Are the banks a buy or due for a dumping?

Founder and Publisher of the Switzer Super Report
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The question I get asked all the time is: “Should I stick with the banks?” And so today I’ll give you my best guess ahead of the CBA reporting on Wednesday (see James’ article today for more analysis of that). Of course, I’m not expecting the country’s biggest bank to report brilliantly, but it could be unwise to use short-term analysis to assess the future share price movements of our big banks.

In case you’ve missed it, the smart guys, like Magellan’s Hamish Douglas, have argued that the old Oz bank model has a “limited half-life.” He thinks the challenges of the hi-tech, digital world will mean the basis upon which banks have built their profits and share prices will gradually change and work against them.

And all of us have to be worried that the backwash from the Royal Commission, which has led to banks either dropping or changing their links to their financial planning and insurance operations, must eventually hurt profits and, in turn, share prices.

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