August 26, 2011 – My Home Run on Bank of America (BAC)


2) My Home Run on Bank of America (BAC). Yesterday, I recommended that followers of my Macro Millionaire program put 5% of their capital into Bank of America (BAC) shares at $6.85. My three month target was $9-$10. Not was that call a total home run, it was one with the bases loaded at the bottom of the ninth inning! (apologies to foreign readers).

Apparently, great minds think alike. Long time reader, Oracle of Omaha, Warren Buffet, announced this morning that he was investing $5 billion into (BAC). The stock immediately soared by 25%, and the rest of the financial sector rocketed as well.

Warren claims that he got the idea Wednesday morning while taking a bath. He is buying 50,000 shares of preferred stock at $100,000 a share with a 6% dividend. Warren also gets in the money warrants which he intends to exercise into the common, making him one of the largest investors in the company.

The move is similar to ones that I have seen Buffet make in the past. I am thinking about his purchase of 10% Solomon Brothers convertible bonds in the early nineties. He was also made chairman of the company in that deal. Warren also swooped in and bought a big piece of Goldman Sachs (GS) at the bottom of the 2008 financial crisis. He made a fortune on both these deals. These were also trades that only Warren could pull off, and that you and I couldn't touch with a ten foot pole.

Warren's investment will no doubt put in the final bottom in the financials in the four month long 'RISK OFF' move. It could also herald the low for the market as a whole, and shines a giant spotlight on my call for a fall, 'RISK ON' rally.

When I put out a recommendation, I don't expect the stock to hit my three month target in a day, so don't expect lightening to strike twice in the same place. If you want to learn more about Macro Millionaire, my highly successful online trade mentoring program, please email John Thomas directly at Just put 'Macro Millionaire' in your subject line, as I have received over 1,000 emails so far today.

Don't bother calling this weekend to say 'thank you'. I'll be having a cheeseburger and a chocolate malt for dinner in Omaha, Nebraska.