Thursday's Wild Financial Stocks

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

If you own financial stocks, I'm sure you're going to want to sit down, grab a glass of ice water, and perhaps rethink your tolerance for risk. Yesterday was one of the wildest days for financial stocks in quite a while.

While one-day movements mean absolutely nothing for the long-term investor, poking fun at how much of a whack-a-mole game the stock market can be from time to time rarely gets old.

Between talk of a Lehman Brothers buyout to renewed anxiety over the fate of Washington Mutual, financial stocks were all over the board yesterday. A late-day rally brought much of the carnage under control, but the peak-to-trough differences by the end of the day are pretty amazing. Take a look at these notables:


Thursday Peak-to-Trough Range


Washington Mutual (NYSE: WM  )



Lehman Brothers (NYSE: LEH  )









Wachovia (NYSE: WB  )



JPMorgan Chase (NYSE: JPM  )



Bank of America (NYSE: BAC  )



*Source: Google Finance

The only way you can interpret that much volatility -- a lot of which came on virtually no significant news -- is to recognize that no one has much of a clue what the future has in store for financials. The amount of important information that's completely unknown right now -- what exactly lies inside structured finance products, how those products are being accounted for, and how much further assets will fall -- is a complete mystery to even the savviest of investors.

What's an investor to do under these circumstances? Unless you're prepared for insane volatility and have a stomach for risk, your best bet is to steer clear of financials for the time being. True, some big banks have remained largely removed from the bulk of the credit crunch and could make great investments at these prices, but navigate these waters at your own risk. There's a big difference between being a contrarian and running headfirst into a vicious storm.

For related Foolishness:

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article, thank goodness. JPMorgan Chase and Bank of America are Motley Fool Income Investor recommendations. The Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 726467, ~/Articles/ArticleHandler.aspx, 10/26/2016 5:15:49 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,199.33 30.06 0.17%
S&P 500 2,139.43 -3.73 -0.17%
NASD 5,250.27 -33.13 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
WAMUQ.DL $0.00 Down +0.00 +0.00%
Washington Mutual,… CAPS Rating: No stars
AIG $61.11 Up +0.56 +0.92%
American Internati… CAPS Rating: ***
BAC $16.87 Up +0.15 +0.90%
Bank of America CAPS Rating: ****
JPM $69.13 Up +0.33 +0.48%
JPMorgan Chase CAPS Rating: ****
LEH $0.13 Down +0.00 +0.00%
Lehman Brothers Ho… CAPS Rating: *
MBI $7.97 Down -0.23 -2.80%
MBIA CAPS Rating: **
WB.DL2 $5.54 Down +0.00 +0.00%
Wachovia Corp CAPS Rating: **