Here’s the divergence that we would like to bring to your attention today.   It involves our SMC holding: the Bank of Ireland (Ticker: IRE) –

For most of the day the Bank of Ireland was trading in the green = UP from Friday’s close.  It finally closed flat for today on pretty strong volume of approx. 10.2 million shares.

Meanwhile, Allied Irish Banks (Ticker: AIB) closed down approx. -8%.

When we made our decision to invest in the Bank of Ireland on November 29th, it was our conclusion from our analysis that the Bank of Ireland was the better investment.  In the following days and now weeks, we were a bit surprised to find AIB moving also robustly higher – mostly in step with the Bank of Ireland.  That convergence in stock behavior was more than a bit disappointing for us.  IT WAS A WARNING SIGN.   We wanted to see the Bank of Ireland stock head firmly north and continue in an uptrend, and see AIB lag considerably.  It’s not that we have anything against AIB, it’s just that it has much more Irish government ownership and trouble.  If our decision to purchase stock in Bank of Ireland is going to prove a longer term success story, then there MUST at some point be a differentiation in these two stocks…

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