I agree on BAC, hehe. But if you asked 12 months ago, the vast majority of investors would have called it a very 'high quality' institution -- The market certainly seemed to think so when the stock was $16+.
The market is often dumb, most usually with companies below 1-2 Billion in market cap -- The more visibility a company has the less chance of Mr. Market being dumb.
Take GKK for example, trading below cash on its corporate-entity for quite awhile when I bought it at $2. Solid earnings flow and below cash? Huh?
A simple time period to study, to prove beyond a doubt that Mr. Market can be dumb for extended periods of time, is to study the Jan-March 2009 period. How many non-recourse REITs had preferred shares trading at below 10% of face value? I could provide endless examples from that time of Mr. market being panic-driven and ultra short-term minded.
In this day and age where stocks move in a highly correlated fashion due to ETF's, Program Trading, and so forth...How can one expect the market to be ANYTHING but stupid when it comes to specific companies? I mean, when individual stocks have 90%+ correlation to market movements you know something is wrong and babies are being thrown out with the bathwater.
-Fernando
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