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BAC still a no-go...?
Posted on 7/22/08 at 3:15 pm
Posted on 7/22/08 at 3:15 pm
Two weeks back I asked the board's opinion on buying into BAC. It was around $22 or so then and got down to $18/$19 range last week (btw, I did not pull the trigger). Today, on falling oil prices, its up over 10% to $31 currently (at 4:00 p.m. EST). What is your call now...buy (at current price or wait for it to pull back on oil surge) or are you still suggesting the "don't touch financial markets" position? I have $2K to spend on something...still looking at BAC as a long term investment buy.
Thank you in advance for the insight and opinions!
Thank you in advance for the insight and opinions!
2
Posted on 7/22/08 at 3:33 pm to toddts
quote:
don't touch financial markets
Posted on 7/22/08 at 8:54 pm to Martavius
If you like BAC buy it and put a stop loss on the holding at a value you are comfortable with, if it plummets you can buy it back later at a cheaper price, if it goes up you are happy. That author hasn't any better clue than anyone else as to where bank stocks will be in 1-10 years from now.
Posted on 7/24/08 at 6:15 pm to tirebiter
I'd say BAC might be the single most over-valued financial name currently.
Posted on 7/24/08 at 8:37 pm to Tiger JJ
quote:
I'd say BAC might be the single most over-valued financial name currently.
Just curious: Based on what? Where do you think it should be trading?
Are saying that you think that they ultimately end up having to cut the dividend? The yield still makes it seem like a (long term) buy at today's $30 and 8%+ yield? The COB reaffirmed his intention to pay div. at almost all cost in their recent call. The history is that they have raised it like 28 straight years. $3.5B or $.72 in Q2 earnings ($.64 div) in spite of loss coverage, additional provision expense in the $2B range, trading losses, etc. That leaves it trading at about 10x current earnings at today's close.
I'd agree that it is a scary time to be putting money to work in any Financial institution right now including BAC. I certainly understand price could go lower especially given current volatility. But that is a worry in any of them.
In the interest of full disclosure; I own a nice chunk of BAC.
Posted on 7/24/08 at 9:34 pm to Cowboy Tiger
Based on Countrywide and also BAC's own portfolio of HELOCs. I could easily see them blowing through their entire tangible equity just from losses in those 2 portfolios. The HELOCs are something like $120B on their own. Keep in mind what a HELOC is: it's a SECOND LIEN mortgage.
Posted on 7/24/08 at 9:45 pm to Tiger JJ
I was following BAC for a while and I was under the impression that with the exception of country wide, they were not in all that risky of a situation.
Earnings still appear strong and I wish I had gotten in a week ago.
Earnings still appear strong and I wish I had gotten in a week ago.
Posted on 7/25/08 at 7:42 am to footballislife
quote:
I wish I had gotten in a week ago.
Yeah but thats kinda like saying "I wish I woulda bet on Red instead of Green at the roulette table."
Posted on 7/25/08 at 8:23 am to C
quote:
Yeah but thats kinda like saying "I wish I woulda bet on Red instead of Green at the roulette table."
I know, but I asked about the stock on here recently. I actually told my wife(she is an investment advisor) early last week to buy some for me, but she talked me out of it just because we have better use for the cash at this time.
Posted on 7/25/08 at 8:35 am to footballislife
You will likely have the opportunity to buy it well south of $30 over the next 2 reporting periods. I don't disagree with Jersey's take, much like it was quite apparent that WB's management was outright lying about the risk in their portfolio, but if BAC goes to zero we collectively will have a lot more trouble than deciding to have been equity averse/cash strong as your dollars aren't going to buy crap. I am even more skeptical of the financial sector funds right now, when are the insurance companies going to start writing down the junk in their holdings? Roubini is saying that if the IB's become more heavily regulated their business model will no longer be viable as they won't be allowed to lever up like in the past.
Posted on 7/25/08 at 4:03 pm to tirebiter
I think this will be another great buying opportunity at south of $23 (if it makes it that far again). Like one of the folks said above, I to wish that I did not talk myself out of buying a good chunk at $19 per.
Like Tirebiter said, I think this will definitely continue to be a volatile stock, I just hope it gets down enough again.
Like Tirebiter said, I think this will definitely continue to be a volatile stock, I just hope it gets down enough again.
Posted on 7/25/08 at 5:45 pm to toddts
What new analysis do you think you guys bring to the table with a company this size to be talking about buying and selling it?
Posted on 7/25/08 at 7:16 pm to Tiger JJ
quote:
Based on Countrywide and also BAC's own portfolio of HELOCs. I could easily see them blowing through their entire tangible equity just from losses in those 2 portfolios. The HELOCs are something like $120B on their own. Keep in mind what a HELOC is: it's a SECOND LIEN mortgage.
Thanks for the reply. Good point on the $120. It caused me to do some research and "analysis" today.
One thing that occurred to me today that I find interesting; the Countrywide acquisition likely puts BAC in first lien position on a much higher percentage of their HELOC portfolio and ahead of their competitors on lot of them too; especially in California.
Plenty of losses to be had there. Just getting started too! I think they can handle them. We'll see!
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