BAC-WT - Bank of America Warrants

[bmichaud]

way to jinx it Eric haha

 

Al, exactly to your point Kiron Sakar over at The Big Picture has some interesting thoughts on the Germans accepting a higher rate of inflation and the likelihood of much great ECB involvement. See: http://www.ritholtz.com/blog/2012/05/a-change-in-ez-policies-is-coming/

 

 

[PlanMaestro]

Interesting observation - nothing else to say.

 

Re Euro fears.  I dont get what everyone is excited about.  It strikes me that Eu austerity is toast as a concept.  A whole combination of factors such as Merkel losing an important election, France's new anti- auterity stance, Greeces rebellion, suggest to me that the floodgates will open soon with stimulus programs.  The EU cant help but learn from the US success.

 

Just for fun:

 

 

'Never underestimate the power of human stupidity.'

'To the fool, he who speaks wisdom will sound foolish.'

'Never attribute to malice that which is adequately explained by stupidity.'

'Cock-up before conspiracy'

'Any man can make mistakes, but only an idiot persists in his error.'

‘Insanity is doing the same thing over and over, and expecting a different result.’

'The difference between genius and stupidity is that even genius has its limits.'

'Anything that can go wrong, will—at the worst possible moment'

'The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts.'

'Only two things are certain: the universe and human stupidity—and I’m not certain about the universe.'

'Let us be thankful for the fools. But for them the rest of us could not succeed.'

 

 

[ERICOPOLY]

way to jinx it Eric haha

 

No kidding.

 

For a moment there I was just giddy that BAC and IWM were down the same amount (I bought puts on IWM to hedge). 

 

Well at least my MBI position is holding up.  Something has to outperform the hedge

 

[Uccmal]

 

 

Just for fun:

 

 

'Never underestimate the power of human stupidity.'

'To the fool, he who speaks wisdom will sound foolish.'

'Never attribute to malice that which is adequately explained by stupidity.'

'Cock-up before conspiracy'

'Any man can make mistakes, but only an idiot persists in his error.'

‘Insanity is doing the same thing over and over, and expecting a different result.’

'The difference between genius and stupidity is that even genius has its limits.'

'Anything that can go wrong, will—at the worst possible moment'

'The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts.'

'Only two things are certain: the universe and human stupidity—and I’m not certain about the

universe.'

'Let us be thankful for the fools. But for them the rest of us could not succeed.'

 

Lol -

[Grenville]

Important to see how this plays out re Countrywide:

 

"Ally Hopes to End Mortgage Woes With ResCap Bankruptcy"

http://www.cnbc.com/id/47411694

[racemize]

Insider buys at AIG and BAC:

 

http://community.nasdaq.com/News/2012-05/weekly-top-insider-buys-msft-bac-aig-spg-oks.aspx?storyid=141019

 

[racemize]

so, I know I'm late to the party on this one and there is still some speculation on the anti-dilution parameters of the warrants, but for those that have given it some thought, will those anti-dilution clauses kick in when Buffett exercises his warrants?  Perhaps his are a longer dated version and he'll dilute after the warrants are used though?

[twacowfca]

so, I know I'm late to the party on this one and there is still some speculation on the anti-dilution parameters of the warrants, but for those that have given it some thought, will those anti-dilution clauses kick in when Buffett exercises his warrants?  Perhaps his are a longer dated version and he'll dilute after the warrants are used though?

 

Buffett's warrants are longer dated.  Do his warrants also have antidilution protection?  It would be surprising if they didn't.

[meiroy]

The EU cant help but learn from the US success.

 

Could you elaborate on that? I'm sensing there's some sarcasm there just not sure to what degree...

[alertmeipp]

The EU cant help but learn from the US success.

 

Could you elaborate on that? I'm sensing there's some sarcasm there just not sure to what degree...

 

He is talking about massive QE.

[meiroy]

The EU cant help but learn from the US success.

 

Could you elaborate on that? I'm sensing there's some sarcasm there just not sure to what degree...

 

He is talking about massive QE.

