The Bank of America – Literally

With its additional $20 billion bailout of Bank of America, the federal goverment becomes the bank’s biggest shareholder.

Like everything else it does, the government is terrible at portfolio management. Whereas other investors look for strong companies with earnings growth, the government invests only in crappy companies. As of this writing, BOA is trading off 14% since the government announced its latest big investment. Its big stake in Citigroup isn’t doing so well either.

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