BAC-WT - Bank of America Warrants

[ERICOPOLY]

Eric probably about 150k this morning! :)

Nice!

 

Well, whatever the dollar figure I like it when the market goes up like this.

 

[ERICOPOLY]

Fannie obviously disagrees.  If you find fault with a loan, but it paid for more than 2 years, is the default because of the economy, or because of mistakes with the loan?

 

Not enough information.

 

You need to look at all loans that have paid for 24 months and ask the following question:

 

Do the ones that are defaulting have a meaningfully higher rate of mistakes with the loan relative to the ones that aren't defaulting?

 

That's easy to prove in court (if the judge is rational).  You sample the defaulted loans, and you sample the current loans, and you look for underwriting "mistakes". 

 

Maybe the ones that have "mistakes" in underwriting fail at 4 times the rate of the ones that don't.

 

Thus, BAC (or Countrywide) still has some liability for them in a fair world where a man owns up to his mistakes and makes good with his neighbor.  But do we live in such a world?

[moore_capital54]

Eric probably about 150k this morning! :)

Nice!

 

Well, whatever the dollar figure I like it when the market goes up like this.

 

Cheers to that! We only own the commons but they are now 25% of our long exposure :) Feels like $10 dollar break coming soon

[enoch01]

Eric probably about 150k this morning! :)

Nice!

 

Well, whatever the dollar figure I like it when the market goes up like this.

 

Cheers to that! We only own the commons but they are now 25% of our long exposure :) Feels like $10 dollar break coming soon

 

I wonder if there's a virtuous "anti-dilution" cycle of people feeling more secure buying the stock because any impact from a capital raise [assumed for argument] decreases as the stock prices rises, so people feel safer buying it as the price rises.  It's the opposite of the vicious "dilution" cycle.

[Parsad]

Eric probably about 150k this morning! :)

Nice!

 

Well, whatever the dollar figure I like it when the market goes up like this.

 

Cheers to that! We only own the commons but they are now 25% of our long exposure :) Feels like $10 dollar break coming soon

 

I agree.  With the Fed announcing $40B of mortgage purchases a month...it will definitely be closer to TBV than further!  Cheers!

[Parsad]

Small case settled.  I suspect a few more settlements are coming before the year-end.  Cheers!

 

http://www.reuters.com/article/2012/09/13/bankofamerica-brief-idUSWEN738820120913?type=marketsNews&feedType=RSS&feedName=marketsNews&rpc=43

[MVP444300]

Small case settled.  I suspect a few more settlements are coming before the year-end.  Cheers!

 

http://www.reuters.com/article/2012/09/13/bankofamerica-brief-idUSWEN738820120913?type=marketsNews&feedType=RSS&feedName=marketsNews&rpc=43

 

http://www.opposingviews.com/i/society/drug-law/justice-department-reaches-settlement-bank-america-resolve-allegations

 

Very small case estimated $370 million

 

The settlement comes after an investigation by the Justice Department.  Bank of America cooperated fully with the department’s investigation into its lending practices and agreed to settle this matter without contested litigation.  The lawsuit was developed and filed by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Justice Department’s Civil Rights Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 22 lending matters under the Fair Housing Act, the Equal Credit Opportunity Act, and the Servicemembers Civil Relief Act.  The finalized settlements in these matters provide for a minimum of $370 million in monetary relief for more than 200,000 individual borrowers.

[arbcon]

I added a small position in the jan 14 calls around 5 or so ..strike is 5...on the theory that this will be the year that expense saves begin to kick in.

...not investment advice...just an observation.

[berkshiremystery]

 

Bank of America CEO Brian Moynihan supports Federal Reserve’s stimulus plan

http://www.boston.com/businessupdates/2012/09/14/bank-america-ceo-brian-moynihan-supports-federal-reserve-stimulus-plan/Sk1PgYRvabav2Oxh22upqM/story.html

 

Bank of America Corp. chief executive Brian Moynihan Friday praised the Federal Reserve’s decision to launch a new effort to pump money into the nation’s ailing economy.

 

“They are trying to get the economy moving,” said Moynihan in a brief interview. “It’s the right decision because it’s working.”

 

[berkshiremystery]

 

Bank of America: Bernanke Pullback Loser

Sep. 17th, 2012

http://www.thestreet.com/story/11705962/1/bank-of-america-bernanke-pullback-loser.html?puc=yahoo&cm_ven=YAHOO

 

Guggenheim Securities analyst Marty Mosby on Monday reiterated his "Buy" rating for Bank of America and raised his price target for the shares to $11.50 from $10.00, saying that "BAC's current discount to tangible book value per share represents the potential upside once the market decides that BAC doesn't need to issue incremental capital to fund future losses from Countrywide's residential real estate overhang issues and that these future losses could be covered with future earnings."

