Buying financial stocks is like “buying a lottery ticket”—nothing has changed in the industry and there’s still no transparency, according to Ronald Carson, CEO and founder of Carson Wealth Management.
“There were some loopholes that were closed [from the financial regulation bill] but...those who were responsible for the disaster are still in charge, so they are going to continue to not play by the rules and look for loopholes,” Carson told CNBC.
“It’s a sector without any visibility or transparency and one to stay away from,” he continued, adding that he would be selling Citi .
In the meantime, Anton Schutz, portfolio manager and president of Mendon Capital, said that while transparency is not going to be fully attainable, most banks have raised billions of dollars in fresh capital and have “mountains” of reserves and excess capital.
“Many of these companies can’t grow anymore, and so they’re going take that excess capital and give it to shareholders,” he explained. “So we’re going to see dividends reinstated and we’re going to see buybacks coming.”
Schutz said companies such as JPMorgan and State Street are likely to benefit the most ahead of a possible dividend hike.
Scorecard—What They Said:
- Carson's Previous Appearance on CNBC (Feb. 24, 2011)
- Schutz's Previous Appearance on CNBC (Jan. 14, 2011)
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- 7 Stocks for This Value Market: Pros
- Large Caps Will Beat Small Caps as Rally Goes On: Pro
CNBC Data Pages:
Where Other Financials Stand:
Bank of America
No immediate information was available for Carson or Schutz.