Why Bank of America Corp Shares Could Fly 15%

Does this analyst make a good case? Or is it just more noise from Wall Street?

Jul 2, 2014 at 9:54PM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Bank of America (NYSE:BAC) gained 1.6% today after Deutsche Bank upgraded the banking gorilla from hold to buy.

So what: Along with the upgrade, analyst Matt O'Connor boosted his price target to $18 (from $16.50), representing about 15% worth of upside to yesterday's close. So while momentum traders might be turned off by Bank of America's price weakness in recent months, O'Connor's call could reflect a sense on Wall Street that the concerns surrounding its growth trajectory are becoming overblown.

Now what: According to Deutsche, Bank of America's risk/reward trade-off is rather attractive at this point. "We think the most meaningful negative catalysts have been identified and largely priced in," said O'Connor. "From here, Bank of America is well-levered to a potential pickup in capital markets revenues, higher interest rates, and an improving US economy." When you couple that upbeat outlook with Bank of America's cheapish price-to-book of 0.8, it's tough to disagree with Deutsche's bullishness. 

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Brian Pacampara owns shares of Bank of America. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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