BofA's Equity Price Has Cratered- So What's Tom Brown Saying?

I've written a few posts involving former banking sector analyst-cum-banking sector fund manager Tom Brown. Most notably here, here, here and here. He appears on Bloomberg with distressing frequency these days. Just like Bob Albertson- both long in the tooth banking analysts, though Brown is really now a banking sector fund manager. As such, as I noted in one of those posts, when he appears in his analyst role, he's effectively shilling for his own fund.

In that first linked post, I noted that Brown said, in an early June interview, that he'd recently gone long BofA for his fund.

How's that working out, Tom?

Let's see, the market's been whipsawed, banks have been bloodied. What line do you think Tom Brown is peddling this week?

You see, as you'd expect, Brown was on Bloomberg this week exhorting investors to buy more BofA, despite it's getting hammered far worse than the other three remaining large US commercial banks, as indicated in the nearby chart.

It was pretty sickening to hear and watch Brown dance his way to a conclusion that investors would be smart to buy BofA after the pounding it's recently taken. But, without more suckers buying it, how's Tom ever going to get his own position, now down something like 40%, back into the black? Wouldn't you like to be one of Tom's fund customers, opening your quarterly statement in a few weeks, after Brown bet so much on his favorite bank?

As I suspected, the price chart indicates that the smartest move would have been to just stay with the S&P500 and avoid the bank stocks recently. And probably for the foreseeable future, as well.

Incredibly, Brown's excuse....err.....reason for buying BofA now is that it's reward/risk is far higher than it was recently, because so much risk is gone now that it's price has sunk so low. He hurriedly mentioned something about 'sure revenues will be lower, but, gee, that risk is so low.....'

To continue the old Wall Street maxim,

'If you liked it at X, you'll love it at less than X, and marry it even less'.......I think Tom Brown's having children with BofA as it's down 40%.

You can't make this stuff up, can you?