Whitney Tilson, whose calls about the housing bust, financial crisis, and huge government bailout have proved prescient over the past year, tells CNBC that after making a bundle shorting financial stocks he’s now finding some good long opportunities in the sector.

“Valuations have compressed so much we actually flipped around and went long some financials such as American Express and Wells Fargo,” says Tilson, who runs T2 Partners and is also a Kiplinger’s columnist. “I think there’s a 70% chance Wells Fargo makes it without any kind of catastrophic outcome in which case it’s a $40-$60 stock. And at current levels [about $15] that’s a pretty attractive risk/reward.”

Tilson says that investors who want to invest in beaten-down financials should “look at companies with strong balance sheets, real franchises that you think can survive without doing highly dillutive equity raises or get bailed out by the government.” He also says many investors are making a critical mistake when evaluating financial stocks. “People often look at what the losses will ultimately be and then compare it to today’s balance sheet and make a decision,” he told CNBC. “But the mistake is the losses will come in over many years. As long as profits keep up with losses they’re going to make it.”

In the case of Wells Fargo, he thinks profits will keep up. He expects the firm to lose $8 billion a quarter for several quarters, but notes that Wells is making $8 billion to $10 billion of profit per quarter. “As long as profits keep up with losses they should win the race,” he says.