Bank of America (BAC)

The "too big to fail" banks have had strong recent earnings. US economy is doing quite well right now, benefiting from lots of tailwinds, new US president is pro-business. This position makes sense.

Whether to trim is more a question of portfolio weighting. Look at the money in your overall portfolio and in BAC specifically. If that position is over 5%, or 7% on its way to 10%, then maybe trim down to 2-3%. That way, if things reverse and the price comes down, it won't have an impact on your overall portfolio.

They just reported a modest revenue beat and strong earnings beat. All 4 segments grew, though cost controls were merely okay at a modest beat. Expense guidance was merely in-line. BAC is doing fine, not great like its peers.

Growth, but a lot less than Citi. The banks each take their turn to shine, and you want to buy them at different times.

There will be only 2 rate cuts next year, not 3 or 4. Adjust your expectations. So, this stock is fairly valued, though buy under $40.

Incredibly well run. Better opportunities than others because it has other businesses that don't rely on interest rates, such as credit cards and investment banking. Bigger and better than others, able to do more M&A as well.

Whether to take gains is a function of percentage in your portfolio. 5% is OK, but if 10% or more think about taking some off the table. Too big to fail. Exceptional job cost-cutting. May be trending toward deregulation, so US domestic banks would be more shielded.

Was upgraded today. Because of Merrill Lynch, BAC now has scale--that theme is finally working.

He added more last week. Is puzzled by a downgrade today. Trades at 1x book and run by a great CEO. Capital markets will open up and benefit them.

They report tomorrow. He wants to hear the latest about credit card and lending as rates have come down. Also, will watch for housing.

They report tomorrow. Earnings are often predictable, though you don't know what he trading and investment activity will be for GS. He expects earnings to be robust and the messaging positive. For GS he also wants to hear about their foray into retail, though this is absorbed in the stock price. BAC's retail operation has been successful, and he wants to hear about credit delinquencies given that consumer debt is at all-time highs. He expects more of the same from these two banks.

Likes the money-centre banks like this one, as well as the investment-centred banks. US economy is improving. 12x PE, not expensive. 13-15% earnings growth for 2025 and 2026. Decent dividend of 2.6%, has grown by 9% a year over last 5 years. This is a more conservative play than banks like GS or MS.

We're into an easing cycle on rates. What's working in the market are early cycle companies, rather than late cycle. Likes financial services in general. Buffett's sold some BAC, but he's been raising cash for quite some time now, and there's some question as to why -- transition planning, unenchanted with the stock, or something else?

His top choice is JPM, one of his top 5 holdings. You'll be OK with BAC -- market's OK, as is the sector. Getting paid well, with probably high single-digit dividend growth. Stay with it.

Share prices fell after Berkshire sold their holding, but they have decent leverage to the consumer and have the best leverage to improvement in the bond market.

Great company, even though Buffett's sold a bunch (he still owns north of 10%). Rates coming down will improve bank funding sources and bond portfolios.

Berkshire is selling some of their shares, a big holding, but doesn't know why. (Is Berkshire raising cash?) Trading at an historical discount in terms of book value and earnings. Banks are heading to a good place because the yield curve is normalizing as rates fall.