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post #1 of 31 (permalink) Old 01-15-2009, 02:12 PM Thread Starter
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What do you guys think of BAC at it's current levels (8.39) for Bank of America that was priced over $12 a share earlier this week I believe if not last.

Just saw the drop recently and was wondering about when/if it would rebound.
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post #2 of 31 (permalink) Old 01-15-2009, 02:40 PM
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Buy the January 2010 $30 calls. They are $.20. If the stock gets to $20 in the next nine months you should make out fairly well.
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post #3 of 31 (permalink) Old 01-15-2009, 03:44 PM
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I almost bought some BAC this morning for $7.45 but it started climbing and I did not want to chase it .
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post #4 of 31 (permalink) Old 01-15-2009, 04:57 PM
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I value the shares at 21.62 using a FCFE discounted model. Of course, that is using data from November 2008.

Last edited by slow99; 01-15-2009 at 05:04 PM.
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post #5 of 31 (permalink) Old 01-16-2009, 07:14 AM Thread Starter
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I value the shares at 21.62 using a FCFE discounted model. Of course, that is using data from November 2008.
So you are saying it could be a nice return after holding onto it for awhile?
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post #6 of 31 (permalink) Old 01-16-2009, 09:31 AM
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Coming back down right now . Might jump in later this after noon if the prices hold .
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post #7 of 31 (permalink) Old 01-16-2009, 09:52 AM
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Coming back down right now . Might jump in later this after noon if the prices hold .
sitting at 7.47 right now....
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post #8 of 31 (permalink) Old 01-16-2009, 10:28 AM
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post #9 of 31 (permalink) Old 01-16-2009, 12:29 PM
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I'll probably wait . Nothing appears to be positive right now and I really thought the market would rally right before Obama took office but it has not done so .
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post #10 of 31 (permalink) Old 01-16-2009, 12:36 PM
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So you are saying it could be a nice return after holding onto it for awhile?
I obviously can't say either way on here for reasons I'm sure you know. All that number represents is the discounted value of future BAC cash flows to equity holders using a cost of equity capital of 10.6%, SGR of 4% and financial statement data that's a little dated. How how the state of the world and the state of BAC changed since then?
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post #11 of 31 (permalink) Old 01-16-2009, 12:43 PM
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I just bought the $40 Jan-10 calls for $.03. I like that bet, it's not fantastic but it is reasonable. Last week when the stock was at $14 this option was around $.07 to $.08. If the stock goes anywhere near there again I will come out fairly good.

On a different note, GE Capital says they are laying off 40%. holy crap!
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post #12 of 31 (permalink) Old 01-16-2009, 01:18 PM
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On a different note, GE Capital says they are laying off 40%. holy crap!
Holy cow batman! I only saw a news story for 10% on bloomberg. http://www.bloomberg.com/apps/news?p...9PM&refer=home
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post #13 of 31 (permalink) Old 01-16-2009, 01:44 PM
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Funny, they can't get the stories right. I had:

General Electric Co.'s (GE) financing arm, GE Capital, will eliminate about 7,000 jobs, almost 10% of its work force of 18,000, because of the global economic slump, CNBC reported Friday.

The cable network is a unit of NBC Universal, which is 80%-owned by General Electric.

Bloomberg News reported that GE Capital may slash as many as 11,000 jobs, citing people familiar with the finance unit's stated plans to save $2 billion through cost cuts. A GE Capital spokeswoman confirmed job cuts are part of that effort but wouldn't specify the number of positions being eliminated.

Web sites: www.cnbc.com, www.bloomberg.com

I think GE has 75K employees, GE capital has 18,000 of those and they are going to cut 7,000 from GE Capital.

None of this is suprising though, they've been trying to trim that place down. GE Capital had a ton of properties they bought and overpaid for that they were trying to sell to us and their expectations were just plain absurd. There is a lack of talent at that place, at least when it comes to real estate. Shit real estate is easy! I can't imagine how bad they fucked up their other stuff.
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post #14 of 31 (permalink) Old 01-16-2009, 01:50 PM Thread Starter
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Al....when are you bringing someone on at your place?
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post #15 of 31 (permalink) Old 01-16-2009, 01:51 PM
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I just bought the $40 Jan-10 calls for $.03. I like that bet, it's not fantastic but it is reasonable. Last week when the stock was at $14 this option was around $.07 to $.08. If the stock goes anywhere near there again I will come out fairly good.
i copied you.

on a side note, why are there 3 different symbols listed for each strike price?
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post #16 of 31 (permalink) Old 01-16-2009, 01:52 PM
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Al....when are you bringing someone on at your place?
No idea. We could use someone right now but there is no way we would hire anyone. That dude leaving was great for our budget last year, that is for sure. I've still got your resume.
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post #17 of 31 (permalink) Old 01-16-2009, 01:56 PM
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i copied you.

on a side note, why are there 3 different symbols listed for each strike price?
You should have a symbol for each strike price and each date. So you should have an entire matrix of symbols since you have an expiration date every month.

