First, I sold UCBA last week at $25.65. Time to go. A decent move on my investment, all of which was buyout related. It had sat there for a long time, over a year. The buyout was good for about 35%, so I took the money and ran.
Also, during weakness last week, I did buy some DCOM at 18.05. It traded slightly lower and it did so again in today’s rout. So, anymore weakness can take it down to that level. Near book and near 3% dividend, plus it isn’t small.
Speaking of weakness, today was devastating. Banks were OK, but tech was crunched again. FANGS look completely broken now, which means nowhere to go buy down. This is a revaluation that doesn’t necessarily affect the rest of the market, but big, cutting edge tech should be abandoned with prejudice, IMHO. It’s no one thing: It’s Trump and Amazon, it’s Facebook and the Russians, it’s the trade war, it’s rising inflation. If you notice, some “old tech” looks fine so far. Look at Intel (INTC.) Tech still isn’t my thing, but this just looks a lot like the 2000 collapse of the dot.com stocks. I don’t think Amazon disappears like some dot.com stocks did, but can it be cut in half? Oh, yeah.
Little banks are very American. They do almost no international business. Most of them don’t do any business outside a fair small geographic circle. Thus, they are a true reflection of Main Street, American economic activity, which still seems pretty solid.
Now, we have to watch the trade/tariffs to see if the escalate and start to effect the basic economy. The Chinese import A LOT OF PORK AND A LOT OF SOYBEANS, which are at the heart of the American breadbasket. This could hurt rural banks that lend to farmers, but there is no sign of this yet. Not too many of my banks are THAT rural, but there are a couple.