Wikinvest Wire
Wednesday, October 20, 2004
Simple, Simple Analysis
I met an old friend of my mine, Steve, for a Starbucks this afternoon. Steve is a wildly successful money manager. We stay in touch from time to time and bounce ideas off of each other. I do a lot of foreign investing so Steve asked what I thought about HSBC Holdings. Coincidently I had an opinion from an article I wrote about European Bank Consolidation that I submitted to the Fool but they did not run. I told him I liked Barclays better because iShares is only 15% of their business and should grow very quickly and it has a better dividend than HSBC. But the thing about HSBC is that while they stand to open a lot of bank accounts in China, I think it will be tough for them to make a good profit on what is likely to be a lot of very small accounts. The idea, whether I'm right or wrong, is very simple. I don't like the answer to that question so that is the end of the work on HSBC. Very simple, no? For disclosure purposes while I like Barclays, there is another UK bank I like more so I do not own Barclays personally or for clients.
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1 comments:
Hi Roger.
Non-negligible advantages of HSBC to consider are its international exposure (not only to China)and excellent management record (in terms of integrations and the financial standard ratios). More domestically exposed UK banks like Barclays or the big divi Lloyds are exposed to what's looking a more and more precarious housing market. Even my favourite HBOS will struggle to cope if housing and gov+trade deficit pigeons come home to roost.
Of course, this all applies only if investors feel a brave compulsion to gain banking exposure in current conditions.
By the way, what's with the restraint regarding the Red Sox result?
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