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I am trying to decide on a stock to add to a Roth IRA account. I have got my bank/mortgage stocks down to 4 right now. I have sifted through a bunch of them and am trying to make a final decision. I have no idea how to decide. All of them seem really good. I plan to purchase shares through sharebuilder so the fees are not a consideration in my choosing of the stock. The four stocks I am trying to choose between are Fannie Mae, Bank of New York, Mellon & Wells and Fargo. All stocks have performed very well in the past and their dividend yields are also very similar. How should I choose 1 of these when I feel they all have positive outlooks. Flip a bunch of coins???
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BigTimer2,

Check with OB as I think he has a 2 headed canadian coin.

I would compare efficency ratios, or the amount of profit that goes for overhead expenses, aka non interest expense. Many bank struggle with this level of expenses and is a major reason for bank mergers. Poorly managed banks have about 60% effeciency ratios while the best run banks connduct their business leaner and meaner with an efficency ratio of below 50%.

Going forward, higher ratio banks will earn less profit for their shareholders than lower ratio banks on the same dollar revenue. US Bank USB, for example, has a quarterly efficency ratio of between 50.5% and 47.6%. This info is usually found in the quarterly reports.

Hope this helps,

Geo Fisher
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Wow... I sure know now that I have no Idea what I am doing when I search for a company :-) I'll have to start researching that information you gave me and figure out for myself how it makes sense.

Thanks Geo
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George,

Check with OB as I think he has a 2 headed canadian coin.


Actually because of the falling Canadian dollar it's a:

(2 x .64) + 19.3% illegal protectionist tarrif headed coin.

OB
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No. of Recommendations: 16
BigTymer2,

You might want to check out some of the Drip Port columns from March-September 1998. The Drip Port was searching for a financial stock at this time, and since measuring the performance of financial companies is different than researching most other companies, they went into great detail as to what you should look for when choosing a financial company to invest in.

I ended up printing out each column from the entire series to look at for reference when I start researching financial stocks soon to add one to my drip portfolio.

myadidas
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What series did you print information off from? I spent over an hour looking for anything to do with financial stocks during that period and came up with nothing. Please please please let me know where you found it. Dates, topics, etc.

Thanks
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No. of Recommendations: 2
BigTymer2,

Just below the folders/best of/favorites&replies is a search engine. I typed in mellon, since Mellon was discussed and eventually bought. After searching it came up with a bunch of stuff from this board and also gave me the choice to narrow down the search--in the top left part of the screen it says Search: Just drip basics board for Mellon---
Use the scroll down arrow and ask it to search only Fool Articles-- Then look down to choice #8-Drip archives--you can access all old drip articles from here. They discussed financial stocks in 1998, so you'll find what you are lokking for there, I think.
I also included the link-




http://www.fool.com/dripport/1998/dripport1998.htm

There is probably a better way--maybe just search all drip report archives, but that's how I did it.
Hope this helps
David
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No. of Recommendations: 15
What series did you print information off from? I spent over an hour looking for anything to do with financial stocks during that period and came up with nothing. Please please please let me know where
you found it. Dates, topics, etc.

Thanks

*****************

You can start checking the Drip Port archives from March 10, 1998--in this article they announced the financial stocks they were going to study. Most of the articles from March 10th through September 16th, 1998 were for financial stocks--you can check the article title for articles between these dates to determine if there was article regarding something else. Hope this helps.

myadidas
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