I sold my BAC (Bank of America) stock @ $5.00... good move or bad?

I just can't take it anymore... I'm sure I could of been a little more patient and sold it at a higher price... but I just want to get the hell out of the Stock Market and count my losses.

but was $5.00 way too low?

Anybody else in this particular dilemma ?

reply to post by Doomsday 2029


If you feel good about getting out at $5.00 a share that is all that matters. You might make money, but you might have lost more money; at least you can sleep at night knowing that you at least have some money.

if you dont have an entry or exit strategy, then you shouldnt be playing trader.

only when you have your rules will you be actually successful

reply to post by mahtoosacks


What did you buy it at? Depends on what kind of return you want.

I bought my stock in BAC when it was at 4.00. I will be holding onto them until 10.00 comes around. Which it will, it is just a matter of time.

-Kdial1

Originally posted by mahtoosacks
if you dont have an entry or exit strategy, then you shouldnt be playing trader.

only when you have your rules will you be actually successful

What you say is true, however not all people are day traders and do not follow the markets for every waking moment. With those people, exit rules went out the window in a hurry and many are stuck now. The reason is because a lot of people from the MSM to financial advisers said that long-term investors should stay in the market once the decline began in Sept. Even today many advise to stay in the market if you are looking long-term. The problem is that confidence is declining rapidly and people like OP are seriously considering selling despite having an exit plan that was relevant for maybe one week last November.

My $0.02 for the OP: You could have done worse but I would not have sold unless I needed that money. The good news is that you will have a great 'buy' opportunity soon - and no, yesterday's spike was not it.

I'm feel embarrased to say what I bought it at... I'll just say it was at $8.00,... however I know a few people that bought it at double digits.

I'm getting killed on all my stocks!!!

the only two I plan on sticking with long term are DXO(oil) & STEM(stem cell)...

I'm gonna try to stay calm and sell the rest of my stocks at (hopefully) a decent price in the near future.

I thought BAC at $8.00 was a steal... I was wrong.

Besides, I'm starting to have concerns that I might need some money this summer... and it won't be there.

reply to post by Doomsday 2029


Considering I am buying BoA (god I wish I bought Citi last week like I intended...) for my long-term portfolio, I would say you did a bad move. It's all about what makes you more comfortable though, my advice.. never sell a stock at the point where it has lost nearly all it's value if you know for certain the company will never fail. (federal backstops, etc) .. BoA is probably one or two quarters away from profitability, in which we will see a more dramatic increase in it's share prices.

If you NEED the money, I would be much more conservative with your investments. Don't gamble with money you need.

This is, of course, my opinion and NOT professional advice or commentary.

reply to post by Rockpuck


But isn't it possible that the banks will go under?

I saw RBS (Royal Bank of Scotland) do a reverse spilt too. So in two years RBS has gone from $213 to $3 a share... Could BAC ever end up doing a reverse spilt as well?

and what happens if the banks get nationalized... what would happen to our investments then?

AIG is at 0.41 a share... and I'm pretty sure it won't go under... but it will be nationalized.

reply to post by Doomsday 2029


Honestly, I think it depends on the bank. Regional banks can, and are failing, fast actually. 13 this year last time I checked, probably higher now.

The BIG banks, cannot fail. Simply because they cannot be absorbed.. and quite frankly, if BoA, Citi or JP fail, well ... the entire system fails.

BoA for instance has a massive backdrop insurance plan from the Treasury, as does Citi. This means basically, they are propped up. Nationalized, but not really Nationalized. If they take a huge hit on their CDS's, the feds make the payments for them up to approx 300 billion each.

It IS possible they could be Nationalized. And if this where to happen, stock holders are wiped out. Even Bond Holders are not safe.

In my opinion, the banks offer an awesome opportunity for little traders like my self with their wee lil portfolios.. I can by a few thousand shares of Citi at $1 a share, and the volatility of the market offers excellent turn arounds for day trading. Of course, it also offers even larger losses.. that's the game though, isn't it?

Right now I believe for the long-term investor their are A LOT of opportunities out there for big name companies that will most likely fare through this recession. You have to think long-term in this regard.

If a bank is nationalized, the share holders are wiped out (essentially worth nothing) .. but even in partial Nationalizations this is possible, such as AIG, and Citi.

Freddie and Frannie where Government Sponsored Enterprises, it was a no brain'r to see them Nationalized, but I don't believe they will stay that way forever, in which case those that buy the 40 cent shares can make a killing in the long term.

Nationalization essentially means the Government is the Majority Share Holder, they will direct the company, see it's oversight and fund it's losses. For all intents and purposes, all the major banks have already been Nationalized under the guise of a "bailout".

reply to post by mahtoosacks


Exactly what mahtoosacks said.

If you're losing big on the market, it's because you don't have a set of rules to go by with your trading. With that kind of strategy you could still lose a ton of cash even on the most bullish of markets.

I set my loss at 10%. End of Story. Case closed. And I never bend from that rule -- ever. In my case, I would have gotten out of BAC at $7.20 if I bought it at $8. But since you held it, you took over a 30% loss.

Those kind of losses eat your investment dollars in a hurry.

Never ever go by gut feelings and never ever break your rules for any stock. Never ever assume a stock will return to the level you bought it at -- as it could be years.

Can I ask why you bought BAC @ $8? The last time it was 8 was during the middle of a waterfall of red in mid February? That would have been a clear signal for me to avoid that stock at all cost.

