Oil is below $27 per barrel sent the DOW to the 15000s. I take this opportunity to increase my BAC position.
I’ve been buying BAC from $6,$7, $8-$17/share. So, I’m delighted to see BAC is now back at the $13.xx. Buying aristocrats are great. I’ve been soaring up on BAC, raiding my cash position to buy more BAC shares.
Couldn’t hold back any longer that these sell offs. 🙂 BAC has just reported earning 9% increase in net income. The financial institutions are making a killing at the moment. (JPM, C, BAC, GS, MS are all beating earning estimates). The financial sector sell off has nothing to do with the lagging of the American economy, 5-10% exposure to oil and gas lending from WFC or JPM doesn’t effect their earning as a whole. My gut is telling me to buy the very sector that is making a profit rather than buying oil stocks that hasn’t been beaten down as much given $27/barrel is putting them at a loss.
Now, my eyes are still on cvx, a member of the aristocrats. I read a report the other day since COP has spun off Phillip 66 which is the refinery business (Buffett is buying it), it doesn’t have the same leverage, therefore dividend will be a threat to their balance sheet. At 7% yield, making negative income, having to sustain $2-3 billions in dividend payout is massive. I’m mindfully watching the oil and gas sector for now.
Have you bought anything? What do you think about my buy? How much cash are you saving or you are unloading everything and see this crash as temporary? Please share your thought.
Full disclosure: I own shares of bac, JPM, wfc, c, and GS.