NEW YORK (TheStreet) --The financial sector has been having a nice run since Donald Trump won the election for President. The Financial Select Sector SPDR Fund (XLF) is higher over 11% in that time, and the SPDR KBW Regional Banking ETF (KRE) is higher over 17%.
Despite the impressive run in financials, O'Shares Investment Chairman and CNBC's "Shark Tank" investor Kevin O'Leary is feeling bearish on the sector.
"Let's all agree, we are getting 25 bps in December and that maybe it for 2017. That's not enough to make money in banks," O'Leary said on CNBC's "Halftime Report" Monday afternoon.
He cautioned people against being long financials under the assumption the Federal Reserve enacts a series of interest rate hikes.
"I am extremely optimistic that we are going to get growth, but you will not see very much of it in 2017," O'Leary contended.
He explained that the possible policies, which stand to benefit financials under a Trump administration, are "going to take months, if not years," to come about.
"This is a call I am making that is going to be controversial; I predict the financials will underperform the S&P in 2017," O'Leary said.
He is making this bet on the premise that tailwinds resulting from policy, interest rates, and spreads will take longer to materialize than people think they will.
"I'm still holding 9%, but I am taking lots off the tables in the regional's. Those guys' world hasn't changed much; they are still [heavily] regulated, and it's going to take to 2018, if ever, to get rid of Dodd-Frank," O'Leary said.