Posted: 11/14/2011 11:45:29 AM EDT
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Confident that BAC is a strong buy at $6.05 right now. Just wanted to state it publicly.
ETA: Changed title |
| When the last guy posted about buying at $7 I stated that was still too high. For the last months and for the months to come, it's a speculators (day traders) stock. I think $6 or under will be a very good deal it you can hold it 10 years. BAC will see $40+ again just not anytime soon (i.e. years from now) |
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When the last guy posted about buying at $7 I stated that was still too high. For the last months and for the months to come, it's a speculators (day traders) stock. I think $6 or under will be a very good deal it you can hold it 10 years. BAC will see $40+ again just not anytime soon (i.e. years from now) Once again, why? I'll admit that I only have sort of an idea what I'm talking about but that just doesn't pass the logic test. At $40 per share, BAC would be the largest company on the planet by market share based on 10.14B shares outstanding. Does that sound right to you? Are you considering the fact that BAC only had only 4B-4.5B shares outstanding pre-crisis when they were in the $40+ range back in '05-'07? There has been very heavy share dilution since then as more shares have been issued. $40 per share today would make the company worth more than TWICE what it was at it's peak. |
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2.8% increase (6.22/6.05). 33+% on my BAC call options (bought at .12, sold at .16)
Currently holding puts on BAC after selling calls immediately rolled over into put options. I was getting ready to liquidate when it was tickling $6.20 all afternoon. Waiting for it to break $6.24 but thankfully it reversed and headed south right before closing. BAC closed today at $6.13. Still bearish expecting it to head south tomorrow. But it is having significant resistance around $6.00. If it breaks, should go to $5.83 fairly quickly. A lot of volatility coming from the EU. I don't expect any positive news tonight from the EU. * Tuesday, November 15, 3:28 PM "Today we've seen probably the most worrying day of the crisis so far," writes Mike Riddell, as the contagion spreads to France which "sees a full blown run on its debt," the 30 year yield climbing to 4.43% (against Germany at 2.45%). A debt downgrade is near as French CDS are past the point at which Ireland and Spain received their first cuts. This didn't seem to affect the markets today. It probably will tomorrow; I am putting my money on it. I am however nervous that it might not go my way tomorrow. 10YR ITA, Keep an eye on this. If it heads back below 7 then the financial sector might rally again tomorrow. But again, I am not expecting it to go down unless the ECB changes policy since we already had a change in figure head for ITA. Also watch for Spain's as it is a MUCH bigger problem for the US and EU then Italy as the size of their GDP. http://www.marketwatch.com/investing/bond/10YR_ESP?countrycode=ES&link=MW_story_quote |
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When the last guy posted about buying at $7 I stated that was still too high. For the last months and for the months to come, it's a speculators (day traders) stock. I think $6 or under will be a very good deal it you can hold it 10 years. BAC will see $40+ again just not anytime soon (i.e. years from now) Once again, why? I'll admit that I only have sort of an idea what I'm talking about but that just doesn't pass the logic test. At $40 per share, BAC would be the largest company on the planet by market share based on 10.14B shares outstanding. Does that sound right to you? Are you considering the fact that BAC only had only 4B-4.5B shares outstanding pre-crisis when they were in the $40+ range back in '05-'07? There has been very heavy share dilution since then as more shares have been issued. $40 per share today would make the company worth more than TWICE what it was at it's peak. $40? Doubtful. $20? Maybe (5-10 years). $10-15? Sure, but not for a while and if most things turn out okay. Optimistically, I could see $10 in a year if things in EU settle down and businesses spend their cash pile (employment goes up) and consumer confidence increases. But we are seeing a paradigm shift in the EU and their country's sovereign power. This is scary because will the EU wait until a meltdown for them to change. Looking at Greece, I am thinking yes. Even Italy appears to be too late. Even if the politicians want to pass austerity measures, they will be replaced by others that will continue their indebtedness. That sadly goes for the US as well. Even in good years we were running a deficit. BAC book value is at $22 but this is with their 'special math' and no one knows how they value their derivatives or how they marked down their mortgages. I do like the steps they are taking in raising capital but I did not like the terms with Buffet (6%!). I think this was more of a publicity stunt where Buffet was getting a sure thing (preferred stock) to create confidence in the common stock. I think it was a smart play to get rid of its exposure to China (CCB). I think Chinese construction is in a bubble (take a look at some of the construction for the sake of construction; large empty malls, empty sky risers, etc) and BAC needs no business in a Chinese construction bank until they shore up their problems stateside. I get this limits future gains but they need to worry about now. But China has plenty of our money to keep their bubble inflated so there is no telling how big or how far it will go. If you want international then go with C. In conclusion, near-term financials are scary with the uncertainty from the EU and that means volatility which traders can make money and investors should be sitting on the sidelines until it clears up. I am just trying to be right more than I am wrong and play the volatility. If you want safety then I would play CLX, CL, PG, KO, JNJ, milk the dividend and sell options way outside the money. But there are currently NO safe plays at the moment, just modest safety. Discuss. |
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Reversing position again. I am now long.
