1) Bought back the 200 Sept. 3-strike naked puts at the exchange minimum of $1 each. Net cost of $200 as there are no commissions on buybacks of $5 or less. The naked puts had been sold a week ago for $6 each which brought in $1,055 after commissions. Therefore, profits came to $855 on the $11,400 cash deposit which was 7.5% for the one week.
2) Bought back the 200 Oct. 2-strike naked puts for $2 each. Net cost of $400. The options had been sold two sessions ago fot $6 which brought in net proceeds of $1,055. Therefore, on the $11,400 cash deposit, profits of $655 came to 2.85% per SESSION.
08/25/2011 09:37:59 Bought 15 BAC Sep 17 2011 3.0 Put @ 0.01 -15.00
08/26/2011 11:23:12 Bought 200 BAC Oct 22 2011 2.0 Put @ 0.02 -400.00
08/26/2011 11:54:37 Bought 185 BAC Sep 17 2011 3.0 Put @ 0.01 -185.00
By saying that BAC had less exposure to European travails than most other banks, I naturally meant in terms of total loans. It turns out that only 1.85% of BAC's worldwide loans are in the PIIGS coutries, that 90% of even those loans are not to the countries themselves but to individual companies and that they hold credit-default swaps. In many many cases, loans to the top corporations in a shaky nation are going to be far less risky than loans to the nation as a whole.
80% of my BAC investments are specifically in FOUR-strike naked puts expiring in just two to three months and those puts are easily rollable at a premium if necessary to something like the May 3's. In order for the stock to go that low, there really would need to be a bankruptcy or imminent filing. And that's just not about to happen with a company having such a solid balance sheet.
I'm actually sorry that Buffett stepped in because I wanted to get in more writes at such mouth-watering prices as what were seen on Tuesday when November 3's were at $30 bid per contract..
Wrong again, as always.
My point was the only C has greater exposure to the Eurozone zombies, yet you posted this lie, after having been repeatedly shown its untruth:
"Few American banks have LESS exposure to European travails than the Bank of AMERICA."
The more you capitalize, the more you lie.
Your percentages are also wrong, since you use the wrong terms both above & below the line.
You also of course fail to consider the house of cards effect, with so many of BAC's other accounts at risk from exposure to bad debt.
If there is any sector you know less about or understand less than pharma, it's clearly finance.
Buffett knows no more what's on BAC's balance sheets than does anyone else.
I have no idea why you would post a link to that article which only proves MY point - certainly not yours. Here is the part pertaining to BAC:
Bank of America (NYSE:BAC), the biggest US bank, said yesterday it had a $16.7 billion exposure to the five countries at the end of June, including loans and leases. Included in the total is $15.2 billion of “non-sovereign” exposure. The Charlotte, NC based bank has purchased credit-default protection of $1.77 billion as a hedge against potential losses, according to its most recent filing.
Value Line shows that in its most-recent quarterly 10-Q filing with the SEC (through 6/30/11), the bank shows total loans of $903.9B. I mentioned that only 7% of that was foreign and obviously much less than the 7% would be to eurozone countries.
And now you have confirmed that in spades by showing that only $16.7B of BAC's loans are to the PIIGS countries. $16.7B out of $903.9B is only 1.85% of total worldwide loans. Moreover, BAC has credit-default swaps against some of those loans while other U.S. banks weren't mentioned as having CDS's.
$16.7B isn't much to a behemoth like BAC but even so, they do have those CDS's and not exactly every loan to the PIIGS is going to end up defaulting.
Instead of just looking up references, why don't you try and UNDERSTAND what's in those articles. Do you really think you score any points by showing me articles proving what I am saying? So stupid.
By the way, BAC said according to the article that $15.2B of the $16.7B exposure was "non-sovereign." In other words, 90% of those loans were to individual COMPANIES in those countries and not to the countries themselves. So even if the countries as a whole should default, it sure doesn't mean that every individual company is going to refuse to make good on its debt obligations.
By the way, one thing about Buffett is that he will ONLY invest in companies with SOLID balance sheets. He is NOT one to take risks in overleveraged companies, etc. So if he's getting involved in BAC and to even a greater extent than he did in GE, you KNOW he thinks that BAC's balance sheet is solid and without a lot of risk.
That hugely understates BAC's exposure to the Euro debt crisis, since it also is exposed to the French, Swiss, German, British & Austrian banks in dire straits due to PIIGS loans. Ditto relationships with other US & foreign banks similarly in trouble due to the Eurozone collapse.
Alan is simply incredibly stupid, ignorant, lazy & crazy not to understand this stubborn fact.
Outdated, as always. It's closer to 8% for the five PIIGS countries alone, but only an idiot would look only at that number, since much of the rest of BAC's books are also threatened with bad loans.
More importantly, in terms of absolute number, that's the second highest exposure of all US banks, after only C.
Quit lying & quit relying on such worthless bird cage lining pulp as Value Line & Kiplinger, relics of the '60s that weren't even much use back then.
I have subscribed to Value Line for decades and one reason why I continue to scubscribe is that they do have very good fundamental research.
It its most-recent quarterly update of BAC which came out just LAST WEEK, BAC was shown as having only SEVEN percent of its loans outside the U.S. And even of that mere 7%, not exactly every loan was to Eurozone countries either.
It's just imperative to know the true facts and THOSE are the facts. Spin them any way you want. I'm as successful as I am because I really and truly do my homework and I can separate facts from fiction. Within the last three weeks, I QUADRUPLED my involvement in BAC and I'd never do that without finding out the key facts for myself.
While others were absolutely panicking, I was diving for the falling knife and throwing good money after bad. I had the courage of my convictions and now you see me raking it in. It's hardly anything new for me - it's what I do. You saw me do it with Tyco, then Pfizer and now BAC. Hey - SOMEBODY has to make money in these companies - why shouldn't it be me?
You have already repeatedly been shown the sickening extent of BAC's involvement with Europe, which no one knows in full, but which is among the highest of all US banks, totally contrary to your persistent lies.