BAC Investor Poll

[libor.plus1]

Thank you!

 

I thought I was the only one who thought dealing in BAC was more of a gamble than an investment. There are so many variables in play here, and most of them look to be on the downside. Anyone who can confidently say BAC is a good buy is kidding themselves.

 

That said, Sanjeev is right. I've been following this board for about 5 years, and never recall a stock or investment that the board agreed on this much that didn't do very well for its investors... FFH, SNS, ORH, NB, etc etc.

 

At the same time, I simply can't see the value here given all the uncertainty coming out of europe and china, not to mention on its own home turf. I can see this going to a 3 handle in about 6 months.

 

libor.plus1, when you say you think that anyone who thinks BAC is a good buy is kidding themselves, is there something about BAC in particular that you have in mind? 

 

Or do you pretty much have the view that all the financials are black boxes and shouldn't be invested in, as per the bottom answer on the survey?

 

I very much think BAC is a black box. It's one of a many dominoes that's connected to every other domino. If one of them falls (europe, china), you can bet BAC will be ruined. Investing in BAC is essentially stating that you are of the conviction that the massive, massive, MASSIVE, structural problems in Europe will sort themselves out without bloodshed. I don't know anyone who can reasonably argue this.

 

We live in a very interconnected world, and moreso banks than any other sector I can think of.

 

People on this board are talking about BAC "being well capitalized". Maybe as it relates to the CW acquisition and liabilities. But if anyone thinks BAC is well capitalized for the shitstorm that's going to go down when France loses that AAA rating... well, I guess we will see.

[OracleofCarolina]

Group wants to buy 500 million shares of BAC common at $6.00

http://www.bizjournals.com/charlotte/blog/bank_notes/2011/11/ipic-group-offers-to-buy-500-million.html?ana=RSS&s=article_search&utm_source=dlvr.it&utm_medium=twitter

 

[Kraven]

The problem that people don't realize is that if the dominoes fall, while it will certainly hurt BAC badly, it will also hurt the rest of the financial system badly.  Do people really think that BAC can fall, but life goes on as it is?  It just won't work that way.  Everyone thinks that BAC is so different, but other than the shitty Countrywide loans, they do the exact same things as C, JPM, MS, GS, etc.  Whether better or worse isn't the point, but they all do the exact same things, own similar things, etc.

[txlaw]

Thank you!

 

I thought I was the only one who thought dealing in BAC was more of a gamble than an investment. There are so many variables in play here, and most of them look to be on the downside. Anyone who can confidently say BAC is a good buy is kidding themselves.

 

That said, Sanjeev is right. I've been following this board for about 5 years, and never recall a stock or investment that the board agreed on this much that didn't do very well for its investors... FFH, SNS, ORH, NB, etc etc.

 

At the same time, I simply can't see the value here given all the uncertainty coming out of europe and china, not to mention on its own home turf. I can see this going to a 3 handle in about 6 months.

 

libor.plus1, when you say you think that anyone who thinks BAC is a good buy is kidding themselves, is there something about BAC in particular that you have in mind? 

 

Or do you pretty much have the view that all the financials are black boxes and shouldn't be invested in, as per the bottom answer on the survey?

 

I very much think BAC is a black box. It's one of a many dominoes that's connected to every other domino. If one of them falls (europe, china), you can bet BAC will be ruined. Investing in BAC is essentially stating that you are of the conviction that the massive, massive, MASSIVE, structural problems in Europe will sort themselves out without bloodshed. I don't know anyone who can reasonably argue this.

 

We live in a very interconnected world, and moreso banks than any other sector I can think of.

 

People on this board are talking about BAC "being well capitalized". Maybe as it relates to the CW acquisition and liabilities. But if anyone thinks BAC is well capitalized for the shitstorm that's going to go down when France loses that AAA rating... well, I guess we will see.

 

Fair enough.

 

I suppose that's what the Fed's stress test is for, then.  To make it clear where the big banks need to be at to make sure that they're prepared for a European shitstorm.

