Take a look at my reasons for purchasing Bank of America stock. Buy now and reap 300 percent return on your investment.

I am putting together a compilation of stocks I would be buying if I had any money to invest right now.  Absorb these words, and you WILL reap huge returns in the stock market (outlook is 5-7 years).  Today I will be giving you stock #1 to buy and providing reasons for this purchase. 

The stock is Bank of America and at this moment in time it is trading around 14 dollars per share.

  1.  Look at 1990, the stock market did relatively the same exact thing, and the next ten years led to some of the greatest advancements in stock market history. 
  2. Stop looking short term, you are saving long term, IGNORE the news and all the people saying the sky is falling, look at the business.
  3. Banks have been around forever, they are not going anywhere anytime soon.
  4. Bank of America earned 21 billion in 2006 , 14 billion in 2007, and 2 in 2008.  The acquisition of Merrill Lynch will soon provide several billion in income per year.  Let’s say that in 5 years Bank of America returns to 2006 level and makes 21 billion a year, and Merrill lynch makes 5 billion.  That is 26 billion on the income statement.   Currently 6 billion shares are outstanding.  Divide 26 billion by 6 billion to get our earnings per share in 5 years.   We get roughly around 4.4 earnings per share.  Now multiply that by Bank of America’s avg P/e for the past 10 years (12) and we get the price per share- right around 50.  If you bought Bank of America today, at 15 dollars a share, and waited 5 years for them to fully recover, you are looking at TRIPLING your money. 
  5. Margin of Safety, Ben Graham and Warren Buffet love this.  BAC is selling at a 66 percent discount from its estimated value in 5 years. 

Next stock- GE