Yesterday in the late morning, we caught wind of Bank America’s (Ticker: BAC) CEO Mr. Brian Moynihan stating – while visiting in Boston – that he was not anticipating selling more shares to raise capital in order to address difficulties related to mortgages that bond-holders would like Bank of America to buy back.  This news came at an opportune time – relative to the Federal Reserve’s announcement to initiate another $600 billion in U.S. treasuries purchases and the favorable for business election results from Tuesday.

At the Stock Market Companion, we quickly loaded up Bank of America stock at $11.87/share and notified our subscribers immediately that we were doing so.   They could then choose to do similarly, or simply watch and learn.   Today, our cumulative return is approx. +6.2%.  We are holding our shares for more out of this situation, but also realize that this may simply be an advantageous “bounce-play” in the stock.

Our subscribers knew that we had been looking for an entry in Bank of America, but we were uncertain of the ultimate outcome of this tug-o-war with bond holders, which include the New York Federal Reserve Bank.  It wasn’t clear if Bank of America would “roll-over” on this issue and not put up a clear fight.  Of course, even the perception of rolling over would be further detrimental to the stock.  So we stayed clear until we had a better understanding of the situation.

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