[libor.plus1]

The problem that people don't realize is that if the dominoes fall, while it will certainly hurt BAC badly, it will also hurt the rest of the financial system badly.  Do people really think that BAC can fall, but life goes on as it is?  It just won't work that way.  Everyone thinks that BAC is so different, but other than the shitty Countrywide loans, they do the exact same things as C, JPM, MS, GS, etc.  Whether better or worse isn't the point, but they all do the exact same things, own similar things, etc.

 

This is sort of a red-button argument: "if your investment in BAC blows up, you won't have needed the money you invested anyway because you will be hoarding shot gun shells and bottled water as you fight zombies."

 

Life will likely very well go on after the equity holders are whipped out and the government steps in to "nationalize" BAC. Essentially what they did with Citi. Citi died, shareholders got whipped out, life went on.

[Munger]

Do people really think that BAC can fall, but life goes on as it is?

 

 

From a practical perspective, the equity could easily get wiped out and life go on for the rest of us. 

 

I don't think anyone believes BAC as a company stops functioning -- if the equity gets wiped out, deposits will be guaranteed and people will be able to get their money...life will go on and a recapitalized BAC would come public again or be split up and sold to other companies.

 

I'm not predicting the equity is a $0 (although it is unquestionably a legitimate risk) -- just noting that if the equity is a $0, life could easily carry on.

 

 

[txlaw]

The problem that people don't realize is that if the dominoes fall, while it will certainly hurt BAC badly, it will also hurt the rest of the financial system badly.  Do people really think that BAC can fall, but life goes on as it is?  It just won't work that way.  Everyone thinks that BAC is so different, but other than the shitty Countrywide loans, they do the exact same things as C, JPM, MS, GS, etc.  Whether better or worse isn't the point, but they all do the exact same things, own similar things, etc.

 

This is sort of a red-button argument: "if your investment in BAC blows up, you won't have needed the money you invested anyway because you will be hoarding shot gun shells and bottled water as you fight zombies."

 

Life will likely very well go on after the equity holders are whipped out and the government steps in to "nationalize" BAC. Essentially what they did with Citi. Citi died, shareholders got whipped out, life went on.

 

Well, in the face of the European hurricane causing a relapse into recession, BAC may have to take measures that other financials don't have to, including dilution. 

 

But if BAC common actually goes down totally, which is very unlikely, it's likely that most of the other guys are going down too because the financial system will have collapsed again.  So I think you're really making a call on all financials rather than on some idea that BAC is more of a black box than any other financial.

[libor.plus1]

The problem that people don't realize is that if the dominoes fall, while it will certainly hurt BAC badly, it will also hurt the rest of the financial system badly.  Do people really think that BAC can fall, but life goes on as it is?  It just won't work that way.  Everyone thinks that BAC is so different, but other than the shitty Countrywide loans, they do the exact same things as C, JPM, MS, GS, etc.  Whether better or worse isn't the point, but they all do the exact same things, own similar things, etc.

 

This is sort of a red-button argument: "if your investment in BAC blows up, you won't have needed the money you invested anyway because you will be hoarding shot gun shells and bottled water as you fight zombies."

 

Life will likely very well go on after the equity holders are whipped out and the government steps in to "nationalize" BAC. Essentially what they did with Citi. Citi died, shareholders got whipped out, life went on.

 

Well, in the face of the European hurricane causing a relapse into recession, BAC may have to take measures that other financials don't have to, including dilution. 

 

But if BAC common actually goes down totally, which is very unlikely, it's likely that most of the other guys are going down too because the financial system will have collapsed again.  So I think you're really making a call on all financials rather than on some idea that BAC is more of a black box than any other financial.

 

Fair enough. I guess I was more focused on BAC since it's the company that's been getting the most positive attention on this board.

[Guest ValueCarl]

Eric, do you know specific retail investors with Schwab accounts who are shorting LVLT at these prices, like I do who have been shorting BAC in the mid six zone? If not, you're a liar while I am not, so that's one difference I am making between you and me already. 

 

Don't ask me how you FOOLS brought LVLT to this thread, but if you keep it up, your board host is going to banish you to another island. He created a special thread for that designed purpose, so come on over and I will debate you there assuming you understand the inner workings of that security.  I guess attacking someone because of a different opinion than your own, makes you feel smarter and stronger but you're NOT, I promise you that.  If there's a powerful force in the universe of the Banking Elite that says BAC will die, BAC will die, Warren Buffett's guaranteed preferred's or not!   

