Bank of America Stock

[al_bundy]

all these stupid bankers and hedge fund managers not buying BAC. all the money they can make borrowing at 1% in some country and buying BAC just for the dividend

 

[Enuf]

Doesn't Mr Market climb the wall of "Worry Warts"?
Could there be any action such as a BAC and WB merger in play?

 

[haha]

Actually, I'm counting (hoping) on the dividend staying in place especially if BAC nudges back to mid $30's. So yeah, it's a gamble. I will hold long term if BAC lingers low $30's but will sell (in IRA) if it bounces to $37.20.

What would you do at $37.10?

This plan tells me that you are looking for $5-7, and risking who knows what in that quest?

Wow!

bought 10,000 shares today at 30.19, so it's bound to go to $15.10. Luckily I almost never lose more than half.

I hope you have a few more $300,000 packs wherever that one came from.

Ha

 

[Abreutime]

all these stupid bankers and hedge fund managers not buying BAC. all the money they can make borrowing at 1% in some country and buying BAC just for the dividend

The dividend is likely to be cut. Not guaranteed, but likely. On the bright side, an expectation of a dividend cut is partially priced in, so hopefully it won't drop too much if/when it's cut. Also, even if the dividend is cut in half, the yield will still be solid (it's just over 9% currently).

I don't own any BAC (have some WFC... not much better), but I've been watching it.

 

[Zathras]

At this point I would sooner buy GE (4.3% yield) as I have far more confidence in their dividend safety.

 

[Enuf]

What would you do at $37.10?

This plan tells me that you are looking for $5-7, and risking who knows what in that quest?

Wow!



I hope you have a few more $300,000 packs wherever that one came from.

Ha

Actually, I'm hoping to hold BAC longterm as I suspect any dividend cut upcoming has already been priced in. And if I am correct, the dividend cut should be 30-40%. Still a nice dividend. A cut to 5-6% at todays $28.20 (new 52 week low) would not surprise me at all.

An yeah, a few more packs in the fridge. And all in Index funds.

 

[VaCollector]

WOW! $27.50 and sinking.....I don't feel so good....

Wish I has some of that $$$ Enuf has in his freezer.....although, I haven't been so lucky so far.....

Opportunity time, YEAH I know....but is it the last opportunity to sell (aka Bear Sterns) or the buying opportunity of my lifetime....

Where's the earlier poster (here or in bank stock post) who predicted an $18-19 bottom....technical analysis geeks - what say you??

Now where did I put that Magic 8 Ball??

 

[al_bundy]

maybe the people in the know on wall street have advance warning that the countrywide buyout is going to blow up?

 

[Enuf]

VACollector, I know the feeling. I'm playing with my mad money but darn, even losing the mad money seems maddening.

Looks like most of the banks are taking the same beating but what is behind that. Another major financial in big trouble and not in the news yet?

 

[al_bundy]

there are rumors that Lehman Brothers is in big trouble and may be insolvent. a hot shot hedge fund manager who has been right a lot of times even has a huge short bet on them.

 

[haha]

(June 16): I bought 10,000 shares today at 30.19.

(June 19): I'm playing with my mad money but darn, even losing the mad money seems maddening.

Folks, give it up now for the new Big Swinging D. of ER.org.

I guess that is why it is called Mad Money. I know I would be plenty mad if I lost anything like this.

Ha

 

[Enuf]

Actually have my sell point set at $5/share, so the "mad" part of that $300k is more like $50k. Yeah, it will make me mad but a $50k loss won't effect my portfolio enough to affect my lifestyle.

 

[haha]

More Trouble Predicted For BAC, Other Banks

Large U.S. banks' stocks in capitulation mode: Merrill: Financial News - Yahoo! Finance

I think this guy makes a good point. I don't remember many instances where a stock gets significantly diluted and current shareholders don't experience some loss. True, it reduces risk of failure, but you also own less of the company than before.

