[Carlhole]

Eight Reasons Bank of America Is Going to $20

We are experiencing an overreaction of historic proportions when it comes to the financial sector and specifically Bank of America (BAC). In case you haven’t noticed, these extreme overreactions are becoming the norm; a thorough understanding of the reasons for the overreaction are paramount to generating great investment returns. The market has gotten Bank of America terribly wrong in the short run as the ‘cloud of uncertainty’ has collided with the ‘sea of negativity’. Governmental uncertainty combined with the market’s negativity are the contributing factors for Bank of America plunging below $4 a share. After riding Apple (AAPL) calls to triple digit gains in 2007, and then riding oil puts to triple digit gains in 2008, I am making Bank of America my #1 holding for 2009. By next year this stock will be back to $20 a share. Consider the following:

1) The market is running wild on some hyped up article written in the Financial Times that claims Obama is considering nationalizing the banks. If you actually read the article you’ll notice the anti-American sentiment at the very beginning when they say that ‘nationalization has long been regarded in the U.S. as a folly of Europeans...’

This was the guy whose article I posted shortly after the price peak in crude last year. He forecasted oil falling to $30.

And those narrow-set, full-on caffeinated eyeballs stare so confidently and defiantly outward at the world, I can't help but post his current thinking on the banking and financial debacle.

[3aidlillahi]

He's talking stock value?! I was thinking that sounded right for their total assets.

[EnergyUnlimited]

He's talking stock value?! I was thinking that sounded right for their total assets.

Their assets may be worth $20 but you have forgotten about $ many billions of liabilities.

No, $20 is an extremely optimistic valuation of BoA.

[virgincrude]

Carlhole, your avatar looks infinitely more intelligent than this mug .....

[ReverseEngineer]

Carlhole, your avatar looks infinitely more intelligent than this mug .....

Who here thinks the money he has invested in BofA is his own?

Reverse Engineer

[Specop_007]

Carlhole, your avatar looks infinitely more intelligent than this mug .....

Haha, well done.

[vision-master]

Just another suit. I hate suits & don't trust em at all.

[misterno]

He looks like a shmuck

[vision-master]

He looks like a shmuck

L@@k at that hook nose.

[Carlhole]

See my post last August - 12th one down from the top. It got the same kind of reception as this posting got.

Link to Schwarz August '08 opinion on oil price:
Forget $100 a Barrel - Oil Will Plummet to $30

The groupthink here on PeakOil.com is so predictable.

People start spouting the same doom line over and over, posting every sort of fear-mongering article they can find which supports it. If any contrary opinion is posted, everybody piles on with middle-school level snarking comments. Then, when the contrary opinion is proven correct over time, everybody just sort of grumbles a little about it but no one says much about how wrong they were.

Look, idiots, piling on to someone's contrary opinion with juvenile trash talk does NOT help your favored prognostications come to pass with any more certainty. This behavior is a symptom of GROUPTHINK. It's caused by the non-acceptance of dissenting views - so some group members try to coerce or ridicule in order to get everybody thinking on the same track again.

Groupthink brings the intelligence and creativity of ANY discussion way, way down. Groups who are actively trying to be more perceptive or creative - in any endeavor - vigilantly guard against groupthink as a well-known, all-too-common human failing.

The Bay of Pigs fiasco, for example, has been used many times as an illustration of the results that groupthinking groups achieve. So has Xerox fumbling of the PC revolution. Xerox Palo Alto Research Center invented the PC, but due to the regimented groupthink of upper management, Xerox could not capitalize on the brilliant innovations of its own computer scientists.

And that's what people do here at PO.com.

They groupthink.

[vision-master]

It's called group therapy.

[emersonbiggins]

Link to Schwarz August '08 opinion on oil price:
Forget $100 a Barrel - Oil Will Plummet to $30

The groupthink here on PeakOil.com is so predictable.

Schwarz was right, but for the wrong reasons.

This oil spike was a bubble fueled by a group of deceived investment speculators who failed to account for adaptable demand destruction from consumers. The technology to replace oil already exists and high oil prices merely provide the necessary motivation to bring these products to market.

Where are these products? Yes, we've got demand destruction, but it's of the rather ugly kind - the one that ends in mass homelessness, unemployment and general chaos - depression, even. If anything, we are now further from a replacement for oil than anytime in recent memory.

Kudos on the price call, but he completely misconstrues cause and effect.

[AirlinePilot]

Until the assets which are worth nothing, and the CDS monster is killed, there are no good reasons for investing in any of the larger financials right now. Nationalization or hundreds of billions more in bailouts will be required just to maintain the status quo.

Unfortunately I agree with Denninger on this stuff. The bad assets need to be exposed. Bankruptcies and closures need to be accelerated and we need to work through the crap. So far all that is happening is the pigmen are trying desperately to keep housing inflated and the Ponzi schemes running. We keep papering over the problems and trying to keep going with a system of completely insolvent major banks and financial/insurance institutions.

We cant do it at these numbers forever and when TSHTF these big banks are going to be ground zero. So is the dollar and the bond market. Much carnage and further market losses have to occur if we are ever to get out of this even somewhat intact.

