Meredith Whitney shows up on CNBC and it isn't a surprise when she spreads her doom and gloom. While she may end up being correct and her predictions become 100% true, I don't think anyone is asking her the right questions.
We know what she is going to say. She's been saying it for the past four years. The past 12-18 months have actually been good for banks while she continues to have sell and hold ratings across the board. She hasn't been right lately, and who knows, she may be right in the future. The question no one is asking is: "what will it take for you to become a bull on financials, Meredith?"
I think this is an extremely important question to ask someone who has been a long time bull or bear because you learn more about the person's thinking than anything else. CNBC won't ask this question, because with the Europe debt problems, Meredith is on TV to throw some more fear into the mix. If she begins to rattle off a huge list of things she needs to become bullish, then we're likely dealing with someone who will never change their mind.
In reality, banks are doing okay and have some positive trends going for them. Almost 0% interest rates and much stronger balance sheets just to name a few. However, there are still risks out there and things can change rapidly. Ultimately, I think you're going to get better advice from someone who considers both sides of the equation. And I don't believe that's what Meredith is offering.
http://www.cnbc.com/id/37195213
Bloomberg article on how her calls haven't panned out as well lately:
ReplyDeletehttp://www.bloomberg.com/news/2010-10-06/whitney-falters-in-trying-to-repeat-success-of-citigroup-call.html