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Bank of America Corporation Message Board

  • devindavis42 devindavis42 Oct 7, 2008 11:02 PM Flag

    Enough of the Panic!!

    Ya know I often reads these boards for chuckles but after seeing so many negative and misinformed posts I thought I should clear a few things up for people.

    First off, there are negatives that I will not go into because everyone already knows them. LIBOR, TED, Short ban lifted, etc. However, there are a lot of positives here that people are overlooking.

    This bank made money this past quarter!! I know that $.15 a share is nothing to scream about, especially in a stock that closed today at $23.77 ($22.50 AH)and is not a growth stock. But still making money is something most banks have not done since last year. Look at C for example. The bank has positioned itself to be the biggest player in the financial services industry when we come out of this mess (which will be way way sooner than everyone thinks!). They may have had a hard time raising capital today, but they did and raising the $10B is a very good thing. If additional capital is needed I believe they have the right to sell their stake in a major Chinese bank sometime in the near future. I believe their investment was valued in the $10-12 billion range early this summer. It should still be a decent amount even now with the global financial industry in shambles. The bank will be one of the few banks able to make decent sized loans over the next 6 months even in this "damned disaster"! Most importantly the Govt. will not allow this company to have the chance to fail. They will pull out all the stops to avoid another major bank failure, especially one of this size. Although, this will not happen anyway, because BAC is not in that much trouble. What we are witnessing is a global panic that has is beyond rational now. Odds are this thing will settle itself out within 6 weeks. I know that sounds crazy, especially with TV personalities claiming this is the next Great Depression and it could last for 5 years. However, weren't these the same people who were saying the great commodities bull run was in the 2nd or 3rd inning just as recentley as 2 months ago? Thank god I stayed away from MOS, POT, HK, CHK, etc. My point is that these so called experts are consistently wrong and all they do is jump on the bandwagon over and over. Hence, Cramer telling everyone to sell after the DOW was off 3,000 from its highs. Now he says he knew it was coming and how people should have listened to him, geesh! Anyways there is a lot of value here and I think the positives outweigh the negatives 6 months out. I think we could see 15 in the next month, but sooner or later the govt. is going to do something right (even if they have to lie) and this whole market will start moving. It is more important now than ever with Baby Boomers retirements at stake. Also, I know everyone knows it but I doubt Buffett would be buying right now if he expected the market to continue to fall into oblivion. Also, The king of bears Bill Ackerman has recentley warmed up to this market as well.

    I know I will probably get flammed for this post, but someone had to state some positives. The truth is this company will not fail and although they may take more beatings in the weeks ahead, no one can deny this is a great opportunity, excluding the possibility of a nationalization of all US banks ala Sweeden. I think I will take my chances though!

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    • I have to agree with you. My cue Cramer is all over TV with his stupid prediction.
      I shorted SBUX ahead of earnings a couple of years ago, because I thought that their expansion into China and India was a sign of desparation. I shorted at like $35, figuring it will break $30. That bald moron had a call after the close that SBUX is going to be huge, etc... Then I got squeezed for $5 on the trade. I basically covered much better, but I wish I still held SBUX short. I figured the fair price was under $18, and if things turned bad, it may go under. It had like 20 year run, and had mad following and a reputation for destroying the shorts. I had a great entry if this idiot didn't drive his herd into the scared long friends of his that also saw an immediate need to unload. The stock should have opened down on that day and continued unabated down. The real earnings were horrendous. It was a headline beat on flat revenue and unclear plans for further growth. In a normal situation, the stock would have gotten killed. People were trying to unload before, but they saw they had no out. Then comes Cramer with his call.
      What it taught me is when I see something that Cramer is passionate about, and get replays on CNBC for a few days, and the move was bigger then anticipated, it means the guy was herding lemmings to cover up his GS friends, or someone who paid him. Him palying on CNBC all the time means that he needs waves of sellers from the lemmings. Why, there are millions of explanations. What will happen, he will be spectacularly wrong. Wrong on the ORDERS of magnitude. Some one is magnifying the sell off.
      Given how long the armageddon was pitched, and how the market behaves now. I would say we are preparing for the beggining of a real bull market unlike the one we've had from 2003-2007. When the guy is right off the bat it's not a bad call, it's an absolutely wrong and terrible call that will make his followers lose tons of money in a matter of a few weeks for a few days of instant gratification.
      While I agree if you continue on the path we are on now, it will not end well, but things change and change rapidly. Banking crisis now is not the end of the world, and in reality is not even a reson for recession. The current system has so many tools of battling panic and liquifying banks, that we will have minimal impact on real economy. Yes housing will be bad, but profitable businesses will do much better after all this mess. We actually will come out better and with less national debt after this crisis, and our govt will make a fortune from buying all those fixed income assets like mtgs and cp at those prices while funding at trsry yields. What it really feels like is liquidation by somebody huge and the street is forcing to pay ridiculous prices, and actually want to inflict max pain. It's not a structural issue. The crisis in financial markets is practically fixed, and now they stop spreading the panic to Main Street. We not only will come out of it, but we will be better then before where people "invested" in the houses. People will invest in some innovation that will make real windfall money, not paper speculation on crap. You all will be very surprised. When the market falls like this, it's the end, not the beggining. It's a correction with a solution already in place.

