This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Considering Bank of America Ahead of Earnings

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently." -- Warren Buffett.

NEW YORK ( TheStreet) -- Although Bank of America (BAC - Get Report) has been around much longer than 20 years, over the past 36 months, the bank has experienced many such events lasting longer than "five minutes" that it would gladly have taken back if it could.

The company will be forever tied to several "five-minute events" -- not the least of which is the fact that it is perceived to be as one of the primary drivers of the financial crisis, bringing to the forefront the infamous words "too big to fail." But until the U.S. foreclosure crisis comes completely to a halt, it is hard to say with any certainly to what degree Bank of America must work to restore its reputation. But it's not because it isn't trying.

Forgiving and Forgetting

In the stock market, solid earnings and exceeding expectations have always had a way of mending many broken reputations. The bank has been doing its best to say I'm sorry, and from its stock performance so far on the year, investors appear ready to forgive.

Even the biggest bears were compelled to offer a round of applause for a performance that yielded profits of $2 billion after suffering losses that topped $1 billion from the same period of a year ago. It posted full year earnings of $1.45 billion -- representing an increase in profits of 164%. Revenues increased 11% to $25.1 billion generating earnings of 15 cents per share.

What I didn't know at the time was that the bank's performance was going to be the first of many such positive surprises for the entire sector as rivals JPMorgan (JPM), Goldman Sachs (GS), Citigroup (C) and Wells Fargo (WFC) all produced better than expected results.

What was remarkable for Bank of America's performance was the fact that leading into its announcement and trading (then) just over $5, the entire market was wondering about not only its ability to survive, but what it can do to shed its image of a villain -- one furthered by its initial decision to enact a $5 fee on debit card usage. But it thought better of it and ultimately nixed the idea.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $14.56 -1.56%
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%
TSLA $240.76 -2.81%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs