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No. of Recommendations: 5
I agree that the generalities are not useful, but the numbers back the argument.

BAC had a book value of 21.48$ per share in their 2009 Annual Report. The Goodwill Impairment Charge of 10,4 BN in 3Q10 is an indication that the NBV was somewhat over-valued however at the end of the day, your are buying a company which is trading profitably (excluding non-cash write-offs) at bellow book value.

The only reasonable argument for not recommending BAC is if you believe that future losses will a) preclude the bank from paying out future dividends and b) that these future losses minus any dividends paid out, will wipe out the NBV to such an extent that, even if the bank decides to divest its assets, it will not manage to get back its current share value from the sale.

There are clouds over the horizon and I don't see BAC becoming a Wall-Street darling any time soon, however if you want to buy a share of a powerful company for the long term, this might be an opportunity to do so.

My argument is not refined as it does not take into account the opportunity-cost of money but none the less, things would have to go very wrong for this company to produce the results which are projected by its current share price.

I am a brand new investor and have not bought any shares yet, however BAC will be one of the first 10 I buy.

Anybody think I am making a mistake? I would really like to know.

Dimitri Galani - Athens, Greece
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