Keeping the faith on bank stocks

It's easy to be a naysayer when it comes to bank stocks, but there are plenty of reasons to be optimistic.

By Jim Cramer May 19, 2010 10:36AM

TheStreet's Jim CramerWhen you say something positive and it doesn't work out immediately, you get an "I told you so."

 

I have been advocating that when the smoke clears, the pain for the major banks -- Well Fargo (WFC), Bank of America (BAC), JPMorgan Chase (JPM) and Morgan Stanley (MS) -- will not only be bearable but will create buying. I exclude Goldman Sachs (GS) because it’s clear that both the Senate and President Obama are not going to rest until this firm is stripped of much of its greatness.

 

So what happens? At every turn of every potential pitfall, I get emails from people saying, "I told you so."

 

I said that I liked Citigroup (C) even though the shares are going to go down because of the sloppy sale of the government’s stake. Every time it goes down, I am ridiculed for liking it.

I have said that the American banks don't have all that much exposure to European banks, but every time I say that and they tick lower, I am presumed to be wrong and I am flamed.

 

Is it any wonder I have adopted this doppelganger approach, saying everything is bad for the banks -- everything -- and that the financial regulations finally will destroy their earnings power?

 

Why not say it? Who’s going to argue with me? I don't know any investors who are bullish on the banks. It’s easier for a commenter to say, "It will destroy the banks" and even if it doesn't, just say it again. It is the safe way. It is not the gutsy way. It is not what my homework says.

 

When the ink is dry on the financial regulations, I think that the big bad event will be over and the stocks will gain. But why say that? Why write that? To be RIGHT? To RISK being right?

 

It has simply become impossible and worthless to say anything good about this group, to opine that it could have a big rally. It simply isn't worth my time or energy to make the case.

 

I’m not going to buck it and risk ridicule EVEN IF I THINK IT IS RIGHT. I want to be like everyone else for awhile.

 

It is comfortable not to stick my neck out, even when I think it can make you money.

 

At the time of publication, Cramer was long Bank of America, Goldman Sachs and JPMorgan.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.


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