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BAC
Bank of America is at something like a 5-6 year high. The last time it was at a 3-4 year high in late 98, it really took a dive. Bank stocks tend to be cyclical as we know, which is why their PE ratios rarely get to YAHOO or STARBUCKS type levels.
If BAC has trouble integrating FleetBoston (unfortunately I think they integrated well with NationsBank or vice versa) and if mortgage profits start to drop (they already have) as interest rates rise, perhaps BAC is a good 2-year leap PUT candidate. Any thoughts? History suggests that Banks should tank. The question is. Which high flying bank will give the most tank? Over the next 2 years. Probably the bank with the most exposure to mortgage profits. Or some bank with huge 3rd world loans that won't be repaid. It would be nice to identify the highest flyer with the worst portfolio and future earnings prospects. |
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