David Einhorn has a nice description of banks: hedge funds with limited upside for the investors (a capped profit margin where any profit beyond the upper limit goes to traders/bankers)
Hey Masoud, that's an interesting take. I think of banks more as a channel for general economic activity (as opposed to hedge funds, which are purely investment vehicles). And yeah, banks definitely do have limited upside, but I think the strongest ones have limited downside as well, since they're so critical for helping modern economies function. It's an interesting business model; I'm still working on understanding it!
@@stockstoryteller it is indeed very interesting to learn more and more about financial institutions. At the end though it seems impossible to analyze a bank with a high confidence level 😁
David Einhorn has a nice description of banks: hedge funds with limited upside for the investors (a capped profit margin where any profit beyond the upper limit goes to traders/bankers)
Hey Masoud, that's an interesting take. I think of banks more as a channel for general economic activity (as opposed to hedge funds, which are purely investment vehicles). And yeah, banks definitely do have limited upside, but I think the strongest ones have limited downside as well, since they're so critical for helping modern economies function. It's an interesting business model; I'm still working on understanding it!
@@stockstoryteller it is indeed very interesting to learn more and more about financial institutions. At the end though it seems impossible to analyze a bank with a high confidence level 😁
@@stockstorytellerI’d agree with you both.