Short-Seller Odey Turns Bullish On Banks

Apr 16 2009 | 1:23am ET

Crispin Odey’s bearish take on British banks last year earned his investors a mint. But while many are dismissing the current market rally, the Odey Asset Management chief says it could be the beginning of a new bull market.

While he acknowledged earlier this year that he was too quick to begin buying bank stocks again, Odey believes that the beating suffered by the financials sector is over, the first sign that the market is ready to rise again, Financial News reports.

“In a little over a month, much has changed,” Odey wrote in his most recent monthly report. “Stock markets have shot up, led by the financials and base material sectors.”

Odey’s own bet on Barclays, Britain’s largest bank, paid off last month, the report says.

“As the story moves from the balance sheet to the earnings potential for the likes of Barclays, the bull market will also extend from its narrow base to encompass other industries where capacity has been sufficiently reduced as to allow pricing power to come through,” he wrote. “Since on my numbers these banks are trading on between two and three times future earnings, two years out, I am not afraid of the volatility in the share price.”

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