The Bank Portfolio I’d Build Right Now if I Wanted to Beat the Market

A dive into banks. All banks. And nothing but banks.

Hey friends. Happy Saturday and great morning.

Going to go back to bank basics today. Have had a bunch of people asking me and had some very kind folks on X say that I am the some kind of great at bank investing, which I can assure you is not true. I have some tremendously smart friends that I’ve been blessed to have learned from. I have failed miserably investing in banks (not so much anymore) and am constantly tinkering and learning.

In this one you’ll learn thoughts on building a bullet proof bank portfolio by examining a few level potential scenarios for banks, the stocks that are best positioned for these scenarios, and set ups going forward.

But back to the article. On the streaming radio the other day I heard a song I love and the chorus goes …

The waiting is the hardest part
Every day you see one more card
You take it on faith, you take it to the heart
The waiting is the hardest part

Tom Petty fans will recognize this verse real well & he sang it like a truth most people only admit in private.

You can learn a lot about markets from that line.

The Waiting wasn’t a lightning bolt. It was a grind. Petty had the chorus locked in for months, just spinning in his head. The line came from something Janis Joplin once said, “I love being onstage, and everything else is just waiting.” That stuck. Years later, caught in a brutal standoff with his record label over creative control, it bubbled back up.

He understood it now. He had the hook. But the rest? That took time. In his words:
“I had a really good chorus, and I had to work backwards from the chorus. So that’s always hard. But I was really determined that I was going to get it. And I got it. It just took me a long time.”

Because sometimes you have to live it to finish it. That stall. That tension. That limbo where you’re close to something big, but time won’t budge.

That’s the part that breaks people.

Petty turned that one into one of the greatest hits of all time, and this kind of sums up how I’ve felt about banks lately. You have a long term thesis, but you have to wait for it to be the right time to play out.

Bet you didn’t see that one coming!

The Things The Bank Stock Rally is Waiting On, Which is … The Hardest Part

Banks are indeed stuck in a Tom Petty like hard part. And a few things need to resolve themselves for them to rally. Valuations are not awful, but not on fire. Regionals stuck around 9 and change times forwards. And that’s again because we’re stuck waiting for some things to resolve themselves.

The first thing it needs is for the Trump tariffs to go away. That alone would lift a huge weight. Investors know they’re inflationary and smart people are starting to point out the obvious. Trump is cornered. He can’t run a campaign on inflation and keep tariffs that raise prices. Once those ease, it opens the door for M&A and deregulation to flow again. That’s when banks get their rerating.