Remember two weeks ago when Dick Bove warned that Morgan Stanley was “doomed” and that it was just starting to look like Lehman Brothers.
Now Bove has completely changed his mind, thanks to the appointment of James Gorman to succeed outgoing CEO John Mack.
Why is Gorman a game changer? Because he is “cerebral,” according to Bove.
In a report released today, Bove makes a full 180 about his prospects for the bank and is full of praise for Gorman, who, beyond being cerebral, is “the right person,” “has been very effective in developing long range plans” and “knows how to execute.”
Quite a change with what he said in late August, when he questioned the bank’s latest strategy: increasing trading risk and adding traders, and noted that the bank had a habit of moving “with too little, or too much, too late.”
From today’s report:
It is likely that he will build a long‐term business model for the company. This model is likely to enhance the firm’s position as a top ranked investment banking firm. It is likely to stabilise and develop a longer term strategy for trading. Most important, Mr. Gorman might be able to reduce the turmoil in management that has now characterised this company for a decade. This change is a plus for the company and a plus for the stock.
Another way of interpreting this: Bove hated John Mack. Now that Mack is making for the exit, Bove think Morgan Stanley can survive.
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