Birinyi Says He's Been Actively Trading Financial Shares

By Eric Martin and Carol Massar

Sept. 11 (Bloomberg) -- Laszlo Birinyi, the investor who correctly predicted financial stocks would tumble in October, said he has been actively trading bank and brokerage shares and isn't buying them for the long term.

``We've been fairly active trading some of these stocks,'' Birinyi, who oversees more than $350 million as president of Birinyi Associates Inc. in Westport, Connecticut, said in an interview on Bloomberg Television. ``At the same time, we have been on both sides of the trade. I continue to be in a trading mode and not really trying to pick up the long-term investment trends, because I don't think they exist right now. I'm not really excited about holding financial stocks here for the long term.''

Birinyi's October warning that financial shares would drop preceded a 38 percent plunge in the S&P 500 Financials Index, spurred by writedowns and credit losses stemming from the subprime-mortgage market's collapse that exceeded $510 billion worldwide.

Birinyi said June 26 that buying and holding U.S. stocks is ``very treacherous'' because share prices are swinging too much.

Birinyi worked more than 10 years on the trading desk at Salomon Brothers Inc. before starting his research and money management firm in 1989. He is known for pioneering money flow analysis, which compares the dollar amounts moving into or out of a stock or index to establish whether it is being more aggressively bought or sold.

To contact the reporters on this story: Eric Martin in New York at emartin21@bloomberg.net; Carol Massar in New York at cmassar@bloomberg.net.