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Why I'm Still Long on Bank of America

The only problem with Bank of America Corp(NYSE:BAC) stems from 5 years ago (mortgage lending and securitization activities during the financial crisis of 2008). How long will investors keep trading the stock at a discount when book value is $20?
All of the other major big banks, except for Wells Fargo are experiencing mortgage
issues stemming from the housing bubble. It seems like the bank cannot catch a
break!

An analysis of the banks most recent earnings showed that profits are being realized through effective cost cutting initiatives. For example, net income rose 63% in the second quarter compared to a year ago. The wealth management side increased assets under management and fees. 40% of the bank’s balance sheet is tide to the housing market, which is currently experiencing a comeback. Current trends are in favor of the bank.

Long term, this stock is a winner as evident by Warren Buffett’s $5 billion investment in the preferred shares. There is no better vote of confidence than Warren Buffett.