I will be conducting a live training session on banks this Thursday at 8:30pm.
In this live training session on Thursday, I will be covering:
- The most important financial metrics when it comes to analyzing Banks
- Why management is the most important but yet under-looked factor
- Why I avoid Chinese banks despite their 6%+ yields
- Whether Singapore Banks (DBS, UOB & OCBC) are undervalued today
- How to generate returns in excess of 10% to 15% by investing in Banks when they are undervalued
Strong financial banks that are temporarily undervalued are one of my favorite investments and fit into the category of “Growth at a Reasonable Price aka GARP” type investments.
Warren Buffett is a big fan of holding banks.
As of June 30, four of Berkshire’s top 10 stockholdings were financial banks: Bank of America Corp , Wells Fargo & Co, U.S. Bancorp and JPMorgan Chase & Co. Berkshire is the biggest shareholder in all but JPMorgan.
Even if you don’t own banks directly, the chances are extremely high that you own them indirectly as they represent a significant proportion of most market indexes. In other words, if you own a Singapore Index Fund or Unit Trust, you already have significant exposure to it.
Quality Matters When It Comes to Banks
That being said, banks are not easy to understand given their unique business model. Simply buying “undervalued banks” has led to disastrous outcomes. Look no further than investors who had pumped in money into US banks in 2007/2008 only to see the vast majority of their investments evaporate.
Banks regionally (Singapore, Hong Kong & China) have traded at multi-year valuations as of late which is unsurprising given the poor sentiment from the overhang of the trade war between the US and China.
I recently made free one of our case studies on Bank of China (Hong Kong) which you can check out here:
[Video Case Study] Is Bank of China (HK) Undervalued at +5% Yield?
Generally, valuations for banks regionally in Asia and China are undemanding with dividend yields ranging from 4% to 6% depending on the country you are looking at.
Join us on our live training to find out more!
PS: If you want to learn more about GARP (Growth at a Reasonable Price) type investment in banks in Hong Kong & Singapore that can generate returns of 10-15% per annum, check out our new course Bulletproof Value Investing.
I will be doing a Q & A for the course at the end of the webinar to answer any of your questions about it.