Often there are other equities almost as depressed as the ones at risk for offerings. These IMO are a better bet.

Ha

 

[grumpy]

My stock purchases are mostly dividend plays. I sold some appreciated Dominion Resources (D) shares this morning and bought more BAC with the proceeds. I figured that even if BAC is forced to cut their dividend in half, I will still be better off in terms of dividend income. I expect to hold the BAC shares long term.

Grumpy

 

[al_bundy]

Calculated Risk: S&P Research Downgrades BofA

 

[Enuf]

Well, at $50,000 poorer, my sell order kicked in at $25.20. Yikes. Maybe I will wait and buy back in at $18.

Only problem, my index ETFs are taking such a hit, my mad money may become my nest egg soon.

Mr. Market seems troubled.

 

[Running_Man]

WOW! $27.50 and sinking.....I don't feel so good....

Wish I has some of that $$$ Enuf has in his freezer.....although, I haven't been so lucky so far.....

Opportunity time, YEAH I know....but is it the last opportunity to sell (aka Bear Sterns) or the buying opportunity of my lifetime....

Where's the earlier poster (here or in bank stock post) who predicted an $18-19 bottom....technical analysis geeks - what say you??

Now where did I put that Magic 8 Ball??

I believe I am the earlier poster you were looking for. A year ago I was looking for a sustained decline lasting 18-24 months led by the banking stocks. At that time KRE was at 44 and BAC was at 50, banks were looked to rebound since "?!?" the subprime crisis was overblown and bank stocks were "cheaper than they had been in a decade".

In general my position that the paper written on the housing stocks in America was worth much less than was thought possible. The Fed, in a surprise to me, has abandoned the US dollar and inflation containment because of the fear of what would happen to the banking system. JP Morgan is now cheaper than when it was announced they were being permitted to take over Bear Stearns, which led to a 33 percent rally in JP Morgan as it was viewed as overwhelmingly positive. Despite the Fed's backing the banking stocks are right now lower than ever. This bodes ill if there are any more future problems as the FED is shooting widely and loosing international credibility. KRE today is setting a new low. BAC is near breaking 24, the market certainly believes BAC will have to cut it's dividend.

Now that KRE is in the range I was looking for (26-28 is it a buy and what about BAC it has fallen from 50 to 24? BAC has fallen even more than the KRE -- while I was looking for a fall to around 12 it's low point in range from 1989-1995, and a historical repeatable drop percentage of 75-80 percent seen in banking stocks during severe banking crisis in the past. As BAC approaches it's 2000-2003 low of 20, this could be the low for the stock if the economy reverses and BAC is not required to cut it's dividend too far.

Keep in mind that I am less than 10 percent equities and do not see myself getting above 25 percent until November 2009, my position is that it is possible but not likely that KRE is near a bottom. Despite that the upside to the 200 day moving average on KRE is huge nearly 25 percent which show the amount of selling that KRE has been under. It could rally that much and still be in a bear market itself. BAC has 34 percent to it's 200 day average. Therefore I am actually putting 1/2 percent of my portfolio into KRE today, which is 1/10th of the maximum investment I'd ever be willing to do. I feel the amount of time spent declining is still not enough on KRE although the price is and yet still will carry for the dividend as part of my increasing my meager equity strategy.

BAC I still would wait for either a major upswing or 12 before I'd be willing to buy. Which is not helpful I know but would assure me that the worst has occured.

 

[terminator]

Therefore I am actually putting 1/2 percent of my portfolio into KRE today . . .

Just curious, did you get a satisfactory answer on why they did not pay a March distribution and why the June one was so small?

 

[Running_Man]

Just curious, did you get a satisfactory answer on why they did not pay a March distribution and why the June one was so small?

