Bank of America (BAC)

[Fredledingue]

The most important aspect with BAC right now is not price.... Just have cash to buy some when the market panic and sell for the week end like today.

My account become dangerousely low on cash...

[Airelon]

Just bought more at $30.55.

The DRIP remains on for this one ...

[Fredledingue]

Nice.

I also wanted to buy BAC or MS (except that MS is up 6.5% for today - too fast too high for me).
Unfortunately if I do that I'll be dry (of cash). And I don't want that.

[rachael24]

I was thinking about buying BAC as well...So you think its a decent buy then?

[Airelon]

Well, I don't like to get too much in the job of having stock picks Rachael, or recommending anything ... but yeah, I think it's a good buy right now as a long term investment, as long as the brokerage has the DRIP (Dividend ReInvestment Program) turned on for the stock. (Some brokers such as Scottrade don't allow DRIP's). DRIP's are key for myself. They unlock the power of 'compounding interest' in a way.

As far as the U.S. is concerned, this is one of the single largest banks out there, if not the largest. They are a great when it comes to paying dividends, which is a must for a dividend / DRIP investor such as myself. They've been paying dividends since 1903. They've built a huge reputation on it. And while they've had some writedowns - those writedowns have been some of the smallest writedowns to date amongst the financials.

In addition, they're trying to purchase Countrywide right now, which has depressed their stock price. Which means that I got it at a bargain. Now, with the exception of my "Challenge Project" account - I have not really contributed a large percentage of my available cash to the purchase in any of my accounts. So I have plenty of cash left to diversify into other stocks if the opportunity arises.

In addition, I got a lot of negative talk for wanting to buy BAC. Which for me - is a great sign. As Warren Buffett says: Buy when everyone is fearful. I've let some time pass (I already own BAC from - I think it's the low $40's) to let all the fear play out, and then swooped in once the fear had already been priced into the stock, and I started to see some a few technical reasons to get involved.

[Jerklian]

Bought some BAC a few days...back wanted to make sure I got some under 30 to feel good about it. The way I see it, if it continues to go down then good for the DRIP and if it goes lower in the twenties I'll keep snatching it up. This was a nibble and it is for a long, long term play (vide - investment). I'm concerned about the divi getting cut back, although trying to get in on a ~9% yield is worth that risk...again that risk isn't too great as its not a dividend positioning play. Plus, I'll got with the numbers - ie - dividend paid for 105 years, 20 consectutive dividend increases, etc. Appears to be healthy.

[Ray The Money Man]

While I don't think you have to be the first one in on any of these banks, we have owned BAC for sometime and are buying the dips under $29.95. And you get paid to wait! When Mr. Buffet bought in around $40.00 [I think it was] it gave me a sense of security. I figure if it bellies up my shares will just end up in my Berkshire Hathaway position. LOL

[HitHard17]

Airelon, you may wish to consider the fact that BAC has made an amazing bounce off its recent lows; from a technical perspective, if you view its weekly chart the past 3 weeks have been very kind to BAC coming off lows below $20, springing back to the low $30's; however, the stock has very strong price resistance at the $35/$38 level, and is likely to trade down from that level as more negative news hits the wire regarding the real value (or lack thereof) of mortgage backed securities.

Also, in the long run, BAC has strong exposure to consumer debt. As jobs decline, unemployment and foreclosures skyrocket, credit card default will likely be rampant. This, along with the hangover from the mortgate debacle will likely weigh heavily on banks like BAC. My guess is you can probably wait 36 months and buy the stock for less than $10 and make a killing as the US banking system is reorganized around a new currency in 2012 or so...