It seems to me that we have entered a whole new world of understanding events in the stock market; in the old world, there were events that might have seemed to have an anticipatable path of co-correlation or co-causation. Now there is just nonsense. One thing I can tell you is that Bank of America shares have been spiking upwards in volume (AGAIN) this morning-basically, people are (AGAIN) taking their gains and getting the hell out of there, in this case because it is insane that their stock is significantly up this morning on the PR spin of the news that they need a shitload of money. It'll crash by end of day? Maybe! No one can tell you now.
Wednesday, May 6, 2009
7
Buy high. Sell high.
Basically, just get high.
Buy the rumor, buy the news.
Sure, the BAC rally may just be animal spirits lofted by hot air, but on the other hand, consider this: the gov is going to do everything it can to keep these guys afloat. They're pouring trillions into the banks. Social Security and Medicare will suffer, but not bank execs or bondholders. (GM bondholders, well, fuck 'em. It was their stupid decision to lend money to an enterprise that makes stuff.) The Obama admin is not going to a damn thing to challenge the rule of Wall Street - on the contrary, they're pumping big money into sustaining it. How's that for change we can believe in?
I want BOA to do well so they can afford to put a few dozen more fucking empty branch offices within six blocks of my apartment.
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A big reason is that the $34bn in capital needed is actually just a bit less than many hedge funds and other investors were projecting.
It's all about the positive surprise.
the spin gets even better...since they've already recieved 45 billion from the government and they only need 34 billion, they actually have an extra 11 billion laying around...
My father was a Bank of America company man for over 20 years. B of A put my sister and me through college.
My father almost had a heart attack when all his shares went from $50 to $7. Poor bastard!
Of course he was well diversified, but it was a solid blow to his portfolio. I think he's still got the shares. They might go up someday. ;)
I don't know whether he should sell or hold. He's got MBA not me.