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More on bank capital return plans: JPMorgan (JPM) an increase in the dividend to $0.38 from...

More on bank capital return plans: JPMorgan (JPM) an increase in the dividend to $0.38 from $0.30 and $6B in share repurchases over the next year (the plan was approved, but the Fed has asked for a resubmission this year). Bank of America (BAC) no increase in the dividend, but share repurchases of $5B and the redemption of $5.5B in preferred stock.
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Comments (27)
  • bill d
    , contributor
    Comments (1902) | Send Message
     
    So what was all that crap about these great dividend increases last week??? Yeah - they love all of you. Look up sucker in the dictionary and you may see a picture of yourself. Take a good look at the exec packages and their continued compensation increases..
    14 Mar 2013, 05:22 PM Reply Like
  • benitus
    , contributor
    Comments (1938) | Send Message
     
    bill....I never believe (although I was hoping) that those stingy and crappy execs would increase their dividend payout because, as you pointed out, they take care of themselves before taking care of us. I wonder what Josh (Arnold) has to say about this. Say something, Josh, if you're tuning in. Anyway, buybacks should push prices up, so we can still make some profit from trading them. Buy some more quickly now and dump them when the price shoots up. That's what I did, as I expect to see at least $1.50 within a week, if not earlier.
    14 Mar 2013, 06:49 PM Reply Like
  • only11toes
    , contributor
    Comments (23) | Send Message
     
    Please read a little closer:: .... " share repurchases of $5B and the redemption of $5.5B in preferred stock"
    Do you understand what this means to shareholder, this is much better than a token dividend increase. Patient holders will be rewarded. If you feel you were suckered, I hope you sold before market close today. BIG HINT: look @ after hour trading frenzy, over 18 million shares traded so far and BAC high of $12.75.
    FREE ADVICE: just sit back and enjoy the ride and you will be a happy camper. This is EXACTLY what the street was looking for. Hope you held on, Moynihan just killed a lot of shorts.
    15 Mar 2013, 05:35 AM Reply Like
  • benitus
    , contributor
    Comments (1938) | Send Message
     
    only...you're exactly right. Shorts will certainly go crazy if they don't bail, as there's no turning back now. In fact, it's the shorts that are keeping BAC from going higher and faster. Well, looks like there're still lots of short action out there and nothing spectacular will happen until the shorts bail and convert to long. Being patient is now the name of the game. Good luck!!
    15 Mar 2013, 03:28 PM Reply Like
  • bill d
    , contributor
    Comments (1902) | Send Message
     
    I am happy to see it go up because i have a couple of JAN 14 $10 puts I've been waiting to buy back - $86 today so I'm up about $700. Prob do it Monday. Figure it's a dead cat bounce. Think I'll just take the money and run.
    16 Mar 2013, 02:51 AM Reply Like
  • benitus
    , contributor
    Comments (1938) | Send Message
     
    bill...you should probably sit this one out, as there's definitely more room to grow, unless you want out of BAC for good. My money is on sticking around. Have a great weekend.
    16 Mar 2013, 11:16 AM Reply Like
  • bill d
    , contributor
    Comments (1902) | Send Message
     
    @Benitus
    Not sure I understand about "sitting out".- the most I can make any more is $86. I SOLD the puts originally. As the stock goes up the value of the puts goes down. If I don't buy them back and the stock stays above $10 until JAN 2014 I'll only net $86 more. As the stock goes down they increase in value and if it falls below $10 between now & JAN 2014 I will get called out and have to buy 200 shares at $10. Right now I will net about $700 if I buy them back at $86 (2 @$43). I have no desire to own the stock. And of course not too many folks would exercise their put options and make me buy their stock at $10 today. The folks that BOUGHT the puts are eating it big time.right now. Remember SELLING puts is bullish - you want the stock to go up. Buying them is betting the stock will go down. So far I am having a great weekend - thanks. And if you are long BAC you are too. Only difference is as it goes up you continue to increase your profit - I'm locked in. Even if the stock goes to $100 I only will make $86 more as long as it stays ABOVE $10 by JAN 2014.. You naturally will make a bundle. Of course I would certainly buy as much as I could get at $10 today LOL. Hope this clears it up.
    16 Mar 2013, 06:13 PM Reply Like
  • benitus
    , contributor
    Comments (1938) | Send Message
     
