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Worries about their liability in the recently brought up foreclosure follies. Business is actually pretty good of late for them, but the loan loss reserves couldn't come near covering the liability if some action was taken in hundreds of thousands of loans claiming fraudulent practices.
Quite frankly its at a point where you just have to wait out the noise and then it will be a decent investment. Right now its like BP stock in the early parts of the well disaster. People are doing wild and crazy assumptions for liability with little reason to believe they will materialize. Once certainty of any liability comes into focus the stock will go the other direction barring a big u-turn on the economy.
I am watching BofA closely as I think there will be an opportunity to make money there. The stock is down about 40% off its 52 week high and isn't too far off its 52 week low. So the question is whether this price already reflects uncertainty over the foreclosures mess and whether it will go much lower. Like Citibank which I just bought, I think it offers good potential for long term growth and could easily double in the next 3-5 years if not before. In my view, there is more opportunity on the upside than there is risk on the downside.
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