Two new stock picks that will surprise you

It’s S’s over Ns this morning, as the DJIA and S&P 500 are both up while tech is mainly down.  I’m going to blow your mind this morning with the contrarianism of the trade I’m about to put on.  I’m going to buy some BAC common and some Goldman Sachs calls this morning.  Yes, I’m serious!  Did you see I wrote this yesterday:

Bank of America Deathwatch: $50 Billion Securities Fraud Suit Over Merrill Acquisition – Anybody who reads me knows that I’ve been short the banking sector for the last year or so and that it has been a huge money maker.  I am wondering if its getting to be time to buy the worst of the best names in the sector (think the aforementioned layoff-happy Goldman and Bank of America) for a trade with a time horizon measured in months.  The TBTF banks are still pretty much all insolvent without continued government welfare/accounting-gimmicks, but that doesn’t mean they’ll go bankrupt in the US this century or that there’s not a trade or two to the long side.

Cody here back in real-time.  You guys know how profitable being short these financials has been this year, and while I continue to think that these two companies and most other TBTF banks would actually be insolvent without the ongoing trillion dollar welfare bank programs and the fake-but-legal-in-21st-century-US balance sheet figures, it’s not like any of that is going to change tomorrow.  Indeed, in this Republican/Democrat Regime’s current Administration, which is just as owned by big banks as the previous ones, they’re likely to help these two companies in particular if there are any further EU or other credit crisis that pop up.  We’ve got the WFC and LPS shorts in this sector which have been wildly profitable and I’m going to hold them steady for two different reasons.  WFC is likely as bad off in mortgage/balance sheet problems as BAC is, but I don’t think it’s been recognized much if at all at WFC while BAC has really been a target of the shorts and analysts.  And LPS, as you know, I think is a broken company and I’m not ever planning on covering that one.  Getting long a little BAC and a little GS will work as a nice hedge/counter to those two shorts too.  I’ll probably scale into these positions today and tomorrow and maybe a little next week depending on how they move and what news develops.  But there you have it — two new longs…and they’re banks at that.  Wow.