This guys prediction isnt something new, nor is it different. I'm sure there are millions of folks who "wish" this would happen. It might, but just as plausible is that the big banks implode and take down everyone who is investing in a sure thing. We do not have a clue yet where the bottom is and financials could be the more spectacular part of the collapse.

I frankly doubt that anyone who was predicting a pullback in oil knew or even had a clue as to the reasons it would go down and why it would crater so badly.

[mos6507]

The problem is that this crisis is the bird flu for the economy. The entire financial system of the whole world has been infected by these bad investments at a truly unprecedented level of liability. I'm just not sure what's going to be left standing if we just "let everybody fail". This is truly uncharted territory even scarier than the events leading to the great deprssion.

[Carlhole]

7) Bank of America will be the undisputed leader of the new economy. I’m excited about being invested in the largest retail brokerage (Merrill Lynch), the largest mortgage lender (Countrywide), and a bank who has been profitable for 17 years in a row, including 2008 (Bank of America).
8) Huge insider buying.

See you at $20.

Disclosure: Long 2011 $5 BAC Calls.

Well, you know, time will tell. And call options are a time-limited asset so Jason Schwarz will, no doubt, comment on this play of his at some between now and 2011.

I'll be sure to draw your attention to it when your all walking around scratching your heads wondering where all the doom went.

[TheDude]

See my post last August - 12th one down from the top. It got the same kind of reception as this posting got.

Link to Schwarz August '08 opinion on oil price:
Forget $100 a Barrel - Oil Will Plummet to $30

The groupthink here on PeakOil.com is so predictable.

You can link direct to a posting here by putting the mouse over the icon in the upper right corner and selecting Copy Link Location.

I called your boy an asshat for the simple reason that he denied the existence of fuel shortages at the time. Those are still with us, too, even with the price utterly cratered. Do your homework.

You posted this in the same thread:

I'm with T. Boone Pickens on oil - I think it could bottom out around $100.

Come on, courage of your convictions and all that! The whole subject of price couldn't be a bigger mug's game. We have only a handful of price shocks to base a model on, after all; like 1980 there are so many variables also at work you're completely at sea. All I'm saying anymore is that the price will rise at some point, how high I don't know. Agree with you that a government mandated price floor would be just the ticket to switch over to alternatives, but good luck ramming that through in the US. Cheap fuel's about the only break people are getting anymore.

Dunno about his call on BofA. Sounds like they're staggering along nicely. Some say there's cancer in the markets, some say it's the common cold. Seems like derivatives could as easily be grandfathered out of existence at some point, as take down the global economy, which isn't in anyone's interest, including the Masters of the Universe.

[Carlhole]

See my post last August - 12th one down from the top. It got the same kind of reception as this posting got.

Link to Schwarz August '08 opinion on oil price:
Forget $100 a Barrel - Oil Will Plummet to $30

The groupthink here on PeakOil.com is so predictable.

You posted this in the same thread:

I'm with T. Boone Pickens on oil - I think it could bottom out around $100.

Come on, courage of your convictions and all that!

Taking a guess about a market is not exactly a conviction.

I'm not saying that yours truly was correct in any predicting of oil's price; I'm just bringing up this guy's piece, which at the time, seemed unbelievable. But he turned out more right than anyone here on PO.com.

Now, he's making another claim that runs completely contrary to everyone on PO.com again. So I'm posting one of his piece's again.

[virgincrude]

See my post last August - 12th one down from the top. It got the same kind of reception as this posting got.

Link to Schwarz August '08 opinion on oil price:
Forget $100 a Barrel - Oil Will Plummet to $30

The groupthink here on PeakOil.com is so predictable.

People start spouting the same doom line over and over, posting every sort of fear-mongering article they can find which supports it. If any contrary opinion is posted, everybody piles on with middle-school level snarking comments. Then, when the contrary opinion is proven correct over time, everybody just sort of grumbles a little about it but no one says much about how wrong they were.

Look, idiots, piling on to someone's contrary opinion with juvenile trash talk does NOT help your favored prognostications come to pass with any more certainty. This behavior is a symptom of GROUPTHINK. It's caused by the non-acceptance of dissenting views - so some group members try to coerce or ridicule in order to get everybody thinking on the same track again.

Groupthink brings the intelligence and creativity of ANY discussion way, way down. Groups who are actively trying to be more perceptive or creative - in any endeavor - vigilantly guard against groupthink as a well-known, all-too-common human failing.

The Bay of Pigs fiasco, for example, has been used many times as an illustration of the results that groupthinking groups achieve. So has Xerox fumbling of the PC revolution. Xerox Palo Alto Research Center invented the PC, but due to the regimented groupthink of upper management, Xerox could not capitalize on the brilliant innovations of its own computer scientists.

And that's what people do here at PO.com.

They groupthink.

Yeah, I agree.

But still Carl, that gorilla actually looks like it's thinking .... somehow, next to him, this guy just doesn't. That's all I was sayin ....