Banks to keep branches open during the shutdown announced by...

Banks to keep branches open during the shutdown announced by NSW, VIC and ACT. Banks are classified as an essential service because society needs Banking and Financial services. Banks are impacted by the recent events but this is a blip in the long run. It is evident from the recent announcements that Aussie banks are stepping up and supporting the Australians who might face some financial troubles in the short term. Stimulus packages are being announced by governments across the world. Central banks are reducing interest rates and announcing QE's once again. Helicopter money stimulates an economy by making it easier for businesses to borrow money to grow their business. It reduces unemployment as businesses hire staff as their business grows.

Australian banking system remains strong and will emerge even stronger in few months time when this crisis is over. Bank share prices are destined to go higher in the long term. The lesson learnt from GFC was to not fight Central banks. Buy shares as share prices will go up a lot and they actually did go up a lot. We are at the foothills of the next biggest boom of our lifetime. There will be significant rise in Bank share prices over the next 3-4 years once again when this stimulus money starts circling the world banking system.

Bank share prices tend to bottom out before the overall market reaches bottom. On 23rd Jan 2009, Westpac closed at $14.50 where ASX200 closed at 3145 on 6th March 2009. Westpac closed at $20.26 on 3rd April 2009. Post GFC, the recovery in Banking and Financial Services was very sharp and quick. Bank share prices went up very fast. Most of those who stayed on the sidelines when Bank shares were hitting lows, continued to stay on the sidelines when prices went up. You never know when it is the right time to buy. Even Buffet says it is far better to buy a wonderful company at a fair price than to buy fair company at a wonderful price. Westpac is currently below its intrinsic value and its a wonderful company and we have once in a decade opportunity to buy Westpac shares at below fair price.