 

For anyone of you to believe that you understand what is necessary to be sure BAC's financials are not an accident waiting to devour you in the midst of continuous  rampant CORRUPTION in a system at all levels globally gone wry; is naive to be sure. I know Charles Munger hates the management team behind this company, and he said so less than six months ago. Much to his chagrin, maybe not, Warren bolstered a competitor's financials shortly after that. 

 

Then there's one of this board's favorite investors, Mr. Fifty Seven--maybe he should buy Heinz--Prem Watsa, a guy who makes Nouriel Roubini, Dr. DOOM, look BULLISH when he talks about LOOMING Great Depressions about to take place in America while extending to the globe.

 

http://www.gurufocus.com/news/146628/gurufocus-interview-with-fairfax-ceo-prem-watsa

 

 

[merkhet]

 

I know Charles Munger hates the management team behind this company, and he said so less than six months ago. Much to his chagrin, maybe not, Warren bolstered a competitor's financials shortly after that. 

 

 

Are you talking about the Munger quote during his Q&A?  This is what he said...

 

 

Look at the troubles Bank of America got into. Talk about a disgrace in terms of decision making. Of course, there are risks with these companies.

 

 

I think he was talking about the old Bank of America management team (Lewis).  Remember, there was another Bloomberg interview recently where Munger said the following re Moynihan...

 

 

"He has the right attitude, back to basics."

 

[oddballstocks]

Just a random datapoint from Fidelity from the retail standpoint

 

As of now BAC is the top transacted stock with 3198 buys to 998 sells so far this session.

[Guest ValueCarl]

Munger--talking his book if that's what you're saying--and Buffett do not hold the power or the influence to stop the RUN, if the RUN has been decided to take place at a higher level than they. Warren is secure in his investments with guarantees made behind the curtain which none of you mere mortals will ever have buying NAKED EQUITY!  >:(

 

It's a WILD SPECULATION, so go have fun with yourselves watching the sea change of psychology according to the masses tied to traditional institutions which once bound them!

 

The masses have been ROBBED in the Crime of this Century, and they're not as stupid as you smart asses think!

 

Look at my shoe shine boy eating your lunches!!!!!!!!!!!!!  ;D

 

 

[ERICOPOLY]

Eric, do you know specific retail investors with Schwab accounts who are shorting LVLT at these prices, like I do who have been shorting BAC in the mid six zone? If not, you're a liar while I am not, so that's one difference I am making between you and me already. 

 

Don't ask me how you FOOLS brought LVLT to this thread, but if you keep it up, your board host is going to banish you to another island. He created a special thread for that designed purpose, so come on over and I will debate you there assuming you understand the inner workings of that security.  I guess attacking someone because of a different opinion than your own, makes you feel smarter and stronger but you're NOT, I promise you that.  If there's a powerful force in the universe of the Banking Elite that says BAC will die, BAC will die, Warren Buffett's guaranteed preferred's or not!   

 

For anyone of you to believe that you understand what is necessary to be sure BAC's financials are not an accident waiting to devour you in the midst of continuous  rampant CORRUPTION in a system at all levels globally gone wry; is naive to be sure. I know Charles Munger hates the management team behind this company, and he said so less than six months ago. Much to his chagrin, maybe not, Warren bolstered a competitor's financials shortly after that. 

 

Then there's one of this board's favorite investors, Mr. Fifty Seven--maybe he should buy Heinz--Prem Watsa, a guy who makes Nouriel Roubini, Dr. DOOM, look BULLISH when he talks about LOOMING Great Depressions about to take place in America while extending to the globe.

 

http://www.gurufocus.com/news/146628/gurufocus-interview-with-fairfax-ceo-prem-watsa

 

 

 

A FOOL and now a liar too?  You are a loudmouth, no sense in talking over your noise.

[Guest ValueCarl]

Do you know of a specific person or people "SHORTING" like I do was the question, when you decided to turn this into a LVLT topic, LIAR!  >:(

 

   

[libor.plus1]

Did I miss something in this thread?

 

It just took a turn for the bizarre...

