I had written an investment thesis piece on July 31, 2011, undoubtedly at the wrong timing. Had I known about the impending crash in which the stock took a dive to $6.31 a week later, I would have probably issued a long and strong call. But as William J. O’Neil puts it, in the stock market "There is only one side — the right side. So value investors should be more concerned with the Value (determined by Mr Accountant), not obsessed with the price (as dictated by Mr Market)."
One man's meat is another man's poison. Long-term value investors should definitely take into account their timing horizon and risk appetite. As I have concluded earlier, “Most bank analysts would opine that it is tough to perform bottom up analysis on banks due to the larger influence that macroeconomic factors have on the underlying performance of the business… BAC is indeed enticing for the more adventurous investors that don’t mind holding a highly volatile financial stock, which is poised for an uptrend. When the analysts recalibrate their earnings expectations/views and BAC's management communicates its quarterly earnings and key strategies on Oct. 17, 2011, it should catalyze the price movement, in the event BAC is stuck in a trading range-bound from now.”
The caveat is the obvious gloomy macroeconomic backdrop we are witnessing now. If investors wish to buy BAC but wouldn't wish to suffer another panic attack, they should definitely hedge their risk with options.
I will be remiss if I did not highlight the smoke signals. Paulson’s decision to halve his stake in BAC before June 30 was a prescient one. He would have unloaded the shares at low teens. See, UPDATE 3-HIGHLIGHTS-Some US hedge funds bail on Bank of America http://af.reuters.com/article/burundiNews/idAFN1E77E0A420110815
John Paulson, Dinakar Singh and David Tepper were heavy sellers of Bank of America Corp in the second quarter, eliminating or cutting their exposure before the financial giant's recent woes.
Financial stocks had been a favorite with big investors betting on a recovery in the United States, but some investors got cold feet earlier this year -- which turned out to be a good idea.
FINANCIAL STOCKS:
Based on his filing, TPG-Axon Management's Dinakar Singh eliminated his positions in Bank of America and JPMorgan Chase & Co .
David Tepper's Appaloosa Management, which had earned billions by buying battered down financial stocks, nearly halved his holding in Bank of America Corp to 10 million shares while also trimming his position in Citigroup Inc .
In the financial area, Eton Park Capital stuck by its bets and kept its positions in JP Morgan, Morgan Stanley and Bank of American unchanged.
On the upside, Barron's opined that BofA Shares Are Some of Industry's Cheapest: Report http://www.cnbc.com/id/44118535
Bank of America shares are among the cheapest in the industry despite concerns about a sputtering economy and questions whether the bank will need to raise more capital, Barron's said in its Aug. 15 edition.
"With tons of bad news priced into the stock, a few quiescent quarters may be all it takes to lift shares out of their funk," the financial magazine said.
Note: Italics copied in verbatim
Additional Note: This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.
One man's meat is another man's poison. Long-term value investors should definitely take into account their timing horizon and risk appetite. As I have concluded earlier, “Most bank analysts would opine that it is tough to perform bottom up analysis on banks due to the larger influence that macroeconomic factors have on the underlying performance of the business… BAC is indeed enticing for the more adventurous investors that don’t mind holding a highly volatile financial stock, which is poised for an uptrend. When the analysts recalibrate their earnings expectations/views and BAC's management communicates its quarterly earnings and key strategies on Oct. 17, 2011, it should catalyze the price movement, in the event BAC is stuck in a trading range-bound from now.”
The caveat is the obvious gloomy macroeconomic backdrop we are witnessing now. If investors wish to buy BAC but wouldn't wish to suffer another panic attack, they should definitely hedge their risk with options.
I will be remiss if I did not highlight the smoke signals. Paulson’s decision to halve his stake in BAC before June 30 was a prescient one. He would have unloaded the shares at low teens. See, UPDATE 3-HIGHLIGHTS-Some US hedge funds bail on Bank of America http://af.reuters.com/article/burundiNews/idAFN1E77E0A420110815
John Paulson, Dinakar Singh and David Tepper were heavy sellers of Bank of America Corp in the second quarter, eliminating or cutting their exposure before the financial giant's recent woes.
Financial stocks had been a favorite with big investors betting on a recovery in the United States, but some investors got cold feet earlier this year -- which turned out to be a good idea.
FINANCIAL STOCKS:
Based on his filing, TPG-Axon Management's Dinakar Singh eliminated his positions in Bank of America and JPMorgan Chase & Co .
David Tepper's Appaloosa Management, which had earned billions by buying battered down financial stocks, nearly halved his holding in Bank of America Corp to 10 million shares while also trimming his position in Citigroup Inc .
In the financial area, Eton Park Capital stuck by its bets and kept its positions in JP Morgan, Morgan Stanley and Bank of American unchanged.
On the upside, Barron's opined that BofA Shares Are Some of Industry's Cheapest: Report http://www.cnbc.com/id/44118535
Bank of America shares are among the cheapest in the industry despite concerns about a sputtering economy and questions whether the bank will need to raise more capital, Barron's said in its Aug. 15 edition.
"With tons of bad news priced into the stock, a few quiescent quarters may be all it takes to lift shares out of their funk," the financial magazine said.
Note: Italics copied in verbatim
Additional Note: This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.
