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BAC-WT - Bank of America Warrants


ValueBuff

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Am I the only one that hasn't sold anything yet?

 

No sales here. Warrants, Common, 2014 $10 and $12 calls + 2015 $10 calls. 30% of my holdings currently. Been holding most of the warrants and common and 2014 calls from when the common was $5 to $8. Got the 2015 calls when they started trading. No plans to sell anything anytime soon. I am thinking I will hold the common and warrants for quite a while. If the warrants get really pricey I might unload some or all and see if I can buy them back cheaper or move to other ideas. Not sure yet what my strategy will be for unwinding the calls. I had thought earlier about rolling the 2014 contracts over into 2015 contracts but haven't.  Between BAC and USG (second largest position) this has been one hell of a ride the past year.

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I wanted BAC to be my biggest holding this last year but it sank so low and I kept adding MSFT to balance out the risk. Looking back I should have bought more BAC and sold as it rode its way from 5 bucks. Oh well, now I just have to deal with Microsoft moving up, but much more slowly.

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Am I the only one that hasn't sold anything yet?

 

I'm with you.  This one is worth much, much more than the current quote.

 

Keep in mind Francis Chou was buying back when the A warrants were over $7.  His average cost is $5.88 in the associates fund and $3.57 in the RRSP fund.

 

These warrants may sell for over 6 times the current quote in 2019, or more.  At least that's the consensus between me and Bruce Berkowitz.

 

I fully expect the warrants to add another 75% by the end of March, while the common will be up around 40%. 

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I haven't sold any of the BAC stock I own either. And I don't plan to sell any shares unless the price goes up by another 25% or so in short order.

 

Give that I probably won't be selling BAC any time soon, I am not all that excited about this recent rise in price. Better from my perspective for the price to stay low so that BAC can buy back more stock in the next couple of years. But I guess it's the season for good cheer, so carry on with the revelry!

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I do nothing with my BAC common, a-warrants or leaps,... as this is a permanent holding. Why should I  sell,... i.e. fire myself as an investment banker,... just kidding,... but I count my future share of BAC earnings as my personal income, it's an investment banker income (look-through earnings).

 

 

BofA CEO: Fed wants bank to show consistent earnings

2012-12-18

 

http://finance.yahoo.com/news/bofa-ceo-fed-wants-bank-013958694.html

 

 

 

 

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I'd only be excited about a holding if it goes up by 10% while the market goes down, if everything goes up it's really nothing to party about.  It's like how a cup of hot chocolate is so much tastier when you are inside with the fireplace burning while it's heavy raining outside and you can see through the windows how people without umbrellas are running for safety.

 

ho ho ho.

 

 

 

 

 

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Haven't sold any BAC exposure recently -- in fact, I actually reduced some of my AIG exposure to put money into BAC about two months ago.

 

Gosh, it's fun to go back and read some of the threads we had on BAC back in the day when the stock was tanking (what, like less than a year and half ago?) and people really believed that there would be a complete loss on capital invested.

 

Those were the good ole' days. ;D

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There is fairly good chance of BAC making around $50bn over next 3 years. Slowly dividend would settle around 80-100 cents/share and EPS around $2.4-3/share. I believe this is just starting to move now. It was trading little above $14 for months in early 2011 and company has only got better since then.

 

Very hard to predict where it will go exactly but I am buying more over last few days. Buffett is buying WFC when it was trading at 32-33 saying it is cheap around that level. I think BAC will get better and give WFC run for its money sooner or later. BAC may be not as good as WFC but I attracted to it due to valuation and my small portfolio allows me to take risky bet with relatively smaller portfolio compared to income stream. 

 

Anyone planning to add more?

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It's a hold right now Eric.  I'll move my target to $12, when it hits $11.99, and then it will be a hold again...until it hits $12.99, and then I'll move my target to $13.  Plus I'll write an article for the Fool.com or The Street.com titled "Is Bank of America a Buy?"  That should help me raise $30-40M for the fund!  Cheers!

 

And here's the article. Ha!

 

http://wallstcheatsheet.com/stocks/is-back-of-americas-stock-a-buy-now.html/

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I haven't been adding any more at these levels but certainly am not selling my position.  The original thesis is still intact but with all of the volatility, I the market seems intent on offering opportunities on an almost regular basis.  I still don't think the market is fully valuing the accretive nature of the change from empire builder to capital allocator (via buybacks and dividends).  Additionally, the NOLs don't seem to be included in the valuation as those will provide a huge tailwind if BAC can get back to some semblance of "normalized" profits.

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