A Bank Worth Your Money

Focus: STOCKS

Mark Skousen Image Mark Skousen Editor, Forecasts & Strategies, High-Income Alert

Here is a banking stock that is in prime position for a nice move at a good time to take advantage of a rare opportunity in the financials sector, says Mark Skousen of Hedge Fund Trader.

The Federal Reserve is pulling out all the stops to reignite inflation and avert recession. The money supply (M2) is growing at a 9% clip. In the short term, stocks and commodities should benefit, despite the recent sell-off. Corporate earnings are clearly slowly down, hence the Fed’s action.
 
Several commentators have noted that the stock market has not come up during the presidential debates, even though it has doubled under Obama’s reign. In reality, the rally on Wall Street has more to do with Ben Bernanke and the Fed than who is in the White House.
 
How are we doing in Hedge Fund Trader? E-Trade Financial (ETFC) reported worse than expected third-quarter earnings last week, and the stock hit our stop, giving us a slight profit in both the stock and the options. It just goes to show you how important our discipline is in maintaining and raising our stop orders.
 
That gives us profits in nine of our last ten trades. Where to invest the proceeds?
 
Financial institutions are benefiting tremendously from the Fed’s never-ending “quantitative easing” and cheap loans. One bank that is doing is well since the 2008 crisis is Chicago-based PrivateBancorp (PVTB), which caters to the personal banking needs of wealthy business clients and their families.

Founded in 1989 by Ralph Mandell, Private Bank has 34 offices in the Midwest, mostly in Chicago, with $13.3 billion in assets and a healthy wealth management facility.
 
Revenues and earnings are rising rapidly.

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