Bank of America?

[W. Wells]

Whats wrong with BAC. Paying 5.5% dividend and Buffett is making another
buy. He made one above 50 several weeks ago.

 

[PeterL]

Whats wrong with BAC. Paying 5.5% dividend and Buffett is making another
buy. He made one above 50 several weeks ago.

Nothing is wrong. I sold off to get the tax write off but will
definitely buy back.

 

[sandybeth]

Nothing is wrong. I sold off to get the tax write off but will
definitely buy back.

Really? Buying back? I bought a bunch of shares in 97 when it was
MBNA. Since then it had a 3/2 split, a stock dividend & then became
BAC. So I have doubled+ my original investment, not counting the
div. I was thinking of dumping it & paying the tax piper (because of
the overall bank problems), but maybe I should keep?
SandyBeth

 

[W. Wells]

Go idea, I may do the same with C

Nothing is wrong. I sold off to get the tax write off but will
definitely buy back.

 

[PeterL]

Really? Buying back? I bought a bunch of shares in 97 when it was
MBNA. Since then it had a 3/2 split, a stock dividend & then became
BAC. So I have doubled+ my original investment, not counting the
div. I was thinking of dumping it & paying the tax piper (because of
the overall bank problems), but maybe I should keep?
SandyBeth

I don't want advise anyone on stock purchases. But BAC definitely is
a great stock to buy or keep. Once this credit thing is over BAC is
one financial stock that'll go up.

 

[Elizabeth Richardson]

I bought a bunch of shares in 97 when it was
MBNA. Since then it had a 3/2 split, a stock dividend & then became
BAC.

Just to set the record straight, Bank of America has been around a lot
longer than MBNA. Even when banks in the US were prevented by regulation
from operating outside of a single state boundary, Bank of America was one
of the top 2 or 3 largest banking institutions in the world. And to keep
this on thread, I would think if Buffet is buying, there likely isn't
anything wrong with Bank of America, just a temporarily very value priced
company.

Elizabeth Richardson

 

[Mark Freeland]

Just to set the record straight, Bank of America has been around a lot
longer than MBNA. Even when banks in the US were prevented by regulation
from operating outside of a single state boundary, Bank of America was one
of the top 2 or 3 largest banking institutions in the world.

In 1995, Bank of Tokyo merged with Mutsubishi Bank to become the world's
largest, surpassing Sumitomo Bank. Tokyo-Mitsubishi Bank was triple the
size of Citicorp, the largest in the US.
http://query.nytimes.com/gst/fullpage.html?res=990CE3DD143AF93AA15750C0A963958260

US banks were historically smaller than foreign banks in part because they
were restricted in where they could operate. Prior to June 1997 (when the
Riegle-Neal Interstate Banking and Branching Efficiency Act permitted
widescale interstate banking), BofA was 2nd or 3rd in the US (both in assets
and in deposits). It was 3rd behind Chase Manhattan (which had recently
merged with Chemical Bank) and Citibank; prior to Chase's merger, it was
number 2.

http://www.ct.gov/dob/cwp/view.asp?a=2235&q=297892 interstate banking
statutes
http://www2.fdic.gov/idasp/main.asp - ranking data via query with 12/31/1996

Mark Freeland
(e-mail address removed)

 

[Elizabeth Richardson]

BofA was 2nd or 3rd in the US (both in assets
and in deposits). It was 3rd behind Chase Manhattan (which had recently
merged with Chemical Bank) and Citibank; prior to Chase's merger, it was
number 2.

The period I was referencing was in the 1960s and earlier.

Elizabeth Richardson

 

[pallav]

While we are on the topics of banks, what about WB (Wachovia)? Their
write-off was bad news but they don't have significant exposure
compared to others. Is this stock just getting unnecessarily dragged
down by the rest?

Disclosure: I do own a little of WB and will keep that for the long
run.

 

[Douglas Johnson]

While we are on the topics of banks, what about WB (Wachovia)? Their
write-off was bad news but they don't have significant exposure
compared to others. Is this stock just getting unnecessarily dragged
down by the rest?

I have recently bought Wachovia, BofA, and Countrywide. In my opinion, (worth
exactly nothing) is that these are sound companies getting beat up by Fear,
Uncertainty, and Doubt. So far, all I have proved is that cheap stocks can get
cheaper. But such is the lot of the value investor.
-- Doug

 

[dapperdobbs]

Buffett has owned Wells Fargo (WFC) for many years. The distinguishing
feature about WFC today is that it is not involved in the "credit
mess" - i.e. according to their latest press statements and earnings
release. BAC, WB, C, FRE, and others are invloved in the credit mess -
i.e. according to their recent press and earnings releases.

Anyone wishing to read and compare and contrast press statements made
by some banks (unnamed here) may find that, unlike WFC, deliberate
obfuscations abound. Buffett has proven that he is capable of deep
analysis of individual issues. While his depth may be beyond most of
us, a sufficient analysis is well within reach. Banks are hard to
analyze - especially when they issue statements to the effect that "we
are well positioned" "we have utmost confidence in our leveraged
products operations" - after taking billion dollar write-downs. Make
sure you understand where a bank makes / loses its money ... if
Buffett were a hedge fund, he could be buying BAC in order to lend it
out in an equity swap.

These are not your mother's banks.

 

[sandybeth]

Just to set the record straight, Bank of America has been around a lot
longer than MBNA. Even when banks in the US were prevented by regulation
from operating outside of a single state boundary, Bank of America was one
of the top 2 or 3 largest banking institutions in the world.

What I meant to say in my post was that MBNA was absorbed by BAC.
SandyBeth