Bullmarket? Lets take a look at European Banks!

Hello everyone!

Posted this post also in another sub but it is all about the stock market. So you guys may be interested too.

I've looked this monday into the European banks. At this day the European banks lost quitte a bit of value due to the drop of the Turkish lira. Before this drop the banks didn't perform well either. In the next document you can find a small investigation about the European banks. I've mainly looked towards the high dividend yields and the market.

My English is not my native language and I am not a great writer too. I am sorry if there are many mistakes.

While doing this research I had a bit of trouble making the investigation complete. The banking sector is a pretty huge one with lots of rules, risks and politics. The investigation is not really complete due to limited time and resources. I maybe am going to finish it further. But I feel now is a good moment to discuss European Banks.

Click here for my document about European banks

Click here for the Stoxx Banks Indices

What I want to know from you guys are the next points.

• What do you think about the (European) banking sector right now?
• Are the European banks valued attractively right now?
• Should the European Banking sector be avoided because of high risks?
• Do you think banks can compete against technologic disruptive forces?
• Do you know more about the southern banks like BBVA and SAN? (Their stock prices are even below the stock prices of 2009)
• …

I haven't added a conclusion in my research yet because I feel it is not complete. My opinion about European banks is positive for the long term. I believe the low stock prices of the banks are a good way to hedge you're portfolio against the high valued tech companies. The banking sector will not become a fast growing sector so you shouldn't expect fast money for it. Banks shall stay around for a long long time though.

They invest in fintech to protect them from a disruptive future. They have more money than fintech companies alone. which makes them able to stay smart. Cryptocurrencies aren't forming a real threat with the new instant payment systems. Furthermore banks have more money and knowledge to compete against the cryptocurrency.

Tech companies like Facebook Amazon and Google can add banking activities. This would be a huge disruptive factor in the sector. But it is a pretty huge expensive and unlogic step for these companies. The bankingsector is hard to join because of the many rules banks are given. These companies need to create a lot of risks for the licenses and capital reserves etc joining a high competitive world with many huge players already in. If they succeed they become massive datamachines. Knowing everything about a person. These companies are already sensitive with their privacy policies, which will increase after adding banking information.

Banks do have high risks. Bad economic events can bring the banks stock prices down further. The banks have a high dividend yield so you still have some dividend for compensation.

Looking at the Stoxx banking index you see European Banks is already down more than 20% from it's high this year. The European banks only increased 66% after the big drop in 2009.

This is a high difference with the Europe 50 index which grew up to more than 160% after 2009.

So what do you think about European Banks?

Submitted August 15, 2018 at 08:50AM by Friendmann https://ift.tt/2Pbk5SI