 

Right, does he see it as not really a success/short term success/long term success...

[Uccmal]

No sarcasm.  EU is where US was about two years ago, but stalled.  Individual countries cant devalue their currencies, making austerity at the country level useless.  The EU is a huge free trade zone, and needs to be further amalgamated so the EU as a whole issues bonds to back the entire system.  What they have been doing to now is half baked.

 

Massive QE is the only option that remains, and seems to be the only way to exit a balance sheet recession. 

 

Apologies, nothing really to do with BAC. 

[alertmeipp]

No sarcasm.  EU is where US was about two years ago, but stalled.  Individual countries cant devalue their currencies, making austerity at the country level useless.  The EU is a huge free trade zone, and needs to be further amalgamated so the EU as a whole issues bonds to back the entire system.  What they have been doing to now is half baked.

 

Massive QE is the only option that remains, and seems to be the only way to exit a balance sheet recession. 

 

Apologies, nothing really to do with BAC.

 

It does, us banks shrink their balance sheet,eu haven't. Who is going to get cheap assets

[ERICOPOLY]

Interesting observation - nothing else to say.

 

Re Euro fears.  I dont get what everyone is excited about.  It strikes me that Eu austerity is toast as a concept.  A whole combination of factors such as Merkel losing an important election, France's new anti- auterity stance, Greeces rebellion, suggest to me that the floodgates will open soon with stimulus programs.  The EU cant help but learn from the US success.

 

BAC's volume was also rather light today at only 67% of average volume.  All of the other large banks (JPM, WFC, C, even USB) had large (above average) volumes.  For nearly three hours BAC was significantly outperforming even USB.  If you remember (how can we forget) last Summer/Fall BAC was the most volatile of the bunch.

 

Well, enough about that.

[sswan11]

USB ahead of BofA, C in 1st qtr mortgage lending.  Wells Fargo had market share of 33.9%!!

 

http://www.trefis.com/stock/usb/articles/120794/u-s-bancorp-beats-bofa-citi-in-q1-mortgage-lending/2012-05-15?from=email%3Anotd

 

U.S. Bancorp (NYSE:USB) overtook banking giants Bank of America (NYSE:BAC) and Citigroup (NYSE:C) to become the third-largest mortgage originator in the U.S. for the first quarter of the year. [1] Data compiled by Inside Mortgage Finance details the performance of mortgage lending divisions of the country’s largest banks in Q1 2012 – a period over which mortgages worth $385 billion were originated. Wells Fargo (NYSE:WFC) continues to rule the roost with an unrivaled market share of 33.9% followed by JPMorgan Chase (NYSE:JPM) with a 10.6% market share. U.S. Bancorp’s share stood at 5.2% – indicating that the top three banks were responsible for nearly half of all mortgages given out over the period.

 

We maintain a $34 price estimate for U.S. Bancorp’s stock, about 8% higher than its current market price.

[benchmark]

I have some jan 13 10 calls that has gone down quite a bit lately :(

 

I know the board has some option experts, how do you decide to unwind a position? (I still believe BAC will go back up, but timing is a bit tricky...)

[Uccmal]

I have some jan 13 10 calls that has gone down quite a bit lately :(

 

I know the board has some option experts, how do you decide to unwind a position? (I still believe BAC will go back up, but timing is a bit tricky...)

 

Yeah, Its a bit torturous right now.  At a certain point they lose so much value, that I will let them ride.  I only have a handful of 2013s left (7.50).  All the rest of my holdings are 2014s.  I wont likely buy anymore 2014s now because its getting too tight for my tastes & I have a significant position.  I can wait for the 2015 s to arrive which is coincident with tax loss selling in November, if things dont turn around. 

 

BAC has alot going for it.  While the stock can certainly go lower, sooner or later it will recover.  The Big US banks are in an optimum position to buy up distressed assets.  BAC just bought a 600 m piece of something last week - I think it was Maidenlane3.

[ERICOPOLY]

I have some jan 13 10 calls that has gone down quite a bit lately :(

 

I know the board has some option experts, how do you decide to unwind a position? (I still believe BAC will go back up, but timing is a bit tricky...)

