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Old 01-15-2009, 03:50 PM   #21
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So consensus is don't sell, but don't buy any more and get diversified with the rest of the portfolio, right?
Yes, that's pretty much the consensus, with my (outlier) position favoring a sell off of some BAC until the remaining amount is an amount he'd feel comfortable with as a speculative position (because that's what it is). Use the proceeds to buy into a diversified portfolio of assets hard-hit by the recent downturn.
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Old 01-15-2009, 04:14 PM   #22
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So consensus is don't sell, but don't buy any more and get diversified with the rest of the portfolio, right?

I'm OK with the rest of the portfolio as BAC is/WAS my largest holding.....guess it still is, even at this level.

samclem ~ I appreciate your suggestion to sell a portion of my BAC holdings AND I may regret not doing so at some point in the future..... but I'm not a sophisticated investor by any means and the banking sector has done well in the past....it's just that the world is upside down at the moment

I'd be a happy camper IF I could keep from looking at it AND IF I could come back to it in a year or two AND see that it has recovered to even HALF of what it was...say $25/share....

That would sure beat what seems to be brewing.....and what could be upcoming headlines:

BAC NOW USA's LARGEST GOV'T OWNED BANK

Thank you for all of your replies!
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Old 01-15-2009, 04:52 PM   #23
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Gotta give Brewer his due
You should be giving Running_Man his due. He was entirely correct in his predictions on the banking sector and BAC in particular. I remember he was the one predicting a $12 price on BAC back when it was in the 40's and many posters thought he was nuts. Then again, BAC would have been much better off if Lewis hadn't gone and bought ML and CFC. Anyway, posts like his opened my mind to re-analyzing my bank holdings and got me to sell my BAC at $38 back in April after they did their second capital raise.

If you had $100k in your pocket today (and no BAC) would you buy BAC? (I wouldn't.) If not, sell it and if you still love the banking sector buy KBE or KRE -- you'll get most of the same upside with no real chance of watching it go to zero. BAC is probably going to cut the dividend to zero soon anyway so making that switch would also keep some income coming in for you. Just what I would do. Good luck.
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Old 01-15-2009, 05:45 PM   #24
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You should be giving Running_Man his due. He was entirely correct in his predictions on the banking sector and BAC in particular. I remember he was the one predicting a $12 price on BAC back when it was in the 40's and many posters thought he was nuts. Then again, BAC would have been much better off if Lewis hadn't gone and bought ML and CFC. Anyway, posts like his opened my mind to re-analyzing my bank holdings and got me to sell my BAC at $38 back in April after they did their second capital raise.

If you had $100k in your pocket today (and no BAC) would you buy BAC? (I wouldn't.) If not, sell it and if you still love the banking sector buy KBE or KRE -- you'll get most of the same upside with no real chance of watching it go to zero. BAC is probably going to cut the dividend to zero soon anyway so making that switch would also keep some income coming in for you. Just what I would do. Good luck.
Here is a group with some smarts who give BAC a 1 in 8 chance of bk or what would be equivalent for a shareholder, being wiped out by a complete governemnt takeover during the coming year.
24/7 Wall St.: The 24/7 Wall St. Chapter 11 Watch (SIRI)(GM)(CHTR)(MNI)(F)(NYT)(BAC)(C)(MOT)(AMD)

It's a blind crapshoot, and from my POV likely offers worse odds than craps tables. If I had a large part of my assets in this, I would maybe never sleep again.

Ha
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Old 01-15-2009, 06:45 PM   #25
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I would sell.

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Old 01-15-2009, 07:20 PM   #26
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I am retired, 50, and keep 100% of my portfolio in individual stocks. I have tracked BAC for many years, but at this point I would not consider investing in them. Their balance sheet numbers are mostly guesses at this point - I cannot even begin to estimate a value for them (or most any financial stocks now).
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Old 01-15-2009, 08:17 PM   #27
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Tought call, I would probably sell. Quite gut-renching to read your story. However, it does point out the danger of concentrated stock positions......

Our RIA has a lot of retired GE folks in it. Many of them refuse to pare down their holdings, so the tumble to $14 has been ugly. They are calling for Immelt's head. Maybe that's why I admire guys like Jack Welch and Peter Lynch....they have an UNCANNY ability to know when to leave............
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Old 01-16-2009, 09:24 AM   #28
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Well there went most of the Dividend down to $0.01 versus $0.32. Bank of America slides to 4Q loss; gets more aid - Road Runner
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Old 01-16-2009, 02:30 PM   #29
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I just want to comment briefly on the concept of "too big to fail". No doubt Citicorp and BAC are too big to fail. But they are not too big to allow the shareholders to be wiped out completely.

From today's NYT:

http://www.nytimes.com/2009/01/16/bu...anking.html?em
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Old 01-17-2009, 12:10 PM   #30
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I have been totally out of the banking sector since 2005. Diversity be damned. I saw the bubble forming in RE and knew that nothing good could come of it.

(All my losses have come from the other sectors...)

I would sell and take your lumps. Keep your money liquid and wait for the tsunami to pass.
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Old 01-17-2009, 12:42 PM   #31
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I have been totally out of the banking sector since 2005. Diversity be damned. I saw the bubble forming in RE and knew that nothing good could come of it.

(All my losses have come from the other sectors...)