 

 

 

[ERICOPOLY]

 

Bank of America: Bernanke Pullback Loser

Sep. 17th, 2012

http://www.thestreet.com/story/11705962/1/bank-of-america-bernanke-pullback-loser.html?puc=yahoo&cm_ven=YAHOO

 

Guggenheim Securities analyst Marty Mosby on Monday reiterated his "Buy" rating for Bank of America and raised his price target for the shares to $11.50 from $10.00, saying that "BAC's current discount to tangible book value per share represents the potential upside once the market decides that BAC doesn't need to issue incremental capital to fund future losses from Countrywide's residential real estate overhang issues and that these future losses could be covered with future earnings."

 

It sort of seems to me like he doesn't follow Bank of America very closely.

 

Look at what he goes on to say:

 

Guggenheim's "capital analysis suggests that BAC has enough capital to pass the Basel I stress test requirement but would be short of Basel III compliance at year-end 2013."

 

The analyst "concluded from that analysis that BAC will not need to raise capital, although BAC still needs to accumulate capital as quickly as possible."

 

 

Mosby added that "until short-term rates begin to rise, BAC's earnings power is between $10 billion and $12.5 billion a year," and that the company's after-tax mortgage losses ranges will range between $15 billion and $50 billion.

[Parsad]

 

Bank of America: Bernanke Pullback Loser

Sep. 17th, 2012

http://www.thestreet.com/story/11705962/1/bank-of-america-bernanke-pullback-loser.html?puc=yahoo&cm_ven=YAHOO

 

Guggenheim Securities analyst Marty Mosby on Monday reiterated his "Buy" rating for Bank of America and raised his price target for the shares to $11.50 from $10.00, saying that "BAC's current discount to tangible book value per share represents the potential upside once the market decides that BAC doesn't need to issue incremental capital to fund future losses from Countrywide's residential real estate overhang issues and that these future losses could be covered with future earnings."

 

It sort of seems to me like he doesn't follow Bank of America very closely.

 

Look at what he goes on to say:

 

Guggenheim's "capital analysis suggests that BAC has enough capital to pass the Basel I stress test requirement but would be short of Basel III compliance at year-end 2013."

 

The analyst "concluded from that analysis that BAC will not need to raise capital, although BAC still needs to accumulate capital as quickly as possible."

 

 

Mosby added that "until short-term rates begin to rise, BAC's earnings power is between $10 billion and $12.5 billion a year," and that the company's after-tax mortgage losses ranges will range between $15 billion and $50 billion.

 

Yeah, I thought that was peculiar as well.  I've learned to ignore analysts...kind of like the Jehovah's Witness knocking at the door every Sunday morning.  ;D  Cheers!

[berkshiremystery]

 

Bank of America: Bernanke Pullback Loser

Sep. 17th, 2012

http://www.thestreet.com/story/11705962/1/bank-of-america-bernanke-pullback-loser.html?puc=yahoo&cm_ven=YAHOO

 

Guggenheim Securities analyst Marty Mosby on Monday reiterated his "Buy" rating for Bank of America and raised his price target for the shares to $11.50 from $10.00, saying that "BAC's current discount to tangible book value per share represents the potential upside once the market decides that BAC doesn't need to issue incremental capital to fund future losses from Countrywide's residential real estate overhang issues and that these future losses could be covered with future earnings."

 

It sort of seems to me like he doesn't follow Bank of America very closely.

 

Look at what he goes on to say:

 

Guggenheim's "capital analysis suggests that BAC has enough capital to pass the Basel I stress test requirement but would be short of Basel III compliance at year-end 2013."

 

The analyst "concluded from that analysis that BAC will not need to raise capital, although BAC still needs to accumulate capital as quickly as possible."

 

 

Mosby added that "until short-term rates begin to rise, BAC's earnings power is between $10 billion and $12.5 billion a year," and that the company's after-tax mortgage losses ranges will range between $15 billion and $50 billion.

 

Yeah, I thought that was peculiar as well.  I've learned to ignore analysts...kind of like the Jehovah's Witness knocking at the door every Sunday morning.  ;D  Cheers!

 

Don't worry, I don't plan to join the Jehovah's Witness. Certain analysts seem to be rather drunk. BofA potential is way beyond it's tangible book value, which will be reached probably very soon (next 12 months),... at least book value in the following years, and if they reached that, it compounds further the years ahead.

[Mephistopheles]

 

Bank of America: Bernanke Pullback Loser

Sep. 17th, 2012

http://www.thestreet.com/story/11705962/1/bank-of-america-bernanke-pullback-loser.html?puc=yahoo&cm_ven=YAHOO

 

Guggenheim Securities analyst Marty Mosby on Monday reiterated his "Buy" rating for Bank of America and raised his price target for the shares to $11.50 from $10.00, saying that "BAC's current discount to tangible book value per share represents the potential upside once the market decides that BAC doesn't need to issue incremental capital to fund future losses from Countrywide's residential real estate overhang issues and that these future losses could be covered with future earnings."