    sorry, bill....I misread your earlier comments. Seems like you've done your homework and if you can make $700 as opposed to $86, then of course, you should get out now. Since I'm long on the stocks (not options), I will certainly sit it out and buy more on the dips, for trading purposes and not for going long, as there will be some degree of volatility for some time, seeing that the shorts are still going strong and keeping the price from soaring for now. Good luck for this week. If the market has caught its breath, then it will continue climbing but if conditions prompt further profit-taking, then we might see further consolidation, before the indices turn around again.
    18 Mar 2013, 12:31 AM Reply Like
  • bill d
    , contributor
    Comments (1902) | Send Message
     
    Hi B.,
    Thought perhaps that's what happened - thanks for reminding me - when I just read your comment I went and closed out the puts!
    I used to do a lot of swing or day trading I guess it's now called and did very well but although I'm sure many will disagree I've done very well selling puts (sometimes only holding a few days) & a few covered calls - sometimes in a moment of weakness or stupidity I will buy calls and normally lose - like recently with MSFT. A notable exception was early last year with BAC but even then I sold too them too early. Personally I think BAC will continue to slowly "terrace" up and I should probably sell some more puts. I only sell puts when I am willing/want to own the stock in the event I get exercised - like recently with NLY - I'm now already ahead considering the dividends. Guess I'm afraid to press my luck - don't wanna jinx all you BAC longs LOL. I think your strategy sounds perfect.
    Good luck,

     

    Bill
    18 Mar 2013, 01:32 PM Reply Like
  • benitus
    , contributor
    Comments (1938) | Send Message
     
    bill, congratulations on your wise move. Always feel good to make some money. I used to be a day-trader (and I'm still fighting the temptation to day-trade everyday) when I was paying $7 per trade, until I realised that those buggers were ripping me off, as I pay almost $15,000 in one year. Now, I pay only half-cent per share with another firm and making more trades. Never regret any trade you make but learn from it if you've made a mistake. As day-traders, we trade by volume, so there's no such thing as selling too early, as long as you can make some money everyday. Again, we win some and we do lose some. What I do now is to use several trading accounts and divide my capital three ways, one for long-term, another for short-term, and the third for trading, which I use to buy and sell (not within the same day, unless for quick turn-around, as with GMCR today, having a $2 spread) volatile stocks that goes up and down everyday, like C, JPM, VLO, GMCR, etc. I got into GMCR at $20 last year and has been doing well, particularly as there are lots of shorts, which keeps the stock moving actively (I hate dead stocks). Another volatile but unreliable stock would be CALL, as it's near its low now, but daily volume is not much. I stumbled across it accidentally when it was $11 late last month and saw it going up everyday until it turned down after crossing $15 and got out with a good profit. Good luck.
    19 Mar 2013, 05:45 PM Reply Like
  • bill d
    , contributor
    Comments (1902) | Send Message
     
    Hi B.,
    Kinda like to think I know what I'm doing (usually) but compared to you I am a babe in the woods LOL. And a little (good) luck never hurts either. I wish you good luck but not really sure you need it ;).
    Bill
    20 Mar 2013, 12:43 PM Reply Like
  • benitus
    , contributor
    Comments (1938) | Send Message
     
    Aw, shucks, bill. You're too modest. Come on, you're doing good and that makes you better than many people. It's also wise to seek another opinion if you're unsure. I'll be sure to seek your opinion if I'm stuck in any situation. Have a great weekend and give yourself a treat. My mother always said, "we work hard to eat well", so you deserve to feel good whenever you make a score. God bless always.
    21 Mar 2013, 05:17 PM Reply Like
  • MrWittyOne
    , contributor
    Comments (39) | Send Message
     
