Bank of America has been roundly abused by Mr. Market as of late. While a lot of financial stocks have suffered, the bank seems to have been singled out for outright torture. The stock is down roughly 35 percent in August. It's down roughly 54 percent from an intraday annual high set in January.

The Standard & Poor's downgrade selling has been anything but merciful. You can understand the froth. Bank of America faces bad news across the board right now as people continue to speculate about the need for a capital raise, the likelihood that crown jewels will have to be auctioned off or spun off somehow and the mortgage-related legal woes that seemed under control a few months ago. But at the same time, the bank has a strong retail banking franchise and there is a lot of value in that. It may not rise significantly higher from its current price-to-book value multiple of 35 percent, but there may well be a floor in the general vicinity. Read More