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Buy on Weakness, but 'Very Selectively': Alan Lancz

Friday, 7 May 2010 | 3:04 PM ET

How quickly will the European sovereign debt crisis affect U.S. banks and what should investors to protect their portfolios? Paul Miller, group head of financial services at FBR Capital Markets, and Alan Lancz, president at Alan B. Lancz & Associates, shared their insights.

Fear & Financials
Financials taking part in yesterday's sell-off, with Alan Lancz, Alan B. Lancz & Associates and Paul Miller, FBR Capital Markets Group.

“American banks don’t have a lot of exposure to the sovereign debt," Miller told CNBC.

"They do have exposure to these sovereign banks out there, but not that extensively."

Miller said the big problem is the overall influence of the European credit markets freezing up, which might eventually start to creep into the U.S.

In the meantime, Lancz said yesterday’s extreme market selloff was a “big blow” to investor confidence.

“The majority of the earnings growth is based on the financial sector and if financial regulatory reform changes the playing field, then it’s going to strike at the heart of the most lucrative segments."

"These analysts are going to have to change the earnings model and then all of a sudden, the U.S. stock market doesn’t look as cheap as before,” he said.

Lancz recommended that investors buy on weakness, but “very selectively.”

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Top Financials:

Goldman Sachs

Citigroup

Morgan Stanley

JPMorgan

Bank of America

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Disclosures:

No immediate information was available for Lancz or Miller.

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Disclaimer

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