ITUB at good prices - Part 2!
Hello Investor,
Everybody who follows the market knows that the financial sector (as the energy too) is suffering a lot this year. We see the XLF underperforming the SPX with a big spread.
So, in Brazil is not different. If you open a chart to compare IFNC (our financial index) to IBOV, you can see a significant spread too. But, in Brazil the banks and the financial sector have more weight to IBOV that the XLF has to SPX. That's why that spread has a huge importance. In our recent history, the financial sector have been crucial to a good Brazilian Market performing.
However, nowadays the banks stock prices is an absurd, especially in USD. Obviously, the banks valuation will be affected by this crisis with tons of defaulters, very low interest rates and specifically in Brazil, we have fintechs revolution that can affect the banks margins at their financial services.
But, we are seeing the same price that we have in 2008, when the financial sector was in the center of the crisis. In Brazil, the big banks have a lot of market share, they are very good regulated and have a strong financial health.
At this price, it is impossible to ignore the positive risk asymmetry and I'll increase my position in ITUB and BBD betting that will one of my big gains of the next year.
Let's see what gonna happen.
Good Investments,
Lucas Bento Sampaio.
Everybody who follows the market knows that the financial sector (as the energy too) is suffering a lot this year. We see the XLF underperforming the SPX with a big spread.
So, in Brazil is not different. If you open a chart to compare IFNC (our financial index) to IBOV, you can see a significant spread too. But, in Brazil the banks and the financial sector have more weight to IBOV that the XLF has to SPX. That's why that spread has a huge importance. In our recent history, the financial sector have been crucial to a good Brazilian Market performing.
However, nowadays the banks stock prices is an absurd, especially in USD. Obviously, the banks valuation will be affected by this crisis with tons of defaulters, very low interest rates and specifically in Brazil, we have fintechs revolution that can affect the banks margins at their financial services.
But, we are seeing the same price that we have in 2008, when the financial sector was in the center of the crisis. In Brazil, the big banks have a lot of market share, they are very good regulated and have a strong financial health.
At this price, it is impossible to ignore the positive risk asymmetry and I'll increase my position in ITUB and BBD betting that will one of my big gains of the next year.
Let's see what gonna happen.
Good Investments,
Lucas Bento Sampaio.
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