    • thanks mate , you fixed my head in few minutes.
      no more negativity...
      only positivity...
      no more negativity...
      only positivity...
      no more negativity...
      only positivity...
      no more negativity...
      only positivity...
      no more negativity...
      only positivity...
      no more negativity...
      only positivity...
      no more negativity...
      only positivity...
      no more negativity...
      only positivity...

    • you have some good comments and remarks but there is 1 thing that you seem to be overlooking and that is saying the dow cant or wont go below is crazy.the dow could go to 2-3000 if there is enough people pulling money out and inst. sorry but jmp,c,bac,and many others cant buy every single share of every stocks.they dont have enough money.you need to wake up and see the real world.ive been saying this for almost a year that there would be a world wide res. or depression.you think inst. investers are going to jump in.they are the ones selling.

    • They keep buying toxic assets and now it is coming back to haunt them. The now need to raise capital !! Frist there is CFC, a powerful systemic toxins that can quench their breath.. Now they add Merill Lynch... cyanide that they absolutely can't swollow..

      Your dream scenarios of them being the largest financials service provider in the US and potentially worldwide simply mean that they are the largest holder of toxic assets in the world. Who can they provide financial services to when markets worldwide have collapsed ?

      Nobody in their right mind should buy in to their secondary offering at $22 a share..

      BTW, Leh did a secondary offering of $6 billion at $28.. ooops


      Mer did a secondary offering at $25... oh oh..

    • Let the panic continue! I am beginning to reinvest my 401K in this market having been all cash for the past couple of years. So far, I'm up to a big 15% in equities and need a few more days of panic selling to really "wet my beak".

      Thanks to all of you dopes who are selling into the malestrom. I will get rich on your backs.

      • 1 Reply to midwest_trader
      • I wil agree that some opportunities are being created in this market, but BAC is not one of them. Factor in the dilution, absorbing MER and CFC, continued strains on BAC's asset base,its poor earnings, its even worse earnings prospects, and the fact that its PE is way above industry average, and I am hard pressed to value BAC at much more than single digits. It may not get there in a day or even three months, but I do think we will see a print below $10 before all is said and done.

        In similar market explosions (Japan post 1989, Asia 1997, NASDAQ 2000, China 2008) eventual market declines reached 70%. The Dow is far from that level, yet the scope of the problem exceeds any of those previous crises. There's plenty more to go over the next year or two as this whole debt bubble unwinds.

        The consumer is in a state of shock. They won't be spending for a long time. Housing will be years recovering, so all the business BAC thought it would get by purchasing CFC is a distant dream. CDB, if it could be sold, would fetch a portion of what BAC thinks it is worth, as liquidity in China has dried up. The Chinese banking system is insolvent, and that news will be on the front page within three months, after we get over Iceland, European banking, etc.

        So many people are still thinking this is all just a short term problem and that all will be normal soon, or the government will find someway to stem the flow. What bullets does the government have left that it hasn't already shot? This problem is huge. Massive. Like nothing the world has ever seen. Even Buffett has never seen anything like this. The world overshot on the upside for many years. It could do the same on the downside.

        Yes, opportunities will abound. Are they there yet? Possibly. This first wave of destruction may be a day or so from completion, but it will not be the last one. Rallies should still be sold. There are other problems out there waiting for their own attention, such as the Chinese banking system, or property in China, Hong Kong, Singapore, Australia and the rest of Southeast Asia. Russia is already getting attention, but it will get worse there. These are all the folks who have been financing the US deficits. They will be on a buyers' strike out of necessity.

        Cash is and will remain king for the next few years.

 
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