[bmichaud]

It got LVLT'ed that's why

[Guest]

Eric, do you know specific retail investors with Schwab accounts who are shorting LVLT at these prices, like I do who have been shorting BAC in the mid six zone? If not, you're a liar while I am not, so that's one difference I am making between you and me already. 

 

Don't ask me how you FOOLS brought LVLT to this thread, but if you keep it up, your board host is going to banish you to another island. He created a special thread for that designed purpose, so come on over and I will debate you there assuming you understand the inner workings of that security.  I guess attacking someone because of a different opinion than your own, makes you feel smarter and stronger but you're NOT, I promise you that.  If there's a powerful force in the universe of the Banking Elite that says BAC will die, BAC will die, Warren Buffett's guaranteed preferred's or not!   

 

For anyone of you to believe that you understand what is necessary to be sure BAC's financials are not an accident waiting to devour you in the midst of continuous  rampant CORRUPTION in a system at all levels globally gone wry; is naive to be sure. I know Charles Munger hates the management team behind this company, and he said so less than six months ago. Much to his chagrin, maybe not, Warren bolstered a competitor's financials shortly after that. 

 

Then there's one of this board's favorite investors, Mr. Fifty Seven--maybe he should buy Heinz--Prem Watsa, a guy who makes Nouriel Roubini, Dr. DOOM, look BULLISH when he talks about LOOMING Great Depressions about to take place in America while extending to the globe.

 

http://www.gurufocus.com/news/146628/gurufocus-interview-with-fairfax-ceo-prem-watsa

 

 

 

A FOOL and now a liar too?  You are a loudmouth, no sense in talking over your noise.

 

Eric > ValueCarl  ;)

[ERICOPOLY]

Do you know of a specific person or people "SHORTING" like I do was the question, when you decided to turn this into a LVLT topic, LIAR!  >:(

 

 

 

You are undignified.

[moore_capital54]

Anybody have any details on this IPIC Tender, seems like these guys are either a hoax or have seriously gone out of their way to protect their privacy...

 

A PE Firm comes to mind, or maybe a Sovereign Wealth Fund... Surprised nobody has picked up on this.

[merkhet]

 

Munger--talking his book if that's what you're saying--and Buffett do not hold the power or the influence to stop the RUN, if the RUN has been decided to take place at a higher level than they. Warren is secure in his investments with guarantees made behind the curtain which none of you mere mortals will ever have buying NAKED EQUITY!  >:(

 

It's a WILD SPECULATION, so go have fun with yourselves watching the sea change of psychology according to the masses tied to traditional institutions which once bound them!

 

The masses have been ROBBED in the Crime of this Century, and they're not as stupid as you smart asses think!

 

Look at my shoe shine boy eating your lunches!!!!!!!!!!!!!  ;D

 

 

I must admit, I'm not as much of a smart ass as you may think.  You said that Munger didn't like the management team.  I merely pointed out that the management team he was referring to was the old management team @ the Q&A.  The only reference -- talking his book or not -- that Munger has made re Moynihan that I could find was the quote I posted here about Moynihan getting back to basics.

 

Why so worked up?

[merkhet]

 

Anybody have any details on this IPIC Tender, seems like these guys are either a hoax or have seriously gone out of their way to protect their privacy...

 

A PE Firm comes to mind, or maybe a Sovereign Wealth Fund... Surprised nobody has picked up on this.

 

 

I saw this, but I have no more information than anyone else.  The random Travelzoo offer a few months ago comes to mind...

 

A Delaware entity search indicates that IPIC Group Ltd. was formed on October 4, 2011 of this year, but I must confess that my cyber-sleuthing skills end here, lol.

[Guest ValueCarl]

Regarding Munger and BAC, I only have the frame of reference from listening to him before Buffett made his "sweetheart deal," and what he said was unkind period. It should be duly noted that they're a competitor to their favorite bank holding, Wells Fargo, therefore the reason behind what is factually at stake in the world of finance, should be measured very carefully by those jumping on "naked equity." Refer to the newest Dr. Doom, Prem Watsa, for psychiatric help! Buffett does not own "naked equity," and has arranged for sweeteners along the way.   

 

Since when are Buffett and Munger, Capitalists at their core, not looking to KILL their competitors as opposed to offering them LIFELINES? You figure that out!

