Investing.com - Financial Markets Worldwide
👀 Copy Legendary Investors' Portfolios in One ClickCopy For Free

How Bad Is The News About JPMorgan Chase?

ByCumberland Advisors
AuthorDavid Kotok
Published 05/13/2012, 03:47 AM
Updated 05/14/2017, 06:45 AM
BIG
-
IFNC
-
CCF
-

JP Morgan Chase (JPM) has been the darling stock of the financial markets.  It has now jilted its lover. Scorn by markets will result.

The details of JPM’s loss and revelations fill the news so there is no need to repeat them here.  The big question: is it idiosyncratic or systemic?

Regulation hungry politicians claim system failure.  They have been given an opportunity to do the political “I told you so” dance step.

Analysts debate whether the derivative trading failure limited to JPM only or are their other shoes to drop. This discussion will rage for days.

Meanwhile JPM will trade with a cloud for some time and until revelations are complete. If Jamie Dimon took the largest loss reserve first, he will be restating smaller numbers. Then the markets will quickly resume their love affair with JPM. If there is a subsequent charge against earnings and additional revelations beyond today’s release, the markets will punish JPM and the other large banks.

We remain overweight financials but not the big banks. Our preferred sub-sector has been and is the regional banks. Our largest weight within the financial sector is the regional bank ETF. The symbol is KRE.  We have rebalanced and added to that position several times. We remain fully invested in our US market ETF accounts.

We do not own JPM singly because we only use ETFs. JPM is an example of how an ETF strategy allows an investor to gain diversification within a sector as well as within the broader market.  JPM is a large weight in certain ETFs but it is not the only weight.

Latest comments

Loading next article…
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.