bank of america good value?
Answers
2222 points
readytoretire answered 10 months ago …
While they are currently up almost 10% today, I would not recommend putting anything other than betting money in them. While long term they should do well, the effect of all the bailout money will dilute the value of the shares. And they will continue to suffer until the real estate market stops going down. So while they do make for some interesting short short term plays, I would wait until things settle out before deciding if the new risk/reward equation works. With a dividend yield of 25%, something has to give, and I am afraid it will not be the price going up that much.
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989 points
rvilmur answered 10 months ago …
BAC is effectively bankrupt and will require much more stockholder diluting capital infusions by the government. In taking on MER, BAC committed suicide. it is a short candidate or buy PUTs. It is down today.
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216 points
jrj90620 answered 10 months ago …
Depends on your view of the country.If you think Obama can save the economy then this would be a good speculation.If you think we end up with a weaker economy and crashing Dollar then avoid.
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3963 points
MNSL answered 10 months ago …
I think it is time to sell all weak banks and time to buy strong banks globally.
Gradually there will be recovery in the financial sector once market players take some positive actions to solve current credit mess, when uncertainties recede and when we see
recovery of consumer and business spending.
In future if banks try to lend more and more credit into unproductive areas such as housing and other non productive areas we will see one of the worst bubbles in the history.
They should learn at least now not to bet on wrong areas, not to arrange and advise on highly rise derivatives and hedges. They must be able to identity bubble stage before others. They should take responsibility to safeguard other people’s money. They should lend more and more money into productive areas to generate more and more employment to increase consumer income and purchasing power.
http://www.thestar.com/Business/article/572655
Banking industry outlook darkens
Shares in the Big Five Canadian banks rated `sell' amid losses, fears of escalating write downs
Investors ratcheted up their scrutiny of financial stocks yesterday as an avalanche of bad news ignited fresh fears of escalating writedowns and massive credit losses at some of the world's largest banks.
Big quarterly losses from Citigroup Inc. and Bank of America, along with the nationalization of Anglo Irish Bank PLC, all combined to darken the industry's outlook. In Britain, banking shares plummeted as those events sparked worries of a cash crunch at domestic lenders amid speculation of another government bailout.
The TSX financial sub-index lost 1.45 per cent. Helping sap investor sentiment was word that one analyst now has "sell" ratings on the stocks of all the Big Five Canadian banks – a rare turn of events for an industry widely lauded for being the envy of its global peers.
John Aiken of Dundee Capital Markets downgraded the ratings of both Royal Bank of Canada and Toronto-Dominion Bank yesterday, adding those heavyweights to his catalogue of "sell" recommendations. He also lowered price targets for all banks except Bank of Montreal.
