About 4 weeks ago I owned 6500 shares of BBT. My average cost was about 24.00. I bought 2000 shares at 19 and 2000 more during the conference call at 18.06 as soon as King said he intended to support the dividend strategy. If I had sold the recently purchased 4000 shares at 22.00, I would have netted about 14,000 based on the cost of those 4000 shares. My basis for the remaining 6500 would not change.
If I decided to sell 4000 of the shares that had an average cost of 24, I would not have made a profit (in fact a loss of approx 8,000) but I would have reduced my basis to about 20.62. If I recalculated my basis as a result of buying the 4000 shares (but before selling any shares),it would become approximately 21.90 a share. Thus I could make a profit of $400 on the transactions of ubuying/selling 4000 shares and still reduce my basis.
However, it is misleading to crow about making the spread between the recent purchase price and the recent sales price and still maintain I have reduced my basis.
There appear to be some on this forum who believe that BBT management is hiding something. They clearly believe that BBT has been as irresponsible and surreptitious as other banks. I think otherwise. I think they conducted business above par.
Unfortunately, that may not be enough. The problems now are growing beyong subprime and faulty lending. Deleveraging is causing almost all assets to be reduced in value. Solid loans appear threatened as job losses mount.
BBT may be in jeopardy not because it is a bad bank but just because it is a bank.