 

Down to 30 cents now... too late to buy canned food with it.  Maybe some dried beans from the bulk food section.

 

You could always write the 2013 $11 strike call for 20 cents and try to make 10x your money on the 10 cents that you leave on the table (if the stock hits $11+ at expiration).

 

Then you could use your 20 cents of cash and buy some 2014s -- or do whatever you choose with it.

 

Writing the covered calls is always better when the stock is up a lot higher than now, but I presume that's not the advice you want to hear right now.

[tombgrt]

I'm actually starting to look at the 2014's. I might switch my common for the $10 strike price '14 but keeping the same 'notional upward potential' so that I can free cash for other things. This price is ridiculous but I fear 17 months is too short. Another thing is timing; can this thing really go back to $5 without extreme escalation of problems in Europe?

[value-is-what-you-get]

Meanwhile, as manic depressive alcoholic Mr Market spews out bids, the value creators at head office continue asset sales and stick to the plan. 

 

http://www.reuters.com/finance/stocks/BAC/key-developmuents/article/2542759

 

Suppose they get the $2billion.  That's $0.20 per share in value.  As the division oversees 1/22 of the wealth management business of BAC (the particular part for sale principally located in Europe - meltdown pending, Asia not including Japan - hard crashlanding imminent etc no less!) the private market is willing to pay this amount for 1/22 of the business.  That means that to a private buyer, the current value of the wealth management division alone is around $4.40 per share.

 

It's a great demonstration of the nature of Mr. Market.

[nkp007]

Meanwhile, as manic depressive alcoholic Mr Market spews out bids, the value creators at head office continue asset sales and stick to the plan. 

 

http://www.reuters.com/finance/stocks/BAC/key-developments/article/2542759

 

Suppose they get the $2billion.  That's $0.50 per share in value.  As the division oversees 1/22 of the wealth management business of BAC (the particular part for sale principally located in Europe - meltdown pending, Asia not including Japan - hard crash landing imminent etc no less!) the private market is willing to pay this amount for 1/22 of the business.  That means that to a private buyer, the current value of the wealth management division alone is around $11 per share.

 

It's a great demonstration of the nature of Mr. Market.

 

Well said. Hopefully this is the once in a generation opportunity we've been waiting for.

[sswan11]

Negative Motley Fool article:

 

http://beta.fool.com/mhenage/2012/05/17/bank-america-earnings-behind-headlines/4670/?source=eogyholnk0000001

[enoch01]

Meanwhile, as manic depressive alcoholic Mr Market spews out bids, the value creators at head office continue asset sales and stick to the plan. 

 

http://www.reuters.com/finance/stocks/BAC/key-developments/article/2542759

 

Suppose they get the $2billion.  That's $0.50 per share in value.  As the division oversees 1/22 of the wealth management business of BAC (the particular part for sale principally located in Europe - meltdown pending, Asia not including Japan - hard crash landing imminent etc no less!) the private market is willing to pay this amount for 1/22 of the business.  That means that to a private buyer, the current value of the wealth management division alone is around $11 per share.

 

It's a great demonstration of the nature of Mr. Market.

 

Well said. Hopefully this is the once in a generation opportunity we've been waiting for.

 

I really like Moynihan, and have to be careful not to put a halo around him.

 

I have been adding aggressively recently.  This volatility has been wonderful.

[ERICOPOLY]

On Monday we will have a new BofA presentation webcast:

 

May. 14, 2012-- Bank of America Chief Executive Officer Brian Moynihan will present at the Deutsche Bank 2012 Global Financial Services Investor Conference in New York on Monday, May 21, 2012 at 2:30 p.m. ET

 

A live audio webcast of the presentation will be accessible through the Bank of America Investor Relations Web site

 

http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-newsArticle&ID=1695615&highlight=

 

[ERICOPOLY]

A couple of questions:

 

How low did the BAC "B" warrants trade last December? 

 

How high did they go for at the peak in March?