Bac = wtf???

[VaCollector]

I tried to attach this to an earlier BAC post where BAC stock had been discussed in depth but was not allowed soooo......here's the rest of the story.....

BAC = WTF!!!

I guess I'll have to ride it to the end....

For those not familiar with my investing prowess, here's a quick recap.....inherited BAC in late 2006, bought one-third MORE in 2007 ......and have seen my $750,000 investment errode to today's current level of just over $100,000.....

Too big to fail.....starting to think that is BS as well.....

Gotta give Brewer his due as he DID state here that if BAC was ever on the verge of going belly-up that we would have a lot worse things to worry about....not sure that we're really there yet, but BAC seems like it could be on the ropes.

Now my TRUE dilemma ~ I have recently come into a little more $$$ with the sale of some real estate ( yeahhhh....gotta take the good where you can) but I did sell considerably under market.....

I was comfortable letting those funds sit and earn a few dollars while the market continues to work things out but that was before BAC hit less than $8/sh today....

Should I double down and hope for a rebound, then cash out - at least recovering SOME of my losses.....or should I just sit tight?

FWIW I still have a hard time wrapping my head around the size of my losses....not alone I know.....

 

[REWahoo]

Should I double down and hope for a rebound, then cash out - at least recovering SOME of my losses.....or should I just sit tight?

I'd go to Vegas and put it all on black (or red). That way you won't have to live in agony for weeks/months/years wondering what the outcome will be.

Seriously, I think I'd find other investments and put my money there. No way would I put more eggs in with those cracked and runny ones in my BAC basket.

 

[Zathras]

How much of your portfolio is in BAC?
If it were my money I would spread it around some. Absorbing both Countrywide and ML could very well have been too much for them. Frankly, I have been avoiding the financial sector regardless of the company.

 

[Dawg52]

No way I would put more in it. But there is probably no way I will ever recover my losses either. So what do I know?

 

[unclemick]

Why? I mean why are you investing? - accumulation phase, distribution phase, entertainment to please the hormones?

In other words - what do you expect your investment to do?



Vanguard Total World Stock Index - if you are young and have 25 yrs to wait.

Appropriate tween area - Target Retirement Series picked by age.

And then and then - if you are a grumpy old lefthanded Curmudgeon(with certificate) who tests INTJ and are ER:

perhaps some Psssst Wellesley eh!

heh heh heh - 0 degrees on the front porch north of Kansas City. BTW - a few hundred shares of BAC in the old Norwegian widow portion of my portfolio - no idea - continue to watch and wait.

 

[Purron]

I am very concerned about Bank of America. It's astonishing to see its stock fall so low. Citigroup isn't doing much better and was at $3.70 last time I checked. There appears to be much urgency from Buch and Obama to get their hands on the other $350 billion in bailout funds and I wonder what they know that we don't know. There is a lot of news about more bailout $$ for BAC. BAC's officials must be (or perhaps should be) kicking themselves in the rear end for buying Merrill Lynch and Countrywide.

 

[laurence]

So if I'm reading this right you've lost over 80% of the investment at this point, right? Your downside is pretty small at this point (o.k., it's more than half of my portfolio but for you...) and so long as it survives, happier days have got to be ahead for it's stock price. I say put this holding in a sealed envelope ( or what have you) and put it away. Don't look at quotes for this stock for 24 months.

 

[ziggy29]

If I were heavily concentrated in BAC, I think my own BAC would be constantly high.

 

[FIRE'd@51]

I wouldn't put any more money into BAC. They have already cut their dividend by 50%, and by taking all the TARP money, they will probably be forced to cut the dividend again, possibly even to zero. Then you would have more "dead money" tied up waiting tor the stock price to recover. You have already lost a substantial amount of dividend income on your BAC holdings. Can you really afford to lose any more cash flow by buying more BAC?

 

[VaCollector]

Sorry to say laurence but it WAS over half of my investment portfolio....started at $1.2 mil...currently just over $600K.....and that is with the recent $200K cash infusion....so that's down over two-thirds!!!.....talk about retiring into a down market....I should write the book!!

...and that is with what I perceived as "doing everything right".....with my biggest flaw (according to investors on this board) being a lack of diversification...too many eggs in my BAC basket.....shoulda, woulda, coulda....

I had the monies spread out among brokerages....bought into the dips to "catch the rips".... .....and my BAC holdings were based on the BAC relationship with the other generations of my family and how well it had served each of them.....

While I know that I am not alone....the euphoria & feelings of comfort & pride that accompanied my ER in 2007 are long gone and have (quite frankly) been replaced by shame, worry and doubt about my (our) future.

I still have a lot to be thankful for....but if I am being truthful with myself, it has become much harder to see the everyday blessings with all of the financial losses that I have personally taken.....

Like most here, I try not to focus on them any more that I have to....but with the news media being what it is....it is hard to avoid at times.....

Man....this is depressing....gonna go DO SOMETHING other than sitting here feeling sorry for myself....

Thanks for your input and suggestions!!

 

[haha]

I tried to attach this to an earlier BAC post where BAC stock had been discussed in depth but was not allowed soooo......here's the rest of the story.....

BAC = WTF!!!

I guess I'll have to ride it to the end....

For those not familiar with my investing prowess, here's a quick recap.....inherited BAC in late 2006, bought one-third MORE in 2007 ......and have seen my $750,000 investment errode to today's current level of just over $100,000.....

Too big to fail.....starting to think that is BS as well.....

Gotta give Brewer his due as he DID state here that if BAC was ever on the verge of going belly-up that we would have a lot worse things to worry about....not sure that we're really there yet, but BAC seems like it could be on the ropes.

