Mr. Kotowski: I cover the large, national-footprint bank holding companies, as well as the key investment banks and some of the private equity companies. And my area of focus is what I would call wholesale finance.
TWST: Where are we in the economic recovery? How much of the good news we've been hearing about has already been discounted?
Mr. Kotowski: I am pretty bullish on bank stocks and financials in general, and the reason is that I think there is pretty conclusive evidence that asset quality is improving and is likely to continue to improve for some time. Historically, the cycles of asset quality improvement and deterioration usually go a couple of years in either direction and you can never predict too far into the future. But generally asset quality improves for a couple of years and it deteriorates for a couple of years. And I think the mistake investors make, as a general rule of thumb, is either getting off the train too early on the recovery or getting back in too early when the deterioration begins.
Tickers included in this excerpt: BAC, C, JPM, WFC
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