First, BAC is not "high quality" by any stretch. Nobody knows the true value of their assets b/c they aren't required to make that disclosure via MtoM accounting. According to some very smart money, they are insolvent and will eventually go bkpt in a downturn absent a bailout of some kind. In that sense they aren't that all that different from a China RTO.
The rest of the names you mention are commodity plays, which are naturally levered to the economy. The economy is going into a recession, thus they are selling off. Bear in mind that many would argue that we started this downturn with commodities in a QE2 induced bubble. The bubble is now collapsing. Pick your bottom.
I think commodity investing makes sense, provided that you have a name that has not underperformed the market based on its characteristics, and provided that you can be confident the commodity itself is undervalued. Remember that it's the entire commodity space that has been routed, so when you have a stock that vastly underperforms the sector, something else has to be at play. That "something else" is usually what ultra-cheapie investors find out about at the bottom, after they've lost all their money.
2morrow has a penchant for picking stocks of this latter kind, stocks that are either ultra-high fraud risk (China RTO's), or that have vastly underperformed their peers for reasons as yet unknown. He seems to think he is the "smart" money in the face of a "stupid" market. Well, my point is that in every single case so far that I can see, the market has been right and he has been wrong.
Bottom line: value investors need to have a little more respect for Mr. Market. If a stock has significantly underperformed, and you want to pump it, you should be able to justify the underperformance by offering a compelling explanation for exactly why Mr. Market has taken the stock down, and for why Mr. Market is wrong to have done so.
