the dividend is safe for now which means at least the next 2 quarters. shorts will cover for now and wait to see if the credit markets get worse. I picked some up AH and I intend on buying as much as possible up to 25. I might short MER as a hedge
Don't be so trusting of a safe dividend. I have seen many many times a CEO come out one day and say the dividend is safe and three days later it's slashed in half. In many cases a CEO is a figure head and it's not until the CFO breaks it down that there is bigger problems that the tough decision are made behind the scene. If it's safe that's great but a CEO saying it's safe at a town hall meeting is by no means a guarantee. Bear Stearn's is a great example of this.
This is totally untrue. With the amount of attention givin to financials right now, every word is carefully crafted and a statement like that yesterday couldn't be reversed quickly without the sec taking a close look. What it means for the div in the medium turn is very good. What it says about the next earnings report in the short term is FANTASTIC!
LOVE THE DIV. And now that Lewis has backed it up, I feel great about my investment here. I plan on gettting a few more shares before it bounced back to high 20s. This is a buyers dream a huge solid co. with a great div that is trading as if it is on the brink.
12% div. is good, but consider what Lewis said:
Regarding the future of the U.S. mortage industry, it will be smaller than it is today. That means less income. And the U.S. economy to gradually begin to recover by the middle of next year.
I do not know where the 12% div come from???
Do not underestimate the power of compounding. Time is the most powerful weapon in an investor's arsenal. Nothing comes close to it. A $10,000 investment in BAC today will be worth $25,937 after 10 years (assuming the stock price did not change after 10 years), all by doing nothing but collecting and reinvest this 10% annual dividend.
Thats what it doesn't make sense to me. BAC is having billions of $ loss and still paying such a heavy dividend. May be Lewis just said this to calm down the investors and keep off shorties from this stock for a while.
I am waiting for it to go in high 20s again and then look for the opportunity to short.