Bank on Gains in Europe

Published on
August 13th, 2018
Duration
14 minutes

Bank on Gains in Europe

Trade Ideas ·
Featuring Jay Pelosky

Published on: August 13th, 2018 • Duration: 14 minutes

Jay Pelosky, co-founder and CIO of TPW Asset Management, is bullish on Europe, and is especially optimistic about European financials in particular. In this interview with Brian Price, Jay highlights an especially attractive ETF that he says will be driven higher by second-half growth recovery in the region. Filmed on August 9, 2018.

Comments

  • LS
    Lubomir S.
    17 August 2018 @ 16:49
    He didn‘t even mention Turkey & Greece, where EU banks are much exposed
  • RK
    Robert K.
    15 August 2018 @ 09:57
    Agree with the tailwind that will come from the weaker EUR. But given the weak overleveraged countries (EU is not Germany) it is unimaginable that interest rates would rise meaningfully in the EU. The countries like Italy and Greece are not able to come to the market for years. ECB holds 1/3 of government debt issues. Draghi is in the corner. So agree with the idea but we might be far from a catalyst. The risk is that "prestigious" flagship banks like Deutsche (DB) might turn out to be the new Lehmans.
  • SP
    Stephen P.
    14 August 2018 @ 11:05
    I bought puts on EUFN. We’ll see.
  • MS
    Mark S.
    14 August 2018 @ 01:26
    I watched this the day it came out Aug 13. EUFN's price at close 19.87. Mr Pelosky's stop loss was 20.20. According to him, he dumped this trade already.
    • BP
      Brian P. | Real Vision
      14 August 2018 @ 21:33
      Hey Mark--I just spoke with Jay and learned he has not dumped the position. Yes, with current stop-loss, this clearly didn't work out. However, Jay is sticking with it. He'll be back on RV this week to explain why. Of course, we'll also discuss all things Turkey. Be sure to watch!
  • DR
    David R.
    13 August 2018 @ 20:07
    No technical analysis here. Too bad. TA shows most European equities, bonds and the Euro is bearish, altho it's not linear. Sure the euro will dead cat bounce here shortly, perhaps for multiple months even, but choppily in corrective fashion only, before retesting the 1.03-1.05 lows again later - and breaking it.
  • DR
    David R.
    13 August 2018 @ 19:54
    Anyone else aware of the Gavekal research and Camp Kotok think tank analyses which is certain that Trump will be placing a HUUUUGE tariff on everything European this fall, in response to the existing 25% Duty that the EU places on *everything* imported into the EU. That tariff reprieve last month was merely buying time while the US first deals with Nafta, China and Japan.
  • DS
    David S.
    13 August 2018 @ 19:38
    I really liked Mr. Pelosky's Tri Polar World video on RVTV and is certainly worth first or second look. In this trade, I think there is time to wait on this trade and see how the risks and the Euro change. Spanish banks, French banks, and Italian banks alone have approximately $US billion dollar exposures of $80, $40 and $17 on Turkish loans. DLS
  • SH
    Steve H.
    13 August 2018 @ 18:57
    Very few people - sometimes including, in my direct experience, members of senior management - fully understand what's lurking inside bank balance sheets. I recall being laughed at for not wanting to catch a falling knife in US financials throughout 2008; "great value" at these prices, I was told all the way down. I do not believe Mr. Pelosky has a solid grasp on the economic and political challenges facing Europe, and nor does he seem to realise how many financial institutions on the continent are essentially insolvent. Risking a position in these t**ds for a possible 7% return - even at a purported 3:1 reward to risk ratio - is 'courageous' to say the least.
    • DR
      David R.
      13 August 2018 @ 19:59
      European banks are stuffed with European sovereign bonds that pay almost nothing from European governments that are on the brink of defaulting, with ZERO intent or ability of ever paying anything. Those same banks are stuffed with NPL non performing loans. Bad loans + looming sovereign bond defaults on highly levered banks is a blow-up in the making. A failure by any one of those banks, such as Deutsche Bank which is almost imminent, takes down the entire EU banking system within days if not hours or minutes. In which case the Euro cracks & fails, and EU bonds and stocks crash like a stalled aircraft at 40,000 feet. Everyone dies. The end. Read more about Armstrong's work on the looming EU default crisis. It's mathematical certainty. No other path possible. Draghi just hope he gets out before it all blows up in 2019.
  • MT
    Mike T.
    13 August 2018 @ 18:52
    stop loss level already hit, brilliant stuff. I would suggest the only time to be long Europe is if and when one the Banks goes pop, and the ECB bailouts start.
  • MW
    Myron W.
    13 August 2018 @ 18:32
    That didn't take long...
  • Wj
    Will j.
    13 August 2018 @ 17:42
    One way to guarantee that I lose money
  • OG
    Owen G.
    13 August 2018 @ 12:22
    One heck of a contrarian view at the moment. European banks have too much exposure to Turkey. Is Turkey priced in?
  • JM
    Johann M.
    13 August 2018 @ 10:14
    With the Turkey situation, already down beyond the stop loss.......
    • KS
      Karen S.
      13 August 2018 @ 12:58
      Boom and there goes the dynamite.