Now my TRUE dilemma ~ I have recently come into a little more $$$ with the sale of some real estate ( yeahhhh....gotta take the good where you can) but I did sell considerably under market.....

I was comfortable letting those funds sit and earn a few dollars while the market continues to work things out but that was before BAC hit less than $8/sh today....

Should I double down and hope for a rebound, then cash out - at least recovering SOME of my losses.....or should I just sit tight?

FWIW I still have a hard time wrapping my head around the size of my losses....not alone I know.....

As generic advice, be very wary about doubling down, even when there are no obvious reasons for weakness.

I don't know what will happen. It may go up, it may go down, it may disappear. I think it is hard to predict what the government will or can do.

I am sorry for your loss; that must be very painful

Ha

 

[Moemg]

....

Man....this is depressing....gonna go DO SOMETHING other than sitting here feeling sorry for myself....

Thanks for your input and suggestions!!

Sorry for your loss ! I was also into the shoulda,coulda,woulda's today . Tomorrow I'm going to the dog track for .50 friday . Admission ,hot dogs & beer are all .50 and you can not lose much with $2.00 bets . So if you feel the need to gamble do this .It is more fun than throwing money at losing stocks right now .

 

[grumpy]

Anybody have any info on whether BAC insiders are buying or selling at these very low prices?

 

[Grep]

Please don't double down on BAC. Indeed, don't do anything when you feel depressed and desperate. "Do nothing for 2-3 years" is far better advice. If you take action, it should be based not on emotions, but on as much clarity and logic as you can muster.

You might want to consider if loss harvesting from BAC into a related fund of stocks, e.g., VFH makes sense (don't ask me, I don't know). That way your fortunes are not so desperately tied to BAC, while you maintain exposure to the badly beat-up banking sector in general. A near lifetime of tax-free capital gains isn't the worst thing in the world.

But you might also want to accept that you have taken too much risk, not just in one stock, but in one sector, and diversify properly, even if that means accepting that you will never fully recover.

No-one knows what may happen, but these are dark days again, and so you could compromise and do nothing for a while, then revist your options when things are a bit better and you can view your options with more equanimity.

Best of luck.

 

[samclem]

VACollector, that has got to hurt a lot. I read in your post a desire and capability to move on and make the best of things. That is commendable and certainly the best, most healthy thing now and in the future. I hope I'll keep my head up and looking for the bright side when the fates of finance bite me as deeply as you've been bitten.

I wouldn't put more money into B of A now. Continuing to concentrate your assets there perpetuates the problem. I understand why you don't want to sell the stock you've owned there (and ridden down this far), but I wouldn't add to the pile there. I'd probably put it somewhere safe and use it for your withdrawals so you can buy time for your beaten down assets to recover.

Speaking of beaten-down assets--there are a lot of them out there. I understand the emotional reasons that it is hard to sell any of the BofA stock, as you've been hoping for a recovery. Still, you've got a lot of eggs in that basket now, and a large portion of your net worth is now tied up in the whims of govt bureaucrats and an irrational market. BofA might not emerge in its present form. Given all this, a case could be made for selling some off now and buying other beaten-down assets that aren't in the financial sector. Foreign stock, etc. You'll still benefit when the economy rebounds, but you won't be tied to the fate of this one company.

There's a saying: If you wouldn't buy a stock at a particular price, you shouldn't be holding at that price, either. Tax aspects and transaction costs aside, when you are buying or holding you are doing the same thing--you are saying the stock is undervalued at that price.

Of course, that's easy for me to say. I'm the first to admit I'd have a hard time implementing this plan if I were in your shoes.

 

[haha]

Anybody have any info on whether BAC insiders are buying or selling at these very low prices?

No activity that I can find since last October or so, and that was at prices very much higher than today's.

I remember buying and selling BAC within about 2 weeks in fall 2007. I bought it thinking it was reasonable long term hold. It bounced up, I held it in an IRA, so I thought "what the heck do I really know about this stock?"-decided little or nothing so I sold. I was very lucky, as it has been pretty much downhill ever since.

Ha

 

[youbet]

No activity that I can find since last October or so, and that was at prices very much higher than today's.

I remember buying and selling BAC within about 2 weeks in fall 2007. I bought it thinking it was reasonable long term hold. It bounced up, I held it in an IRA, so I thought "what the heck do I really know about this stock?"-decided little or nothing so I sold. I was very lucky, as it has been pretty much downhill ever since.

Ha

I did that too Ha. Twice in fact and also in my IRA. But my opinion now echos most of those previously stated. Too much risk of BAC continuting to drop especially if the Feds demand a cut or elimination of the dividend as a condition of bailout dollars.

 

[unclemick]

Anybody remember Fleet Boston and the 90's South American debt problem - that's when I started my Drip plan - time and a series of mergers - became BAC.

I done good for a long time. And then. And then - baa da bing baa da boom! Not good.

Stuff happens. I guess one binds up the wounds as best as possible and moves on. Glad I was as diversified as I was.

heh heh heh - I shall wait - since I have no tax loss but not buy more for now.

 

[laurence]

So consensus is don't sell, but don't buy any more and get diversified with the rest of the portfolio, right?

 

[unclemick]

So consensus is don't sell, but don't buy any more and get diversified with the rest of the portfolio, right?

Yep - looks that way - unless one wants to toss in (as a second alternate only) a value play with relatively high SEC yield like pssst Wellesley.

heh heh heh - sorry just couldn't resist.

 

[samclem]

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.

 

[VaCollector]

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!

 

[terminator]

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.

 

[haha]

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

 

[Bestwifeever]

I would sell.