 

 

 

 

Where was he when the stock was at $5?

[ERICOPOLY]

 

Bank of America: Bernanke Pullback Loser

Sep. 17th, 2012

http://www.thestreet.com/story/11705962/1/bank-of-america-bernanke-pullback-loser.html?puc=yahoo&cm_ven=YAHOO

 

Guggenheim Securities analyst Marty Mosby on Monday reiterated his "Buy" rating for Bank of America and raised his price target for the shares to $11.50 from $10.00, saying that "BAC's current discount to tangible book value per share represents the potential upside once the market decides that BAC doesn't need to issue incremental capital to fund future losses from Countrywide's residential real estate overhang issues and that these future losses could be covered with future earnings."

 

 

 

 

Where was he when the stock was at $5?

 

 

This was printed 5 days before BAC bottomed:

 

"There's a group of high-quality banks that have bottomed, but Bank of America isn't one of them," said Marty Mosby, large-cap bank analyst at Guggenheim Partners in Memphis, Tennessee.

 

 

[MrB]

 

Bank of America: Bernanke Pullback Loser

Sep. 17th, 2012

http://www.thestreet.com/story/11705962/1/bank-of-america-bernanke-pullback-loser.html?puc=yahoo&cm_ven=YAHOO

 

Guggenheim Securities analyst Marty Mosby on Monday reiterated his "Buy" rating for Bank of America and raised his price target for the shares to $11.50 from $10.00, saying that "BAC's current discount to tangible book value per share represents the potential upside once the market decides that BAC doesn't need to issue incremental capital to fund future losses from Countrywide's residential real estate overhang issues and that these future losses could be covered with future earnings."

 

 

 

 

Where was he when the stock was at $5?

 

 

This was printed 5 days before BAC bottomed:

 

"There's a group of high-quality banks that have bottomed, but Bank of America isn't one of them," said Marty Mosby, large-cap bank analyst at Guggenheim Partners in Memphis, Tennessee.

 

Yes, but Marty will still have his job next year...and his bonus! ???

[tng]

 

This was printed 5 days before BAC bottomed:

 

"There's a group of high-quality banks that have bottomed, but Bank of America isn't one of them," said Marty Mosby, large-cap bank analyst at Guggenheim Partners in Memphis, Tennessee.

 

 

You know an analyst is spewing bullshit when he starts trying to predict tops and bottoms. Analysts are pretty good at understanding businesses and most of them have pretty good projections, but then they make some really strange recommendations. If there is a crystal ball that showed the exact financial statements for a company for the next 10 years (i.e. you have the most accurate analyst ever) someone will find a way to interpret it positively and someone else will find a way to interpret it negatively, and someone will lose a lot of money.

 

It's shocking when you read some of these research reports. Two analysts might come to the identical conclusion that "The trailing P/E is 10 and we expect the earnings to double in the next 3-4 years". And one has a strong buy and somehow the other analyst makes an argument that this is a bad thing and says strong sell. Chances are, both of the analysts are right about what happens to earnings, but only one is right about what happens to the stock price. I don't think people like Buffett knows any more about the company than these analysts that follows it all day for the last couple of years. Buffett is just a bit more logical.

[ERICOPOLY]

Back in August 2010, it's a "value play" with a $16.50 price target:

 

Guggenheim Securities analyst Marty Mosby calls Bank of America a "value play," and upgraded the shares to a buy rating on August 13, with a 12-month target of $16.50.

 

http://www.cnbc.com/id/39068483/Bank_of_America_A_Play_for_the_Recovery

 

Somewhere along the line he lowers it to $10.

 

Then last October he says that it has one of the highest potential returns, so naturally he cuts his price target to $6.50 from $10  ;):

 

Mosby dropped Bank of America to "neutral" from "buy" while lowering his price target to $6.50 from $10. Nonetheless he believes Bank of America "represents one of the highest potential long-term returns."

 

http://www.thestreet.com/story/11272637/1/bank-of-america-downgraded-by-mosby.html

 

Then he sees it cross $5 per share and recommends nothing, waits until it breaks $10 before gaining confidence in saying that it's a "buy" on April 10th after a small pullback and a new $11 target price:

 

http://video.cnbc.com/gallery/?video=3000083572&play=1

[Liberty]

Back in August 2010, it's a "value play" with a $16.50 price target:

 

Guggenheim Securities analyst Marty Mosby calls Bank of America a "value play," and upgraded the shares to a buy rating on August 13, with a 12-month target of $16.50.