 

Munger would sue his next door neighbor in heartbeat for wearing his same "COLORS" on his home during the holidays, and trying to mimic him!

 

This is pure speculation, not unlike AIG, with respect to "too big to fail," and belief systems that the Fraudulent Reserve would bail them out come hell or high water. Indeed, that's why Buffett front ran the preffered deal for the minds of the investment public to absorb rather than hearing it was their "PRINTING MACHINE" with "INTEREST" doing it for SCOUNDRELS again!

 

I have no idea if your comments relating to Munger a second time, was before or after Buffett's investment, with an original assumption that they came after.

 

 

 

[merkhet]

I'm afraid we might be talking past one another on this one...

 

 

Regarding Munger and BAC, I only have the frame of reference from listening to him before Buffett made his "sweetheart deal," and what he said was unkind period.

 

 

I believe the frame of reference is slightly erroneous though...

 

 

I know Charles Munger hates the management team behind this company, and he said so less than six months ago.

 

 

He didn't say he hated the current management team -- he merely said Bank of America did stupid things during the crisis.  Even assuming that you could equate "doing stupid things" to "hating the management team" -- the management team is different now.  That's all I was pointing out.

 

Whether Munger is talking his book or not post-investment seems irrelevant to me. (FWIW, I'd give Munger the benefit of the doubt that if he hated the investment, he just wouldn't respond.)  *shrug*

[Parsad]

Regarding Munger and BAC, I only have the frame of reference from listening to him before Buffett made his "sweetheart deal," and what he said was unkind period. It should be duly noted that they're a competitor to their favorite bank holding, Wells Fargo, therefore the reason behind what is factually at stake in the world of finance, should be measured very carefully by those jumping on "naked equity." Buffett does not own "naked equity," and has arranged for sweeteners along the way.   

 

Since when are Buffett and Munger, Capitalists at their core, not looking to KILL their competitors as opposed to offering them LIFELINES? You figure that out!

 

Munger would sue a business owner in heartbeat for wearing his "COLORS" and trying to compete next door to him!

 

This is pure speculation, not unlike AIG, with respect to "too big to fail," and belief systems that the Fraudulent Reserve would bail them out come hell or high water. Indeed, that's why Buffett front ran the preffered deal for the minds of the investment public to absorb rather than hearing it was their "PRINTING MACHINE" with "INTEREST" doing it for SCOUNDRELS again!

 

I have no idea if your comments relating to Munger a second time, was before or after Buffett's investment, with an original assumption that they came after.

 

Carl,

 

You are completely wrong on this.  Buffett bailed out Munich Re, as well as Lloyds.  Prem just bailed out Bank of Ireland.  They have no problem bailing out their competitors, if it makes money for them and they restore the business.  Buffett is a capitalist no doubt, but his intent is to make money, not lose money.  He invested in Bank of America because he likes Moynihan...otherwise, don't you think he would have put money with Vikram Pandit if he was just interested in making a buck!  He likes Moynihan's nose to the grindstone attitude. 

 

You also made another comment in another post regarding past experience with mortgage insurers.  We bought mortgage insurers as you know, but we bought them through options and a basket of them in MPIC Fund I, LP.  We do not trade options in MPIC Canadian LP and we unfortunately bought a basket of equity.  We expected huge losses in shareholder equity when we bought them, but the magnitude that occurred was our worst case scenario. 

 

I do not have that same feeling or theories about BAC, and the margin of safety is actually significantly larger than when we bought the mortgage insurers back in 2008...double actually!  Capitalization is significantly better, they are squeezing the size of their book, and they are running off poor business and writing new business that is far better...not unlike what Fairfax had to do.  The earning power and reach of the business is terrific, and they've got a CEO who eats his own cooking and is a tireless worker.  In this case, I'm extremely comfortable buying equity and buying one single company.  I think the market reaction is incredibly wrong in BAC's case.  Like with the mortgage insurers, we are buying to a level we are comfortable with, where our other holdings will offset any possible loss if they were to occur in the worst of circumstances.  You calculate your odds of success versus your odds of failure, and you mitigate as much of that risk as possible.  That's all you can do.  Cheers! 

[Parsad]

Stick to BAC guys or I start trimming posts.  Cheers!