Financials

The financial sector is the 2nd biggest sector in the SPX. I am not sure if I am fighting the last war though when trying to avoid it as the circle of competence does not include any of it. I lived through the 2008 and it seems everything can dissappear even if it's not your fault. The leverage is always necessary making the quality of earnings low. Then again, CM's two biggest positions at Daily Journal was BAC and WFC. The sub-categories I would brand financials into are Big banks: BAC, WFC, C, ALLY, Credit Cards/Payment Processsors/Fintech: V, MA, SYF, AXP, COP, DFS, PYPL, FISV, GPN, FOUR, Insurance divided into PC, reinsurance, specialty insurance, diversified into life/annuity, It is too hard to understand all the risks it has with its mismatching of assets/liabilities of borrowing long and lending short, counterparty risks, and unknown unknowns.