Good luck, I hope these things work out for us.
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post #18 of 31 (permalink) Old 01-16-2009, 02:09 PM
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You should have a symbol for each strike price and each date. So you should have an entire matrix of symbols since you have an expiration date every month.

Good luck, I hope these things work out for us.
i was looking at yahoo finances option chart
http://finance.yahoo.com/q/op?s=BAC&m=2010-01
WBAAH appears to be the correct symbol and the only one with volume so that's what i went with.


i need to be VERY agressive right now so i'm looking for all opportunities. i just took a painful loss today on some puts on an oil etf (USO) and im pretty upset about that since i was so far positive then everything went to hell when oil jumped to 50 a barrel. by the time prices came back, time value on my puts were crap and i took it in the shorts. i had a minor hedge yesterday that helped a bit but im still pissed.


i think you're right on this call and im probably gonna owe you a round of drinks.
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post #19 of 31 (permalink) Old 01-16-2009, 02:28 PM
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Good question about the other symbols, I am not sure what that is. I'm sure someone with more options experience will be able to tell us.
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post #20 of 31 (permalink) Old 01-16-2009, 02:31 PM
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Good question about the other symbols, I am not sure what that is. I'm sure someone with more options experience will be able to tell us.
my only guess is since bank of america aquired a handful of other publicly traded companies, maybe their options stay seperate after merger... cant think of any other reason there are multiple symbols.
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post #21 of 31 (permalink) Old 01-16-2009, 02:35 PM
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I think you should pull all of your money out of the stock market.
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post #22 of 31 (permalink) Old 01-16-2009, 02:39 PM
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I think you should pull all of your money out of the stock market.
I just lie about all the trades I do. I have all my money in my mattress. As soon as CSHD dips a little lower I am going all in on it.
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post #23 of 31 (permalink) Old 01-16-2009, 02:52 PM
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I'm thinking about getting some BAC JAN 10 $20.00 calls myself .
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post #24 of 31 (permalink) Old 01-16-2009, 03:02 PM
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I'm thinking about getting some BAC JAN 10 $20.00 calls myself .
Will somebody briefly explain how these investment options work? TIA
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post #25 of 31 (permalink) Old 01-16-2009, 03:08 PM
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Will somebody briefly explain how these investment options work? TIA
it's a lot more than what anyone here would want to type out, but here is a basic description:

you buy an option to either purchase or sell at a certain price in a certain time frame. you can sell that option to someone else without ever actually purchasing the stock. do a search on options trading and you can learn more about it...or just go to barnes and noble and pick up a book on it. cboe's site has some information on it that might help you out a bit... http://www.cboe.com/
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post #26 of 31 (permalink) Old 01-16-2009, 03:27 PM
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Will somebody briefly explain how these investment options work? TIA
Here's something I posted recently, along with the link posted by Stanggt40...
(Just reiterating the riskiness you expose yourself to with options. You don't want to be a novice and get too hairy.

https://www.dfwstangs.net/forums/show...ighlight=naked
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post #27 of 31 (permalink) Old 01-16-2009, 03:29 PM
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it's a lot more than what anyone here would want to type out, but here is a basic description:

you buy an option to either purchase or sell at a certain price in a certain time frame. you can sell that option to someone else without ever actually purchasing the stock. do a search on options trading and you can learn more about it...or just go to barnes and noble and pick up a book on it. cboe's site has some information on it that might help you out a bit... http://www.cboe.com/
I'll add that you don't ever want to early exercise unless you're doing it to specifically collect a dividend. I see people do that all the time and it drives me up the wall.
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post #28 of 31 (permalink) Old 01-16-2009, 03:49 PM
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i wonder what this will do for "bac"...

http://news.yahoo.com/s/nm/20090116/ts_nm/us_financial

NEW YORK (Reuters) – The U.S. government extended $20 billion of new aid to Bank of America Corp hours before both the largest U.S. bank, and the country's third largest, Citigroup, reported multibillion-dollar losses from the ongoing global credit crisis.

Bank of America posted its first quarterly loss in 17 years on the heels of the government's midnight announcement that it would help the bank absorb its January 1 purchase of troubled brokerage Merrill Lynch & Co.

The U.S. Treasury will provide the new aid in exchange for preferred stock, and along with the Federal Reserve and Federal Deposit Insurance Corp, agreed to limit Bank of America's potential losses on $118 billion in tainted assets.

Also scrambling to survive huge new losses triggered by the credit crunch was Citigroup, which unveiled plans to split in two and shed troubled assets.

The announcements came before a U.S. holiday weekend that ends on Tuesday when President-elect Barack Obama will be sworn in. Obama again said that even with a wide range of measures to pull the United States out of recession, the U.S. economy will likely worsen before it improves.

U.S. Treasury Secretary Henry Paulson, on his last full day in office, said a substantial portion of the second half of the government's $700 billion financial rescue fund should be reserved for bank capital programs.

