Are You Buying More Bac Shares?
Q: I have a couple thousand shares of BAC at $5.75. I'm trying to figure out if I should buy more. This would obviously mean an average up. But profit is profit. Constructive criticism please.
A: I bought in the 4s and again a few days ago in the 10s. I'm long on BAC for sure. It may never again reach it's all time high, but I'm sure it will get back up into the 30s within a couple years at most. If you're long, I think it would be silly not to buy at these prices. I think averaging down doesn't necessarily means overall profits also. I guess it's the actual gain/loss that counts, to me at least. Your time horizon is important. If the money you hold need not be used in daily expenses and you already have emergency cash, you might consider adding more. Unlike Citigroup which has been selling business units to keep themselves afloat, BAC took govt money as a cushion in case things turn worse than they expected, their CEO explained. BAC recorded only 1 quarter of loss since this downturn,and that was after they have included in Merrill Lynch's toxic assets. Bless them on Monday though. BAC should heads towards its all time peak $54 in the years to come. They have got bigger after acquiring ML, thus I am looking beyond $54. I hope this help, good luck. As KL said, BAC's net income should be $30B when economy turns. It makes sense to me by adding up past earning power from BAC, countrywide, ML and also the cost cutting after merger. Also, I believe economy will emerge stronger if gov will cut deficit after recession, reform health care and invest on energy, infrastructure, education, etc. The uncertainty is short term, will BAC be solvent as KL said without any dilution? I did not follow BAC for long, and not quite sure about KL's credibility. It seems some investors already accused him for not telling the truth for ML merger. I watched all his recent interviews and overall impression is good. I I am long and loaded quite some on BAC. my belief is if economy doesn't meltdown (which I don't think it will happen), BAC is still amazing opportunity.
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