I would sell and take your lumps. Keep your money liquid and wait for the tsunami to pass.
While I agree that this is way too much money to have in a possible wipeout, your advice to sell and stay liquid until the tsunami passes sounds a lot like "buy high, sell low, but only if it gets scary out there."
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Old 01-17-2009, 12:44 PM   #32
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But isn't there an investing rule about not falling in love with your stocks? If you realize you have a dog, bite the bullet and get rid of it even at a loss and put the money somewhere (several places, imho for this amount of money) where it at least has a chance of appreciating?
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Old 01-17-2009, 12:47 PM   #33
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But isn't there an investing rule about not falling in love with your stocks? If you realize you have a dog, bite the bullet and get rid of it even at a loss and put the money somewhere (several places, imho for this amount of money) where it at least has a chance of appreciating?
Don't know if this is an answer to my post- but if so, I totally agree. Where I disagree is the "stay liquid until the tsunami passes".

Ha
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Old 01-17-2009, 04:15 PM   #34
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Don't know if this is an answer to my post- but if so, I totally agree. Where I disagree is the "stay liquid until the tsunami passes".

Ha
I do too unless you were already in a liquid position before the tsunami hit. There are many posting here who rely primarily on investments such as CDs and treasuries. I'm just not comfortable with the "buy because this is a blue light special" philosophy and would advise them to stay liquid until this is sorted out. If you are heavy into beat down equities like the OP, the question is whether you should bail thinking it will only get worse or stay the course hoping for better times. I don't think anyone really knows the answer to this.

Like some others have suggested, I would not be inclined put more funds into a depressed stock like BAC hoping to "double down". I also agree this illustrates why it’s not good to have a heavy concentration in one stock or feel an emotional connection to a particular company.

Many people are facing a similar dilemma with real estate. DH and I have two homes and have struggled with if we should sell the rental or hang on waiting for the market to improve. We are not, however, pondering the acquisition of additional real estate. This might be dumb as it really is a buyer's market and I suspect many will do quite well by purchasing property. I just don’t have a well functioning crystal ball.
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Old 01-17-2009, 08:36 PM   #35
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But isn't there an investing rule about not falling in love with your stocks? If you realize you have a dog, bite the bullet and get rid of it even at a loss and put the money somewhere (several places, imho for this amount of money) where it at least has a chance of appreciating?

I hope you aren't advocating shooting dogs, PETA will be upset. If it was cat Purron and I would up in arms;
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Old 01-17-2009, 08:58 PM   #36
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If it was cat Purron and I would up in arms
You bet ya I would. Since someone mentioned cats, here's my opportunity to show you all the latest rescue project from the local shelter - a very nice little boy we dubbed "Calvin" who has a bit of ringworm we are treating with great success.
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Old 01-18-2009, 12:15 AM   #37
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I hope you aren't advocating shooting dogs, PETA will be upset. If it was cat Purron and I would up in arms;
I second the emotion about the cat thing.

In reply to the OP, I am not intelligent enough to invest in individual stocks. I believe few people are. If it were me I wouldn't have ever been in an individual stock.
But then I've watched my investments (mutual funds) go down down down, anyway, so what do I know?
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Old 01-18-2009, 08:27 AM   #38
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Thanks for your thoughts but I have decided to hold the BAC stock....to the ground maybe, but I certainly hope not.....I know that I will have to find other income to live off of other than the dividends....and I accept the fact that it will be MANY years before BAC regains its footing.....BUT it seems to me that the recent government (backing/bailout) plan to maximize BAC's losses (it appears BAC is limited to 10%) should put them in a position to continue in business. I do see possible further erosion of the stock price as mutual funds unload it to replace it with something that WILL be paying a decent dividend....although even that should be a slow process as they will not want to (or should not want to) drive the price down further either....

Even their latest quarter indcated an INCREASE in net interest income of 32% (up from $34Bil to $45Bil) and a 2008 YTD net income of 4 billion! (I hear YOU ....and at that rate it will take 10+ years to pay back the FED)

I realize that the continued recession may impact their earnings but with the (as I have read) FORCED acquisition of Merrll Lynch (seems Mr. Lewis had thoughts of using his "back out clause") by the FED, it appears the FED thinks them a necessary part of the American banking system.....

I do NOT plan on buying more BAC.....no doubling down.....although I have to say that I am having to resist that temptation !!

I found another poster on another site who seemed to have summed it up well ~

"To say that I'm infuriated is an understatement. I feel cheated, swindled, and betrayed. I know, of course, that investing in any company is risky. Money can be be lost, even all of it sometimes. But somehow I see this as being different. And not just because I had money in it. This is Bank of America, for God sake. The number 1 bank in the world. Now, because of greed and incompetence they're wards of the state."

Finally.....as one of those posters who thought runningman to be way off the mark with his BAC predictions, I offer my whole hearted apology and invite his insight here again....and I have to admit that if his current analysis indicates significant futher erosion in the stock price, I would reconsider my decision..... ......
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Old 01-18-2009, 09:13 AM   #39
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Kenneth Lewis gambled big. He lost. Now taxpayers have to pick up his tab. For that, the Bank of America Corp. chief executive officer probably needs to go. At the very least, Lewis, who also is chairman, should give up one of his posts to bring greater accountability to the bank.
Not because one specific bet, Merrill Lynch & Co., is souring. Lewis could be forgiven if that were his only misstep.
It’s not. Since the crisis began, Lewis has misjudged the depth, breadth and severity of the storm that has crushed the global financial system. In doing so, he used capital that he should have been husbanding.
David Reilly, Bloomberg

and many other similar sentiments on The Big Picture The Big Picture

When BAC and Citi are both in trouble, it is time to head for higher ground...
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Old 01-20-2009, 06:15 PM   #40
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