The financial market was sent into a turmoil yesterday when Barack Obama responding to public rage over the financial crisis, proposed the most far-reaching bank overhaul since the 1930s.

Shares of all the major banks plunged since the result of his proposals were unclear and the details were few.  In the worst case, the banks may have to divest themselves of some businesses.  For example, Bank of America may have to divest Merrill Lynch.

In our view, this is a great buying opportunity in Bank Of America stock for the following reasons:

1. The chance of this proposal passing Congress causing BAC to divest  is remote to begin with.

2. Barney Frank has stated that there would be no forced bank asset sales for five years.

3. Bank analyst Dick Bove says this morning that the Presidents action would be a long term boon for the stock price of banks. That result is our view as well. The whole is currently much more than the current sum of the parts for Bank of America.

The best opportunities in the market are when you invest but can win no matter what happens. The reduction in the Bank Of America share price is a short term investor opportunity. The headline risk in Bank Of America has reduced the price of BAC to under our original entry price.

The stock price is a long term bargain. We are adding 500 shares at the market open today to both our Retirement and Growth Model Portfolio's.  We also like the 2012 Bank Of America 17 leaps.

For more on Bank Of America read: Bank Of America Investment Opportunity

As always, please do your own due diligence. eWorldvu members currently owns BAC stock and 2012 leaps.  

http://www.eworldvu.com

Update on Friday, January 22, 2010 at 12:41PM by Jim Smith

500 shares BAC bought at 15.26 in both the Retirement and Growth Portfolio's.