fined up one side and down the other the banking industry would rather cut their losses. On the investment side the likes of Goldman Sachs (GS) is rumored to be dismantling their dark pool and trading desks across the big banks are dwindling at a rapid pace.
If you must invest, and Najarian isn’t so hot on the idea, he says “Goldman is one I’d take a good strong look at but the best of all of them has to be Morgan Stanley (MS). Again, not really a bank but...the fact that they’ve got the [brokerage arm] will make up for the lack of trading volume on their old trading desk that’s getting smaller by the day.
Still, rather than jumping into the sector now Najarian is waiting for a rising interest rate environment which he contends will be a boon for banks. “I don’t believe it will happen even well into 2015,” he says. “About a year from now, that’s when I look for rates to be going up. In the meantime they’re not a no touch but I don’t really want any of these in my portfolio outside of Wells and some of the regionals.
When asked about JP Morgan (JPM), Najarian notes that while chief Jamie Dimon is surrounded by talented lieutenants, he’s a little gun shy until a successor is actually named, though he was careful to point out he hopes JP Morgan remains Dimon’s domain for many years to come.