What do you think?
Rate this book
The Bank Investor's Handbook
Quick! Name an industry that touches people’s lives on an everyday or frequent basis. Perhaps you thought of grocery stores or something sexy like internet retailing, but chances are you didn’t think of banking. Yet, most likely you interact with a bank every time you’re paid and when you pay your bills. Banks facilitate the flow of money through the economy and even if you don’t interact with a bank daily, the businesses you deal with on a daily basis do. For all the interaction people have with banks, few understand how they work or why they work. Even fewer understand why they should consider including bank stocks in their investment portfolio. There are a lot of misconceptions about banks, including understanding what they are and what they do. For many people the word “bank” evokes images of receiving a toaster upon opening an account, or thoughts of security related to the storing of precious items in a safety deposit box. Others might go further and tap their inner Michael Moore and talk about how banks are greedy and evil. It’s our belief that banks aren’t just places to store idle savings (on which you receive virtually nothing in interest) or to cash checks, but that they should be an integral part of an investor’s portfolio. The goal of this book is to provide you with a foundation and framework with which you can both begin to understand banks, but also learn the basic tools used to analyze banks as investments.
200 pages, Kindle Edition
Published December 20, 2017
77 people are currently reading
195 people want to read
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 17 of 17 reviews
February 8, 2020
OK, so this book is not everyone's cup of tea. But if you're an investor looking to understand a bit more about the black box we call a "bank", this book does a good job covering big picture things you probably wouldn't know otherwise, without getting too buried in the weeds. The last two chapters of the book lay out an action plan for how to hone in on that rare undervalued bank stock which has the potential of turning into a gem.
January 3, 2018
Simply put, Nate has done a fantastic job with this book. I have been a long time investor in community banks and Nate does a fantastic job of demystifying the process of finding and investigating small bank stocks. Retail investors who avoid small banks do themselves a serious disservice and this book can help them understand banking and bank stock selection. It helps that Nate has a fantastic sense of humor and it comes through in the writing making this a lot more fun to read than many investing books. If your ultimate goal is to make more money in the stock market you need to read this book. If you have your adult or near-adult kids you really need to buy them this book along with the Acquirers Multiple by Toby Carlise. They will get rich in their lifetimes because of two these books. The Bank Investors handbook is a must read, must own book for investors who are tired of screwing around in the stock market and want to actually make a lot of money investing
May 7, 2018
This could have been way better. Too short, and feels like it is missing Nate's secret sauce as far as investing goes. Don't expect the same level of depth that you get from his blog posts.
June 30, 2021
The book makes a case for why investors should own bank stocks, the basic considerations an investor has to account for when investing in US banks, and some basic strategies.
The balance sheet is the most important part of a bank because, unlike most other companies, a bank makes its money through allocation of the balance sheet. For this reason its important to understand the assets and liabilities of the bank.
The composition and quality of assets determines the profit potential: the types of loans & securities, the borrowers, the maturity profile, and the liquidity. The liability side of the balance sheet is equally important because it can be equated to the means of funding the assets. Deposits are the simplest and cheapest way of funding loans and the higher up the capital structure you go the more costly the means of funding.
Asset liability mismatch is an important risk for bank balance sheets, and so is the risk of borrower default. The section discussing a basic analysis of non-performing loans and defaults was helpful.
The book looks at banks as intermediaries and therefore puts a lot of emphasis on a banks' need to attract deposits in order to fund loans. I am skeptical this it works this way (reserves are only needed if deposits are transferred to other banks, and in that case why can't banks borrow reserves from a central bank?). So although I think there is too much emphasis on attracting customer deposits (which implies attracting reserves/cash), the rest of the book made sense as an introduction to banks for a novice investor.
The balance sheet is the most important part of a bank because, unlike most other companies, a bank makes its money through allocation of the balance sheet. For this reason its important to understand the assets and liabilities of the bank.
The composition and quality of assets determines the profit potential: the types of loans & securities, the borrowers, the maturity profile, and the liquidity. The liability side of the balance sheet is equally important because it can be equated to the means of funding the assets. Deposits are the simplest and cheapest way of funding loans and the higher up the capital structure you go the more costly the means of funding.
Asset liability mismatch is an important risk for bank balance sheets, and so is the risk of borrower default. The section discussing a basic analysis of non-performing loans and defaults was helpful.
