When Congress passed the Dodd-Frank Reform Act earlier this year, a lot of skeptics thought it was like lighting the fuse for the next big blowup.
Look, I understand where the skeptics are coming from. Given enough rope, bankers will inevitably hang themselves in search of an extra percentage point of return. Which would be fine, if their stunts weren't a mortal financial danger to the rest of us, too.
But, I'll show you that just isn't the case. The new law didn't leave them anywhere near enough rope.
There is no one on the planet who keeps a closer eye on bankers than I do. After all, I have a lot of my own money – and more importantly my wife's "I will kill you in your sleep if you lose my money" IRA account – invested in bank stocks.
If I thought for a second that the Dodd-Frank Reform Act would hurt the banking sector, I'd run for the hills.
But it isn't, and knowing how it works could be hugely profitable for you. In fact, I've already found a banking stock primed to surge now that the new law is in place…
Why the Dodd-Frank Reform Act Is Like Rocket Fuel for Regionals
Most of the new law was aimed at making life a little easier for community banks – "regionals" – to survive and grow.
The Gains on This One $10 Stock Alone Could Earn You Enough to Retire – Click Here Now for Details
Rather than unleashing Wall Street's banking behemoths on the world, reform turned Dodd-Frank's 800-pound gorilla into a slightly smaller 700-pound gorilla. Most of the reforms had to do with technical issues and left the restriction on derivatives and trading practice intact.
The big change from the Dodd-Frank Reform Act was raising the "Too Big to Fail" threshold from $50 billion in assets to $250 billion. Banks above the limit face much tighter restrictions and making acquisitions for these banks was pretty much impossible.
Raising the barrier opened up merger and acquisition (M&A) possibilities for the mid-to-large banks and widened their potential takeover target pool substantially.
And, as we've seen, takeovers are unreasonably lucrative events.
In fact, the ink was barely dry on the signed reform bill when the first significant regional bank deal was done.
The bank behind the deal has made me a lot of money in the past, and is one I'm always keeping my eye on.
And thanks to the new law's fairer treatment of regional banks, it's an easy buy right now…
This Is the Best Buy in a Very Strong Sector
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 "Max Wealth" and Heatseekers.