    I'm hoping these preferred are those belonging to Buffet. He's getting one hell of a return.
    14 Mar 2013, 05:28 PM Reply Like
  • Doug Dallam
    , contributor
    Comments (7981) | Send Message
     
    Buffet has already almost doubled his money in 6 months.
    15 Mar 2013, 05:29 AM Reply Like
  • only11toes
    , contributor
    Comments (23) | Send Message
     
    BH GETS a 5% premium on preferred stock repurchased by BAC
    15 Mar 2013, 05:32 AM Reply Like
  • benitus
    , contributor
    Comments (1938) | Send Message
     
    Buffet came in when the stock was $8 but he had a sweet deal, so he's going to hold out for some time. I think he'll wait for at least $20 if not longer. I bet he's been picking up more when it went below $8.
    15 Mar 2013, 03:31 PM Reply Like
  • benitus
    , contributor
    Comments (1938) | Send Message
     
    Mr....yes, the preferreds are very likely belonging to the old goat, unless there are more out there that nobody knows anything about, which I doubt. For Buffet, it's like parking his excess funds and getting 8% annual returns, which is one heck of a deal, but for BAC, there was no choice but to make the deal (as proposed by Buffet) because there wasn't any other way to get those much-needed funds to turn it around, which is why BAC needs to get rid of the preferred shares asap.
    16 Mar 2013, 11:20 AM Reply Like
  • benitus
    , contributor
    Comments (1938) | Send Message
     
    yes, dwdailam.....but don't forget the damn warrants that he still has, which allows him to make further killing on BAC, which he will probably sit on them, until his butt hurts.
    16 Mar 2013, 11:22 AM Reply Like
  • JamesChessing21
    , contributor
    Comments (120) | Send Message
     
    a share buyback of 10 billion wow i.e a 8 pct yield dividend buy buy buy buy buy
    14 Mar 2013, 06:27 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (779) | Send Message
     
    This is better than a 5 cent divi increase.
    14 Mar 2013, 06:40 PM Reply Like
  • benitus
    , contributor
    Comments (1938) | Send Message
     
    Everything depends on how aggressive are the buybacks. They may take their time and buy on the dips, so it's up to us to get the ball rolling. I'm already in for some more, so if you snooze, you lose.
    14 Mar 2013, 06:45 PM Reply Like
  • MatchlessGlory
    , contributor
    Comments (36) | Send Message
     
    hmm, no dividend for BAC
    15 Mar 2013, 05:42 AM Reply Like
  • wil3714
    , contributor
    Comments (1905) | Send Message
     
    these buybacks are like 2-3days worth of volume I want that divvy dammit
    15 Mar 2013, 05:44 AM Reply Like
  • MexCom
    , contributor
    Comments (3051) | Send Message
     
    With 10.82 bil shares outstanding (according to what's on Yahoo finance) @ 12.50/sh the $5 bil buyback comes to 3.7% of the shares outstanding. But you have to also consider all the warrants if exercised as to the future benefit of increased value per share. The stock should now be priced at $12.56.
    15 Mar 2013, 06:29 AM Reply Like
  • only11toes
    , contributor
    Comments (23) | Send Message
     
    over 20M shares traded AH, with $12.75 high. shorts didn't anticipate the BB's and got hit very hard. smart money will cover today as they won't leave their position open over the weekend.
    today will be very interesting, just look what happened to JPM and GS. hats off to moynihan and the board
    15 Mar 2013, 08:26 AM Reply Like
  • benitus
    , contributor
    Comments (1938) | Send Message
     
    only....BAC's shorts are diehards...they'll keep shorting as the price goes up, which will keep the price depressed. That's why we haven't cleared $13 yet. Until they bail and convert their positions, we must remain patient and pick up on the dips if we can.
    15 Mar 2013, 03:33 PM Reply Like
  • mbajajsr1
    , contributor
    Comment (1) | Send Message
     
    The CEO of BAC deserves more credit than he gets.
    Jamie Dimon of JPM should learn from Brian Moynihan!
    15 Mar 2013, 01:14 PM Reply Like
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