Last week’s question and answer

I was founded in 1868 on a salt dome island in Louisiana by a guy who made a sauce out of spices from Central America. Legend has it that he packaged the product in used perfume bottles. In 1892, he founded a bird colony on the island to protect egrets that were being killed for their decorative feathers. He soon added plant life, and today his famed Jungle Gardens and Bird City attract visitors from all over the world. My sauce is sold in more than 100 nations. Each of my 2-ounce bottles contains at least 720 drops. Who am I?

(Answer: McIlhenny Co.)

Bought at wrong time

What should I do with stocks I bought near their all-time highs? Just sit tight? — T.M., Omaha, Neb.

The price you paid for the stock is important when you calculate your gain or loss for tax purposes. But most of the time, you shouldn’t think about it too much. What really matters is the current price and your estimate of the stock’s true fair price.

For example, imagine that you bought shares of Morse Code Telecommunications (ticker: TAPTAP) for $50 each, and they’re now trading for $30 each.

If you think the shares are worth $40, you should probably hang on. If you think they’re worth less than $30, selling might be best. Ignore the fact that you’re down $20 per share. If you’d bought the shares for $10 each, you’d be up $20 per share, but your thinking should be the same — hang on if you think more growth is ahead, and sell if you expect the shares to falter.

Never hang on to a stock just in the hope of recouping your losses. You can always try to make your money back in another stock, perhaps one in which you have much more confidence.

Before interest rates rise much more, I’m thinking of refinancing my mortgage. Where can I learn more about that? — A.C., Wichita Falls, Texas

Refinancing is still worthwhile for many people. Learn about home financing issues at www.quicken.com/mortgage/refinance and www.fool.com/homecenter.

Open for deposit

Bank of America (NYSE: BAC), the nation’s third-largest bank, is becoming a lean, mean fighting machine, despite having gobbled up FleetBoston.

For its third quarter, Bank of America reported earnings up 29 percent to $3.76 billion. Revenues jumped 29 percent to $12.6 billion, with lending income and fee income rising 43 percent and 10 percent, respectively. The number of consumer checking and savings accounts grew by 537,000 and 624,000, respectively. This growing customer base helped lift retail deposits 11 percent (on a pro forma basis) to $400 billion.

The company acquired more than 1.6 million new credit card accounts with the help of cross-selling and an effective targeted mailing campaign. Net income from commercial banking doubled to $824 million, while earnings from wealth management rose 83 percent, to $469 million.

In the consolidating banking industry, bigger is better. Bank of America’s coast-to-coast geographic footprint, 33 million consumer accounts, and $1.1 trillion in assets stack up well next to giants such as Citigroup (NYSE: C) and J.P. Morgan Chase (NYSE: JPM).

Furthermore, reduced expenses from job cutbacks, streamlined operations and other synergies may yield some $1 billion in cost savings. With continued momentum in consumer banking, signs of traction in commercial lending, improving credit quality and a rising dividend, Bank of America stock, with a recent price-to-earnings (P/E) ratio of less than 12, may be a good place to deposit your investing dollars.