BAC jan 27

Bank of America NT & SA as it was called, after starting it’ life as Bank of Italy, has a soft spot in my heart, as it is here that I experienced my formative banking years and got immersed in the real facts of  bank life quickly. We have all heard that a fool and his money are easily parted, it is true ,I  saw it then and more recently.  In 1976 they almost went bankrupt, I was an expatriate at the time  on my way to Chicago from London. According to their SPM, standard practice manual, a few thousand pages long, your dog is not a personal asset; how is that as an example?!  Anyway they took over Country Wide ,the largest mortgage originator and while they were trying to digest that one they took over Merryll, the largest broker, all this literally on a moments notice. Of course B of A itself was taken over just a few years ago, which explains it’s NC address as opposed to California where they financed the wine growers. This bank was raised in a state that allowed multi- office banking ( unlike, for instance, Illinois) and as a consequence it grew more easily and alternated as number one or two with CitiBank for years. So here we have the biggest bank, with the biggest mortgage originator and the biggest broker all in one with the biggest competitor down the sink. If there is anything “To Big To Fail” this is it. Having settled that , the next question is,is it a buy at $5 or less. I must confess to having bought options at less attractive risk/reward prospects . Enlarge the chart and you will see a pretty nice a-b-c or completed down trend or correction. There is potential here but I will let you decide. Click on the chart to enlarge.   In the chart wave C is labelled as 5. this is an error.

 

BAC Jan 27