Cramer Banks On Bank of America (BAC)
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Today, TheStreet.com's (Nasdaq: TSCM) Jim Cramer purchased 2,500 shares of Bank of America (NYSE: BAC) at the open around $12 for his ActionAlertsPlus.com portfolio.
Below Cramer outlines several of the reasons why he decided to take the plunge into Bank of America.
- BAC raised most of its capital that is required by the U.S. government under the stress test through "at the market" sales, preferred share exchanges and its $7.3 billion sale of China Construction Bank. This ensures Bank of America will eventually be able to repay TARP, like its competitors.
- As everyone knows, Cramer thinks housing has bottomed, therefore Jim thinks Bank of America is a great way to play the housing recovery with its ownership in Countrywide and other mortgage operations.
- The steep yield curve is a big plus as banks benefit from borrowing short and lending long, called positive spread investing, and will also contribute nicely to earnings.
- He noted the Merrill Lynch integration is going very well, and it has had market share gains in capital markets, investment banking and trading.
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Bank of America is up 1.69% in today's trading.
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BAC
Make a note that Cramer bought just about 12, yet said he would buy more if BAC dips below eleven. The way this is worded allows him to say BAC is still a bargain if it is over eleven thus nullifying his loss at 12.00. I have seen him do this many times. Well I've got news Jim - 12 dollars to 11 dollars is a HUGE loss.
Cramer and BAC
Cramer's BAC guess may or not be correct. But the incredibly poor syntax and spelling of his critics in this column detracts from any wit or wisdom those respondents may actually command. I can only conclude that they must be driving and texting - something only really arrogant and foolish people do.
Even a poofter can't miss on this one
Cramer showed what a spineless assbag he is on the Jon Stewart show, but it would be pretty hard to miss when buying BAC. I think there is still more downside, as the markets in general have not been "listening" to the economic news that is coming out. ( as noted by the over %300 gain from the low in March. I would also add that the company was oversold at the time, so the %300 is exaggerated) Unemployment is still climbing, defaults (personal) are declining, but still at a pace that indicates recessionary pressure. We are yet to see the full extent of corporate defaults. The credit expansion of the past 10 years has caught up, and it will limit spending (regardless of the elimination of "general default") With the yield curve as steep as it is, it favors the banks, and I think once the banks start lending again, there will be a new breed of consolidations loans available from the banks, which will be marketed to ease consumer debt burdens. My guess is that it hits $10 before it hits $14, but it is a definite long term buy.
Cramer a trader
uhhh, Cramer is an investor for the most part... he labels his 'trades' and his 'investments'... and almost 30% anual return is an awsome life-time record
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Wow, you just mispelled my post
Joe on Jun 22, 2009 03:41 PMOh that's nice. I just posted a spell checked message and it now appears to grammatically incorrect and in completely different order to look stupid? What's up with that?