We have all this hoopla because John Paulson decided to buy Bank of America--and we also know that he picked up 100 million shares at BAC's offering at $10.
I of course, touted the stock then when they had that offering, here, on May 20, after I touted the stock here, on March 10, when it was just $4.79.
But this is what you need to remember. On March 18, with BAC at 7; I said "But it's just getting started! What's the difference between 7 and 12? In valuation, in Bank of America, there isn't any!"
So now BAC is at 17.
What is the lesson to be learned by this? Well, I touted this number to 22 on my Dow year end piece, and that's where it is going.
But Wall Street doesn't learn lessons. Because if they did, they would be buying Citigroup right now, because at 4, it is on the way to 7, and then on the way to 12, just like BAC.
Because what's the difference between 4 and 7 for Citigroup when insolvency is taken off the table?
There is none! Just like there wasn't a difference with BAC either!
I'm giving you the script before it happens, but no-one on Wall Street wants to hear it.
You don't buy my reasoning? You don't have to--I'm not touting my reasoning; I'm touting the stock. That's what you need to buy. But if you want some circumstantial evidence, then take a look at Regions Financial, which was up 8% today to $5.20 on 66 million shares.
Now didn't we hear the bears breathlessly proclaim yesterday that Regions was insolvent? And didn't we have this nice little picture to go with the story?
A cursory look at the highlighted area will show that the fair value of $90.8 billion of loans is just $68 billion by Region's estimations.
So what happened to the stock? With this supposed $22 billion "ding."
Didn't it go up?
And what's the market cap of Regions? $6 billion?
So then, why would Citi be hurt if Regions can't even get dinged with news like that?
The high frequency traders (remember that story?--whoops is it over already?) are just frustrating shareholders of C, just like they frustrated shareholders of FITB before it doubled, a number I was touting at half the price at $5.34, in my "Rainbow Twenty" piece.
And now, I have to get another model on this piece, just to get someone to look at it.
Because Wall Street always looks in the rear view window, instead of looking at where things are going.
So enjoy the rear view.
I'm checking out where they are heading! And when will it hit these targets?
Well last I looked, it said Christmas Delivery Guaranteed!