I called State Street and spoke with a representative who was actually very helpful and forthcoming. The ETF actually pays it's dividend using fund accounting and as such it will not track the actual payments made by the banks themselves. The yield they indicate on their website also is actually incorrect as it is merely the last 12 months payments divided by the price on the day. As such it is overstated as they made an erroneous overpayment in December which resulted in the 96 cents. The amount of funds that should have been reserved for 1st quarter expenses were not and as such all the cash dividends received were needed for operating expenses. Additionally they still ended with a negative fund balance in March that resulted in the June Dividend being lower than it should have been.

He assured me the issue was now behind them. It is without a doubt a very black eye for State Street but I do not believe there is any reason to doubt the actual payments should track more closely the underlying stocks in the future. However this is also a minor part of my total portfolio and I would not care to hold much more than the 1/2 percent of my portfolio I bought yesterday.

I will say my prediction of BAC at 12 is looking less insane every day isn't it? 22.70 right now!?!

 

[haha]

However this is also a minor part of my total portfolio and I would not care to hold much more than the 1/2 percent of my portfolio I bought yesterday.

I don't understand your thinking here. If you have a $5mm portfolio, you still will only have $25,000 in this etf. Why bother? There is no single issue risk, in fact at these levels your only risk is apt to be time. At 1/2% of portfolio, it can't hurt but neither can it help. Now if it were some huge longshot I could understand, but this I truly cannot.

Ha

 

[Running_Man]

I don't understand your thinking here. If you have a $5mm portfolio, you still will only have $25,000 in this etf. Why bother? There is no single issue risk, in fact at these levels your only risk is apt to be time. At 1/2% of portfolio, it can't hurt but neither can it help. Now if it were some huge longshot I could understand, but this I truly cannot.

Ha

Ha, despite the lack of single issue risk, the sector risk is very large. If the economy were to regain its footing, this index, assuming the fear of the housing industry were to be erroneous, would most likely return to the 50+ range again in a reasonable time frame while paying a 5 percent dividend. In order to invest more into this index tho I would want to see confirmed signs this is actually occuring. Additionally now that I have the ownership my personal fiduciary duty will force me to track the individual stocks in the index since I am an anal financial person who actually enjoys listening to earnings calls and reading financials, which may lead to a further investment in the future in an individual issue. How else would I ever have heard of Frontier Financial Corp and realize what a disaster this company is as they have cut their dividend 67 percent this quarter? Or that Washington Banking Co has terminated their proposed merger? Their next earnings call is July 22nd and should be a real mea culpa.

I am presently investing 1 percent of my portfolio every month back into stocks starting from zero level in October 2007, under the assumption a significant stock decline caused by falling home prices was probable. This investment is 50 percent of my maximum investment I would be making this month. I view every dollar I invest as important and try force myself to stick with my long range plans.

Were I of my own volition and not following my plan I would be hard pressed to convince myself to purchase anything at the present time. When I do not have any individual stocks I am thrilled about buying I will buy indexes as a "filler" to get me to the stock allocation I planned to have. For these reasons and for lack of a better alternative in my mind for right now I thought it was the best candidate for addition to my portfolio this month.

 

[haha]

I see, Running Man. Thanks for sharing your thinking on this.

Ha

 

[VaCollector]

Woooohooooo!

Only 7 more days like today and I'll be back even!!!

(he says with unbridled enthusiasm.....taking the momentary opportunity to celebrate his one small daily victory after the immense daily beatings that have become common place..........even with the realization that winning the lottery may offer better odds!!)

Weeeeiiiiiii !!!

 

[Purron]

Woooohooooo!

Only 7 more days like today and I'll be back even!!!

(he says with unbridled enthusiasm.....taking the momentary opportunity to celebrate his one small daily victory after the immense daily beatings that have become common place..........even with the realization that winning the lottery may offer better odds!!)

Weeeeiiiiiii !!!

Congrats VACollector!! BAC did very well today. There may be a bit of a sell off tomorrow, but they are heading in the right direction. Perhaps people are realizing BAC is not going down the same path as IndyMac and will get through this mess.