Hi Doomsday 2029. I came across a chart today that defines market psychology as it applies to long-term trends. Charts simply represent human emotions in line & squiggle - I guess that's why the study is called; technical analysis

Probably doesn't feel like it right now, but losses can be our best friend/teacher. I don't think many marketeers really get serious about discipline until they they find themselves holding the bag a time or two. As they say; Plan your trade & trade your plan. Even longer-term investors need to be aware of shifts in sentiment/major trends - especially when the environment dictates that buy & hold is a dead strategy.

chart credit:Jean-Paul_Rodrigue
[atsimg]http://files.abovetopsecret.com/images/member/0b41373d49e3.jpg[/atsimg]
[atsimg]http://files.abovetopsecret.com/images/member/31eba866f95d.png[/atsimg]

The return-to-normal peak is noticeably higher on the S&P than on the phase chart - more of a classic double-top - but can you define the mean ?

Almost spooky

GL

*Post represents my personal opinions - I am not a certified investment adviser - Charts for entertainment purposes only*

reply to post by Doomsday 2029


Tonight on Bloomberg News, the message that was scrolling underneath said that the Citigroup and Bank of America bondholders were going to have to share in the bailout. I did not get further details, however, if they are going to buy out or wipe out the bondholders, that means the stockholders will get nothing.

You did the right thing, and I am selling my Bank of America stock in the morning, unless it is already worthless.

[edit on 11-3-2009 by amaranth]

[edit on 11-3-2009 by amaranth]

[edit on 12-3-2009 by amaranth]

Originally posted by Doomsday 2029
I'm feel embarrased to say what I bought it at... I'll just say it was at $8.00,... however I know a few people that bought it at double digits.

I'm getting killed on all my stocks!!!

the only two I plan on sticking with long term are DXO(oil) & STEM(stem cell)...

I'm gonna try to stay calm and sell the rest of my stocks at (hopefully) a decent price in the near future.

I thought BAC at $8.00 was a steal... I was wrong.

Besides, I'm starting to have concerns that I might need some money this summer... and it won't be there.

You should have stayed in. I compare the stock market to NL Texas holdem . You will never be successful at it if you aren't willing to lose all of your chips.

That said I will admit, I don't play the stocks. I think one avenue of gambling is enough for me.

It would seem that Congress is going to look for money wherever they can find it.

www.bloomberg.com...


[edit on 12-3-2009 by amaranth]

My opinion in short on BAC, is that it will be trading below 1$ pretty soon. It will be real similar to FNM and FRE. Same with C. I have shorted all of them with FAZ.

So in my opinion you were wise to sell at 5$ a share, considering it has traded well into the 3's now.

On that proxy S&P I posted, the 'first sell-off', and the tops are obvious - by extending the 'mean' and factoring against my personal time horizon - I might determine whether or not I made a wise trade.

At my age, I would have sold 5 in an irregular heartbeat

After-all, it's about preserving as much of our principle as possible, and living to fight another day.

GL

Originally posted by Not Authorized
reply to post by mahtoosacks

 

Can I ask why you bought BAC @ $8? The last time it was 8 was during the middle of a waterfall of red in mid February? That would have been a clear signal for me to avoid that stock at all cost.

I thought somebody might notice that... like I said, I'm embarrased.

I just didn't think it would tank much lower that day so I jumped on it thinking it would go back up to $11 or $12.

But oh well... I'm an amature at this,... and I think I'm going to stay that way... This game is not for me.

And if you ask me... I really do think that BAC can't go much higher than $6.00... BAC and Citigroup will probably be Nationalized very soon.

Originally posted by Doomsday 2029
reply to post by Rockpuck

 

But isn't it possible that the banks will go under?

I saw RBS (Royal Bank of Scotland) do a reverse spilt too. So in two years RBS has gone from $213 to $3 a share... Could BAC ever end up doing a reverse spilt as well?

and what happens if the banks get nationalized... what would happen to our investments then?

AIG is at 0.41 a share... and I'm pretty sure it won't go under... but it will be nationalized.

Do not worry about reverse stock splits it will not affect you, all it does is affect your preception of the price of the stock.

Say you have 100 shares at 1 dollar a share. If they did a reverse stock split it would be .50 cents per share but now you would have 200 shares. Either way it is the same price in your portfolio you just hold more or less stock depending on the stock split. Nothing to sweat over in my opinion at least not for long term investing.

reply to post by Doomsday 2029

Originally posted by kdial1
Say you have 100 shares at 1 dollar a share. If they did a reverse stock split it would be .50 cents per share but now you would have 200 shares. Either way it is the same price in your portfolio you just hold more or less stock depending on the stock split. Nothing to sweat over in my opinion at least not for long term investing.

Actually, a reverse-split works just the opposite Dd 2029. Typically a distressed company will employ a RS to artificially increase it's share price - but shareholder equity positions remain unchanged - at least initially. IOW, using the above example, your 100 shares trading @ $1 - would become 50 shares trading @ $2.

Maybe a company's low SP is threatening it's listing requirements..or..maybe management believes a low SP scaring-off buyers. In any event, a RS is always a red flag - usually a short-term remedy for an ailing stock - and you can bet the market will ultimately price the shares accordingly.

GL

Depends entirely on how much liquidity you need.

If you could have afforded the loss of the entire amount, or could have lived without touching it for the next 5 years then you made a bad move.

If you need the money, then there's no real choice- you had to do it.

It all depends on your situation and game plan.