Bank of America – The Contrarian

I welcome the Bank of America (BAC) acquisition of Countrywide (CFC), as for the first time as I can remember BAC acts as a contrarian investor. I really don’t know what CFC is worth but I know it is worth more in BAC’s hands than as a stand alone company. BAC will be able to provide CFC with liquidity and staying power to survive through the current crisis. In other words it brings continuity to the table (customers and partners that were having second thoughts about dealing with CFC are likely to stick around now).

I am applauding this deal because typically these are done at the top of the market, but BAC found a restraint to wait till things went to hell. Yes, it was early with its first purchase, but picking bottoms is not easy, even for almighty BAC.