I wouldn't touch financial stocks

The industry had a nice run up until the summer of 2007, but their profits came from taking on excess risks without even realizing it.

Their profits came from the housing bubble, excessive leverage, and complex derivatives which I don't even understand. The industry is too messy to analyze, especially when you don't even know where their profits are coming from exactly or the value of their assets. If I was a banker, I might be able to analyze them better, but I really don't know what the hell goes behind the scenes at some of these financial institutions.

Many of the institutions look like they have value compared to last summer, but I don't think they can match their profits from the past. They will be forced to take less risks either by pressures from the free market or government regulation. I don't see them getting back to their glory days anytime soon.

If I had to invest in a financial company, I would look for a savings and loan that still has integrity behind its name. One that didn't take excess risks but was sold off due to this financial crisis anyways. Since I feel like this industry is run by greedy pigs, I place value on honesty, integrity, and transparency.