Top U.S. policy-makers said they are discussing setting up a government bank that would use federal funds to buy troubled assets from financial institutions to try to stem the crisis.

Paulson and FDIC Chairman Sheila Bair both said an "aggregator bank" was one of several ideas U.S. regulators had discussed.

The Treasury said it will lend Chrysler LLC's finance arm $1.5 billion to help it make new car loans as part of a broader program to revive the U.S. auto industry.

The Treasury earlier extended a $4 billion loan to Chrysler for its automotive operations and had granted $13.4 billion in operating loans to General Motors Corp.

Shares in Bank of America and Citigroup rose in early trade after tumbling sharply on Thursday, as investors believe the government will not let the two banks fail.

But the size of the losses and need for fresh aid unsettled Wall Street. The two banks' stocks fell and pulled down shares of their two large rivals, JPMorgan Chase & Co and Wells Fargo & Co.

"Now it's clear that there could be more big banks coming back to the well, asking the government for money," said Matt McCall, president of Penn Financial Group in Ridgewood, New Jersey. "When does this end and when do they say no? They just keep writing checks."

Influential bond investor Bill Gross of Pacific Investment Management Co told Reuters that the worst harm to banks' balance sheets may be over.

Fear of more bank losses spread to London, where shares in Barclays fell 25 percent and other bank stocks tumbled as worries about capital and write-downs resurfaced. Dealers said there was no single reason for their sharp slide.

After the market closed, Barclays reported it expects to report pre-tax year profit well ahead of analysts' estimates of 5.3 billion pounds ($7.91 billion), and said it knows of no justification for the stock slide.

The Bank of England and Downing Street confirmed a meeting took place among Prime Minister Gordon Brown, the Bank of England governor, finance minister and securities regulator, but neither would comment on the talks.

British ministers aim to announce yet another bank lending package, a Treasury source told Reuters, while Ireland nationalized Anglo Irish Bank, its third-largest lender, to avoid a collapse.

BofA, CITIGROUP POST HUGE LOSSES

Citigroup, once the world's largest bank, reported a fourth-quarter loss of $8.29 billion and recorded $28.3 billion of write-downs and credit losses. Over the past 15 months Citigroup has amassed $92 billion in losses and write-downs.

Bank of America reported a $1.79 billion quarterly loss, while losses at Merrill Lynch were a record $15.31 billion.

Citigroup stock fell more than 8.0 percent to a session low of $3.44 after Moody's Investors Service said it may cut the bank's credit rating.

Moody's cut the credit ratings of Bank of America, whose shares tumbled 13.7 percent.

After the bell, Credit Suisse cut Citigroup's price target and earnings outlook, and almost doubled its loss estimate for the bank in 2009 to 90 cents from 50 cents per share.

The news of massive new bank losses and more aid came after the U.S. Senate on Thursday cleared the release of the remaining $350 billion of emergency funds to tackle the crisis. The Bank of America aid will come from the first $350 billion package.

With economies and credit markets worldwide yet to respond to massive bailouts and deep interest rate cuts, Bank of Japan Governor Masaaki Shirakawa said financial conditions in the world's second-biggest economy were tightening rapidly.

Conditions in France were also on the slide. The Bank of France estimated the French economy contracted sharply in the fourth quarter and its monthly survey of business managers showed they expect the downturn to deepen.

The euro zone trade balance swung from a surplus to a deficit in November as exports plunged twice as much as imports, data showed, underlining the fast pace at which the region's economy was sliding deeper into recession.

New U.S. economic data raised the possibility of deflation. The pace of U.S. inflation slowed to a half-century low last year and industrial output fell for the first time since 2002.

The reports suggested the economy could take longer to pull out of a downturn that is on track to be the longest and possibly deepest since World War Two.
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post #29 of 31 (permalink) Old 01-16-2009, 04:00 PM
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my only guess is since bank of america aquired a handful of other publicly traded companies, maybe their options stay seperate after merger... cant think of any other reason there are multiple symbols.
Correct. Because of the differing prices paid during the merger it isn't an even swap. It wouldn't be fair if someone holding, say Countrywide options, just ended up with the same number of contracts of BAC. Because of this difference, the different symbols represent differing amounts of shares underlying (typically.)

Countrywide shareholders received .1822 shares of BAC for each share. It wouldn't be fair to existing option holders (or shareholders!) if it was a one for one swap of options. Countrywide holders would make out like bandits.

My 401K is now a 400K (was 301K)
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post #30 of 31 (permalink) Old 01-16-2009, 05:26 PM
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Correct.
sweet! it's the only thing that made sense in my head.
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post #31 of 31 (permalink) Old 01-16-2009, 05:36 PM Thread Starter
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No idea. We could use someone right now but there is no way we would hire anyone. That dude leaving was great for our budget last year, that is for sure. I've still got your resume.
Just keeping myself on your radar, the working for an irrational female boss is running me ragged.
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