Sold puts when BAC was at 6.03 and bought calls with the proceeds. I like the resistance I am seeing at $6 and how the ECB is changing policy like I stated yesterday. If the mortgage numbers are good THU (?) then this should go up a little. Here is a recap: Buy @ 6.05 (Mon) Sell @ 6.22 (Tue) 2.8% movement (call options .16/.12 for 33.3% profit) Buy @ 6.03 (Wed) 3.15% movement (put options .11/.08 for 37.5% profit) Up over 80% in three days although it just takes a few bad calls to give it all back... I am now in a longer term options (BAC 05/19/2012 C 7.000 @ $.66) that will limit the significant changes in price. I think I might just leave them in this for the holidays with stop limits in place. If it breaks $6 then I will liquidate immediately and reenter when I see a reversal. |
| With BAC refusing to go below $6 regardless of the rest of the market has me believing there is a big buyer at 6 and in big quantities (notice the volume). Looking at the 13F, it appears the big players are talking down BAC in public, but buying the discounted shares privately. |
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It is having a hard time breaking $6.
15:23:29 $ 6.01 100 15:23:29 $ 6.01 100 15:23:29 $ 6.01 100 15:23:28 $ 6.005 100 15:23:27 $ 6.01 2,000 15:23:26 $ 6.009 2,000 15:23:25 $ 6.01 100 15:23:25 $ 6.01 100 15:23:24 $ 6.01 100 15:23:24 $ 6.01 100 15:23:24 $ 6.01 150 15:23:24 $ 6.0099 150 15:23:24 $ 6.01 100 15:23:24 $ 6.0099 100 15:23:24 $ 6.0089 500 15:23:24 $ 6.01 200 15:23:23 $ 6.0017 198 15:23:22 $ 6.01 1,000 15:23:22 $ 6.01 4,000 15:23:22 $ 6.01 1,100 15:23:22 $ 6.01 200 15:23:21 $ 6.0099 1,500 15:23:21 $ 6.01 821 15:23:21 $ 6.01 679 15:23:21 $ 6.01 1,121 15:23:21 $ 6.01 200 15:23:21 $ 6.01 100 15:23:21 $ 6.01 1,000 15:23:21 $ 6.01 100 15:23:21 $ 6.01 1,000 15:23:21 $ 6.01 1,000 15:23:21 $ 6.01 1,000 15:23:21 $ 6.01 500 15:23:21 $ 6.01 1,000 15:23:21 $ 6.01 800 15:23:21 $ 6.01 200 15:23:21 $ 6.01 100 15:23:21 $ 6.01 1,000 15:23:21 $ 6.01 100 15:23:21 $ 6.01 1,000 15:23:21 $ 6.01 600 15:23:21 $ 6.01 179 15:23:21 $ 6.005 700 15:23:20 $ 6.005 100 15:23:20 $ 6.009 1,000 15:23:20 $ 6.0089 1,532 15:23:20 $ 6.0089 1,039 15:23:20 $ 6.01 1,000 15:23:16 $ 6 700 15:23:16 $ 6.005 200 |
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Glad I moved into the long term options that way I was able to unwind the position without much harm. .63/.66.
I am PISSED I sold my puts this morning! They increased 60% in a matter of seconds! Oh well, with it below $6, I am going to see where it lands before I get back into it. |
| Pending developments tonight, I will look at getting back in if it drops another dime ($5.83). I think there is money to be made long-term, it is the short-term I am worried about and trying to catch the bottom. Made a beautiful call on Micron but sadly I sold my shares on the 3rd due to the jury taking forever and talking about Thanksgiving verdict. Made a small return but could of easily doubled or tripled my call options today. Thought I could jump back into it next week. I am glad for the people that bought RMBS lost 60% today, I dislike that company as all they seem to do is sue other companies. I should of shorted or had put options on that! But I was not that confident as Micron was trading significantly under its book value and I always try to make the value plays. |
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Still waiting to see where it lands.
Financials are too volatile unknown (ie EU) for options at the moment. I am getting into a more buy-and-hold stock buying mood with them if they get low enough. I bought a very small amount of RF stock at $3.68. If it levels out, I might buy the same amount of BAC @ ~$5.15. I really like C but the two big day moves to the upside are making me not buy it. If it gets back to ~$24, I might buy it. So I am currently holding a small position in RF @ $3.68. It is currently at $3.65 and bouncing between $3.53 and $3.89. If it breaks $3.50 I am out. I will probably buy the same about in C and BAC if it levels out. I will post if I make any moves. |
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I will be looking at a re-entry point. Don't bother, IMO. Even if you catch the bottom, their fundamentals are still weak. Don't chase the stock price on the way down. Give it a few months and look to see if anything's changed. If they look like a much better company in April or May, then consider getting back in as the stock price begins to climb. In the mean time, there are much better companies out there to invest your hard-earned money into. |