Investors Can Gain from European Banks’ Pain

The sentiment on European bank shares has hit a low, enabling investors to buy them at steep discounts

by Michael Brush
Market Watch

One of my favorite contrarian signals for investing is the “magazine-cover indicator,” and last week The Economist issued a doozy.

It trashed Italian banks under a magazine cover portraying a bus sporting Italy’s colors, teetering on the edge of a cliff. (How original.)

The Economist is always a little too harsh on Italy. But even discounting for that, the analysis of Italian banks and how rotten and risky they are — and, by extension, the country — was just savage.

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