I think there was a lot of fear that the Schwab story would collapse with the softer banking performance and lower income. That spooked a lot of people (algorithms?) and the price saw a decent decline. 🤷
The story may indeed be less compelling than it could have been. There are other stories that could perhaps outshine Schwab's - Ameriprise, Amazon, Kinsale, Visa/MasterCard, etc.
I also bought in through the bottoming of the banking crisis in 2023. A little bit at a time, over time, until the plate was full so to speak. With dividends reinvested I feel like I am sitting pretty and doing OK. However, if I see a -20% drop elsewhere like Berkshire or something wild like that, then I may rotate out slowly. I'm not married to Schwab, so we'll see. 🤔
In the meantime, Schwab isn't going anywhere. It's fine. Go enjoy the outdoors, a podcast, or go read something on CQ in the meantime. 😀
I think Schwab was a baby thrown out with the bath water in March of last year. The issue now is the rising interest rates, and Schwab having a lot of their investments in long-dated, lower yielding bonds. Management has said all along that 2024 would be a transition year. I really like the management team at Schwab. I think they’re straightforward and long-term thinkers. They don’t seem to care much about the stock price in the short term - all good things. Most investors are looking for returns right now. Schwab is a business that’s probably not going to give you a 100% return in a year, but it very well could grow at an attractive rate for decades.
Yes, totally agree with Schwab being the baby throw out with the bath water. 👶🛁
A lot of banks were dealt with in the same way during the period. It made for some interesting opportunities.
Comerica, ticker symbol CMA, was another bank that got thrashed during this time. They were hit with the same worries due to their potential paper losses, possible decline in deposits, etc. But, when you look at their presentation and finances they were well capitalized with plenty of deposits. Being small, they are exempt from the Basel III requirements but if they weren't they would have no problem meeting them. Loans were being made across a variety of industries. Interest income was generated. There was no run on the bank. 🤷
Comerica is a "small" regional bank and I remember seeing almost every day during my time as a student at San Jose State University. My college job was not too far from it. The building was tall with the Comerica logo proudly displayed up top. I'm not sure if this Google Maps link will work, but this what I saw 30 years ago.
Comerica is a bank that simply keeps on banking. And now, with dividends being reinvested, my yield on cost is ~7%. In some ways, I kind of hope the market will continue throwing more babies out with the bath water! 😳 Don't worry, we'll be there to catch them! ❣️
Well done, Mr. Terwilliger! 👍
I think there was a lot of fear that the Schwab story would collapse with the softer banking performance and lower income. That spooked a lot of people (algorithms?) and the price saw a decent decline. 🤷
The story may indeed be less compelling than it could have been. There are other stories that could perhaps outshine Schwab's - Ameriprise, Amazon, Kinsale, Visa/MasterCard, etc.
I also bought in through the bottoming of the banking crisis in 2023. A little bit at a time, over time, until the plate was full so to speak. With dividends reinvested I feel like I am sitting pretty and doing OK. However, if I see a -20% drop elsewhere like Berkshire or something wild like that, then I may rotate out slowly. I'm not married to Schwab, so we'll see. 🤔
In the meantime, Schwab isn't going anywhere. It's fine. Go enjoy the outdoors, a podcast, or go read something on CQ in the meantime. 😀
I think Schwab was a baby thrown out with the bath water in March of last year. The issue now is the rising interest rates, and Schwab having a lot of their investments in long-dated, lower yielding bonds. Management has said all along that 2024 would be a transition year. I really like the management team at Schwab. I think they’re straightforward and long-term thinkers. They don’t seem to care much about the stock price in the short term - all good things. Most investors are looking for returns right now. Schwab is a business that’s probably not going to give you a 100% return in a year, but it very well could grow at an attractive rate for decades.
Yes, totally agree with Schwab being the baby throw out with the bath water. 👶🛁
A lot of banks were dealt with in the same way during the period. It made for some interesting opportunities.
Comerica, ticker symbol CMA, was another bank that got thrashed during this time. They were hit with the same worries due to their potential paper losses, possible decline in deposits, etc. But, when you look at their presentation and finances they were well capitalized with plenty of deposits. Being small, they are exempt from the Basel III requirements but if they weren't they would have no problem meeting them. Loans were being made across a variety of industries. Interest income was generated. There was no run on the bank. 🤷
Comerica is a "small" regional bank and I remember seeing almost every day during my time as a student at San Jose State University. My college job was not too far from it. The building was tall with the Comerica logo proudly displayed up top. I'm not sure if this Google Maps link will work, but this what I saw 30 years ago.
https://www.google.com/maps/@37.3333003,-121.8951494,127a,35y,305.18h,45t/data=!3m1!1e3?entry=ttu&g_ep=EgoyMDI0MDkwNC4wIKXMDSoASAFQAw%3D%3D
Comerica is a bank that simply keeps on banking. And now, with dividends being reinvested, my yield on cost is ~7%. In some ways, I kind of hope the market will continue throwing more babies out with the bath water! 😳 Don't worry, we'll be there to catch them! ❣️