In short: One of the three names he cites as "starting to push higher, breakout and make good headway" in the last year — the later, broader phase of the bank recovery behind the initial investment-bank leadership.
BNY Mellon is a custody bank — it safeguards and administers other institutions' securities and holds very large cash balances on their behalf. That makes it unusually sensitive to interest rates: higher short-term rates earn more on the cash it holds, and a steeper curve helps its securities portfolio.
Newton groups it with Bank of America and Citigroup as names that have started "to push higher, breakout and make good headway" over the past year — the second, broader phase of the financials move after the investment banks led.
22:50Initially, it was more of the capital markets, the investment banks, the Goldman Sachs and the Morgan Stanleys. But just in the last year we've seen more evidence of Bank of America and Bank of New York and Citigroup starting to push higher breakout and make good headway. So, I'm very encouraged actually about the financial sector.
In short: Mailbag answer: "I have to confess that I have never paid that much attention. Bank of New York and State Street are trust banks and operate in a world all their own. I have never found that much value to focusing on them." It's up over 30% this year, "but you could get the same performance by buying just about any other of the large cap banks."
BNY Mellon is a "trust bank" — instead of lending to consumers and companies, it holds and administers other institutions' securities, settles trades and keeps the records. That makes it a fee business tied to asset levels and transaction volumes, not a credit business.
Eisman's honest answer to the mailbag is that he has never studied it: trust banks "operate in a world all their own" and he's "never found that much value to focusing on them." It has done well — up over 30% this year — but so has every large bank, so "you could get the same performance by buying just about any other of the large cap banks." No edge, so no view.
17:44Thanks in advance." With respect to Bank of New York, I have to confess that I have never paid that much attention. Bank of New York and State Street are trust banks and operate in a world all their own. I have never found that much value to focusing on them. Like every other large bank, Bank of New York has done well.
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