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#1
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Bank of America
I read recently that Warren Buffet had bought some BAC. Does anyone have any insight on this? The company is a dividend achiever and is paying out 5% right now. I would like to hear your thoughts on the risks involved with this company given the current credit environment.
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#2
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Re: Bank of America
[ QUOTE ]
I read recently that Warren Buffet had bought some BAC. Does anyone have any insight on this? The company is a dividend achiever and is paying out 5% right now. I would like to hear your thoughts on the risks involved with this company given the current credit environment. [/ QUOTE ] Credit environment is bad, but bankruptcies by competitors is good especially as it allows them to evaluate and purchase debt on the cheap. |
#3
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Re: Bank of America
Like countrywide
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#4
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Re: Bank of America
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Like countrywide [/ QUOTE ] That was a loan. J |
#5
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Re: Bank of America
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[ QUOTE ] Like countrywide [/ QUOTE ] That was a loan. J [/ QUOTE ] Incorrect... Bank of America invested in Countrywide nonvoting convertible preferred stock yielding 7.25% annually. The preferred can be converted into common stock, subject to restrictions on trading for 18 months, at a conversion price of $18 a share. A full conversion would give Bank of America a 16% to 17% stake in Countrywide's common shares, Mr. Mozilo said. |
#6
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Re: Bank of America
[ QUOTE ]
[ QUOTE ] [ QUOTE ] Like countrywide [/ QUOTE ] That was a loan. J [/ QUOTE ] Incorrect... Bank of America invested in Countrywide nonvoting convertible preferred stock yielding 7.25% annually. The preferred can be converted into common stock, subject to restrictions on trading for 18 months, at a conversion price of $18 a share. A full conversion would give Bank of America a 16% to 17% stake in Countrywide's common shares, Mr. Mozilo said. [/ QUOTE ] That was a loan 2B at 7.25%, 500M of which BAC got in the 5's from the discount window (which CFC was unable to go to). It was not positive for CFC. Couple other notes from memory on the deal: 1. It puts BAC towards (but not at) the front of the line for assets in case CFC fails. 2. BAC has the option to match other buyout attempts (but cannot initiate one) 3. BAC is almost certainly hedged by shorting CFC. 4. $18 was about 3-4 beneath current trading value. J |
#7
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Re: Bank of America
i am interested in this as well. there may be some big upsides for them in the longer term. i look longer out generally. has anyone done their homework.
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#8
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Re: Bank of America
Bank of America is solid as a rock..........hell, they give nothing away and are constant in ripping off their customers..........they are SOLID.
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#9
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Re: Bank of America
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Bank of America is solid as a rock..........hell, they give nothing away and are constant in ripping off their customers..........they are SOLID. [/ QUOTE ] Good management |
#10
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Re: Bank of America
Hi Ray,
yeah, I researched tjem pretty carefully a while back and saw their non-prime loan exposure was almost non-existent and recommended the purchase at $47, bought some for myself to hold and sold some for a quick profit. Jimbo |
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