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The big "money center" banks are at the pinnacle of the U.S. and global economies. Like sleeping next to an elephant, every single little move they make has an outsized impact on every dollar you own. No investor can afford to ignore what they're doing, lest they end up on the wrong side of a gigantic capital wave.
The regionals - banks with presence in five, 10, or more states - are different. They're important, don't get me wrong, but I watch them like a hawk for the same reason I listen to the results of my annual physicals: to make sure everything's working right, and nothing disastrous is looming out there.
That's because, as the history of the financial crisis clearly tells us, regional banks are where you find the very first signs of the kind of gross stupidity and borderline criminal behavior that can spread to the money centers.
It's like "monkey see, monkey do," except the sequence runs, "little monkey do, big monkey see, global economy gets knocked for a loop."
And the regionals' earnings calls are where the first indications of this show up. That's why I never miss one...
About the Author
Tim Melvin is an unlikely investment expert by any measure. Raised in the "projects" of Baltimore by a single mother, he never attended college and started out as a door-to-door vacuum salesman. But he knew the real money was in the stock market, so he set sights on investing - and by sheer force of determination, he eventually became a financial advisor to millionaires. Today, after 30 years of managing money for some of the wealthiest people in the world, he draws on his experience to help investors find "unreasonably good" bargain stocks, multiply profits, and build their nest eggs. Tim tirelessly works to find overlooked "hidden gems" in the stock market, drawing on the research of legendary investors like Benjamin Graham, Walter Schloss, and Marty Whitman. He has written and lectured extensively on the markets, with work appearing on Benzinga, Real Money, Daily Speculations, and more. He has published several books in the "Little Book of" Investment Series and a "Junior Chamber Course" geared towards young adults that teaches Graham's principles and techniques to a new generation of investors. Today, he serves as the Special Situations Strategist at Money Morning and the editor of Peak Yield Investor.