US Investment Banks: Friends Don’t Let Friends Buy Levered Cyclicals When The Economy is Booming
My thoughts on investment banks, operating leverage, cyclicality, and managing risk.
Nearly every investment bank in the U.S. just printed record revenues, and the group is all priced around 15-22x next year’s earnings.
But the question really is, should you be buying investment banking stocks this deep into a revenue and earnings boom and at these prices? I’m not, but you’re more than welcome to. People that know me would tell you I’m better than most within financials, and this comes not from arrogance or hubris, but from making countless little bad decisions that accrued into my stubborn brain as wisdom.
As for investment banking stocks the economy is good, deals are flowing, and optimism is high. Technically speaking the charts also look good. They’re incredibly hard to short in good times because you end up playing a time the recession game, but reading this should give you some breadcrumbs to follow if you’re one of the institutional types following.
Subscriber essay
The rest of this essay opens here on September 26, 2026.
Members read the research behind it in the Terminal today.
Open the TerminalThe research behind essays like this one lives in the Terminal: open Research. 107+ companies and counting.