 

http://www.cnbc.com/id/39068483/Bank_of_America_A_Play_for_the_Recovery

 

Somewhere along the line he lowers it to $10.

 

Then last October he says that it has one of the highest potential returns, so naturally he cuts his price target to $6.50 from $10  ;):

 

Mosby dropped Bank of America to "neutral" from "buy" while lowering his price target to $6.50 from $10. Nonetheless he believes Bank of America "represents one of the highest potential long-term returns."

 

http://www.thestreet.com/story/11272637/1/bank-of-america-downgraded-by-mosby.html

 

Then he sees it cross $5 per share and recommends nothing, waits until it breaks $10 before gaining confidence in saying that it's a "buy" on April 10th after a small pullback and a new $11 target price:

 

http://video.cnbc.com/gallery/?video=3000083572&play=1

 

And I bet he's better than most analysts out there  :P

[Uccmal]

tng, Your comment about Buffett not knowing any more than these analysts is interesting, and likely true.  I think the difference is that he has held stocks through the Graham recovery to value cycle, and has the tangible experience of companies returning to value.  He has been through it dozens of times and we all know about his investment in WFC in 1991/92. 

 

He probably understands more about the stickiness of the assets than most of the analysts.  When I first bought BAC, everyone was supposed to dump their accounts, and change their business relationships away from BAC.  Well it hasn't happened.  Buffett would know this as the case from experience. 

[stahleyp]

 

Bank of America: Bernanke Pullback Loser

Sep. 17th, 2012

http://www.thestreet.com/story/11705962/1/bank-of-america-bernanke-pullback-loser.html?puc=yahoo&cm_ven=YAHOO

 

Guggenheim Securities analyst Marty Mosby on Monday reiterated his "Buy" rating for Bank of America and raised his price target for the shares to $11.50 from $10.00, saying that "BAC's current discount to tangible book value per share represents the potential upside once the market decides that BAC doesn't need to issue incremental capital to fund future losses from Countrywide's residential real estate overhang issues and that these future losses could be covered with future earnings."

 

It sort of seems to me like he doesn't follow Bank of America very closely.

 

Look at what he goes on to say:

 

Guggenheim's "capital analysis suggests that BAC has enough capital to pass the Basel I stress test requirement but would be short of Basel III compliance at year-end 2013."

 

The analyst "concluded from that analysis that BAC will not need to raise capital, although BAC still needs to accumulate capital as quickly as possible."

 

 

Mosby added that "until short-term rates begin to rise, BAC's earnings power is between $10 billion and $12.5 billion a year," and that the company's after-tax mortgage losses ranges will range between $15 billion and $50 billion.

 

Yeah, I thought that was peculiar as well.  I've learned to ignore analysts...kind of like the Jehovah's Witness knocking at the door every Sunday morning.  ;D  Cheers!

 

Oh geez, not another religion thread!! just kidding of course.  ;)

[ERICOPOLY]

tng, Your comment about Buffett not knowing any more than these analysts is interesting, and likely true.

 

Yes, just look at Mike Mayo in March 2011:

 

http://www.cnbc.com/id/41891291/Sell_Citigroup_Buy_Bank_of_America_Mayo

 

"Bank of America — No. 1 — is you don't even need revenue growth for this company to earn to earn $2 dollars a share," he said,  "No. 2, half of Bank of America is the old Merrill Lynch with a little bit more capital markets that's a very nice business fix.  And No. 3, no question that expectations are low on Bank of America management team, but I think they can exceed what is already pretty low expectations," Mayo added.

 

But then look at how he sticks to his convictions in Aug 2011  ;):

 

 

http://www.streetinsider.com/Downgrades/CLSAs+Mike+Mayo+Cuts+BofA+%28BAC%29+from+Outperform+to+Underperform/6694359.html

 

CLSA's Mike Mayo downgraded shares of Bank of America (NYSE: BAC) in a mid-day research note Monday amid a 14 percent decline in the stock. Mayo now rates BofA shares an Underperform, down two notches from Outperform. The analyst reduced his price target on the stock from $11 to $8.

 

With BofA shares last trading around $7 even, Mayo's new price target still represents potential upside of nearly 13 percent.

 

[Guest Dazel]

 

Ericopoly,

 

Don't waste your time with these guys...you know they do and say what they are paid to do...that is why they are turn coats.

 

That is why buffett called analyst reports "the funny papers".

 

Management has to move to put the lawsuits behind them...that is the catalyst to a major move...above tangible book.

 

Dazel.

[hyten1]

i want to buy more hope it goes to 6 again

[Uccmal]

Jeez Eric, you cherry picked my comment.  ;)

 

What is your feeling on Apple?  uh oh....