The book looks at banks as intermediaries and therefore puts a lot of emphasis on a banks' need to attract deposits in order to fund loans. I am skeptical this it works this way (reserves are only needed if deposits are transferred to other banks, and in that case why can't banks borrow reserves from a central bank?). So although I think there is too much emphasis on attracting customer deposits (which implies attracting reserves/cash), the rest of the book made sense as an introduction to banks for a novice investor.
August 25, 2024
Nineteen Chapters. Two, maybe three, near the end are useful. One is an ad for the author's data service. The rest are fairly elementary (but the authors warn you of that) written in a prose style that can best be described as 'Dad Joke-ese'.
The authors point out the raw data is available from the FDIC for free on multiple occasions, but never bother to tell you where (perhaps because it competes with the previously mentioned data service?). Here it is: BankFind Suite
So why a 3-star ('liked it')? The final chapter is an excellent framework for bank investment evaluation.
Overall, the book is light on detail compared to others like The Zen of Thrift Conversions: How To Turn Hidden Bank Stocks Into Big Gains, but for a modest price your real cost will be your time. Skim and skip ahead.
The authors point out the raw data is available from the FDIC for free on multiple occasions, but never bother to tell you where (perhaps because it competes with the previously mentioned data service?). Here it is: BankFind Suite
So why a 3-star ('liked it')? The final chapter is an excellent framework for bank investment evaluation.
Overall, the book is light on detail compared to others like The Zen of Thrift Conversions: How To Turn Hidden Bank Stocks Into Big Gains, but for a modest price your real cost will be your time. Skim and skip ahead.
March 31, 2023
This book is good for anyone that doesn't know anything about banks and how banks generate income. I wasn't satisfied with it. I thought it would address the two questions I care most about: what bank stocks to buy, and when to buy them. The book doesn't give a step-by-step valuation. Rather, it shows how banks are different from other industries, and what to look for in a bank balance sheet, which is good for beginners though.
March 20, 2023
A decent read for anyone new to the sector but it lacks depth for those with valuation experience. The framework for looking at the sector seems sensible but does not go into the details on analyzing the financial. Overall it is useful but should be viewed as a stepping stone more extensive content.
January 7, 2018
A good book for understanding banking
The first 10 or so chapters are fairly basic for those with some financial services background/knowledge. Second half of the book has valuable insights. Good, easy read. Authors have done a great job keeping it simple.
The first 10 or so chapters are fairly basic for those with some financial services background/knowledge. Second half of the book has valuable insights. Good, easy read. Authors have done a great job keeping it simple.
August 28, 2018
Excellent introduction to investing in banks
This book is a perfect introduction to investing in bank stocks for readers with a basic understanding of accounting and investment fundamentals.
This book is a perfect introduction to investing in bank stocks for readers with a basic understanding of accounting and investment fundamentals.
January 17, 2021
It has very cursory knowledge on matrices and calculations. However, it explains in depth the broad working of a bank and the entire system. It is excellent for young investor, however might be a waste for a someone already investing over a year or a two.
December 26, 2022
Great Primer on Bank Investing
This is an excellent primer on banks, bank fundamental, and making investments in bank stocks. The authors have done a good job in making all the information accessible and easy to understand.
This is an excellent primer on banks, bank fundamental, and making investments in bank stocks. The authors have done a good job in making all the information accessible and easy to understand.
February 10, 2024
I rated this 5 stars because this book does a great job with the basics, so in that sense 5 stars. If you are familiar with basic investing concepts, but don't really know much about investing in banks then read this book.
October 23, 2018
A really nice book which explains working of a bank in very simple terms. This is perhaps not for advanced readers/investors but really good to have a basic understanding of the bank.
March 11, 2020
Decent overview of investing into banks
Ok types. Some practical examples with real life case studies would have made it more fruitful.
A quick read - don't expect too much.
Ok types. Some practical examples with real life case studies would have made it more fruitful.
A quick read - don't expect too much.
March 19, 2023
Very beginner friendly
September 22, 2023
Really helped me learn about bank investing.
September 13, 2022
https://youtu.be/tdYupQ6gSnA a timely song
Displaying 1 - 17 of 17 reviews