Selling my stake in Bank of America
Written By TarikBank of America (BAC) is experiencing extreme difficulties when it comes to money management. They have demonstrated a poor job at keeping a CFO on record, marking its fourth CFO in three years.
BAC: Uncertainity with the Management Ranks
I own shares of Bank of America and can no longer hold onto this stock for a couple reasons:
- Businesses need reliable chief financial offers because they manage the bulk of workload in any business: the numbers. And when we’re talking about the commercial banking industry, maybe the most technical industry number wise, a top notch CFO is a must.
- Management lacks an appropriate answer to this problem. As any concerned shareholder should do, we ask questions at the quarterly earnings conference call to receive answers. It’s when management cannot provide a proper answer that we signal a red flag.
Bank of America stock has not gained much either since I entered a position back in September. The only problem is that I currently hold the stock in my ShareBuilder portfolio, and if you’re familiar with their services, you know all about those $14.95 Real Time trade fees. Commission fees hurt, but I believe the opportunity cost of another potential investment outweighs the one-time $15 fee.
My position is relatively small anyways, so I do not mind parting with it.
What would you do? Buy, Sell, or Hold?
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Post/Read Comments
February 10th, 2007 at 9:01 am
Why would anyone who wasnt desperate sell a stock that is 10 x earnings and paying a 4 1/2 % dividend. It borders on idiocy.
February 10th, 2007 at 10:21 am
Good question. As you may already know, Bank of America is reaching the threshold of American Deposits they can control.
The government sets limits on the total amount of deposit assets that one banking facility can hold. So, in short, Bank of America is running out of holding assets. That’s why I sold off my position for shares of Barclay’s Bank instead.
I don’t think it’s idiocy, but I rather hold a growth banking stock over a value stock.
February 15th, 2007 at 7:27 pm
[…] When I axed shares of Bank of America (BAC) from my portfolio, I bought shares of Barclays PLC (BCS) as a foreign banking substitute. After watching the stock for a couple weeks, I entered my position at $50.88 back on September 12, 2006. […]
May 24th, 2007 at 12:48 pm
Holding my stock in BAC, but I am no longer reinvesting the dividend.