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How to capitalize on Countrywide's Stock?

anunez

New Contributor
Sep 13, 2007
22
1
10
Bay area
With Bank of America making the move to purchase Countrywide(maybe but I think so) what are the opinion's of the investors in the forum as to the move we should make. I personally have faith with Bank of America and I doubt that if they did acquire Countrywide that they will go bankrupt. So I am all for buying some stock and holding for the long run. What do you think?
 

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randallg99

Bronze Contributor
Aug 9, 2007
1,390
179
92
NJ
With Bank of America making the move to purchase Countrywide(maybe but I think so) what are the opinion's of the investors in the forum as to the move we should make. I personally have faith with Bank of America and I doubt that if they did acquire Countrywide that they will go bankrupt. So I am all for buying some stock and holding for the long run. What do you think?

buying the common is akin to playing russian roulette...odds of a great return on stock investment pale in comparison vs the worst case scenario

the US govt will not allow the largest home lender to fall, but the ultimate protection may not be enough to warrant a turn around in stock price so I dont believe you will entirely lose the investment, but the risk is not worth it in my opinion.

dont forget why bank of america wants country wide... they are buying a lot of new customers on the cheap. I mean, really on the cheap.

if you MUST have this company, go with the preferreds for some protection. They have jumped on the news, but their yield is still double digits.

I prefer agency grade mortgage backs for yield, capital appreciation and risk/reward at this time

good luck
 

randallg99

Bronze Contributor
Aug 9, 2007
1,390
179
92
NJ
of course, I need to add something....

bank of america has weathered the subprime shit storm rather well and their profits are exceeding the norm for banking which results in tax obligations. the purchase of country wide (funded by taxpayers/US Govt) will offset the profits and limit tax liabilities.

very smart and prudent move by bank of america.... but I will not endorse buying bank of amer or any other lending facility until we see hard earnings disclosed

good luck
 

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