After a rip-roaring run in October, it may seem like a good idea. But for most investors it is a very, very bad one.

If you're OK with high-risk, high-reward gambles, then by all means buy BAC. But don't fool yourself into thinking this is a long-term investment with so much uncertainty surrounding the stock, the financial sector and the broader economy.

I exchanged emails with a reader last week who told me Bank of America embodies Warren Buffet's axiom "I buy when others are panicking, and I sell when others are greedy." It is true that many folks remain down on the stock, but many folks also are down on the Miami Dolphins this year. Sometimes the negativity is justified.

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Here's the reality of Bank of America stock:

Customer backlash. If you think the only grassroots movement against financial firms is Occupy Wall Street, think again. There is a growing trend of Americans moving their money out of Bank of America and other major financials, either in outrage over the bailouts or outrage over hostile moves such as a proposed $5 Bank of America debit-card fee (though admittedly, Bank of America is reportedly now reconsidering the move). Just do a web search for "Most Hated Companies in America" and you’ll see Bank of America pretty high on just about any list.

A race to recapitalize. The loss ofcustomers is a double whammy for BofA. The financial stock faces higher capital requirements in the years ahead due to a global banking accord known as Basel III, a framework intended to reduce risk by preventing overlending and demanding a bigger cushion of cash be kept at financial firms at all times. This comes precisely at the time that savers and small businesses may be defecting. Bank of America needs plenty of cash on its balance sheet to carry on a robust banking business in a good market or to offset the risk of another shock if things go south. And despite$5 billion from Warren Buffett, a $8.3 billion sale of China banking assets and the $8.5 billion sale of its Canada credit card unit to TD Bank (TD), there is little evidence that the bank’s capital situation is rosy. Tier 1 Common Equity Ratio for BAC in its quarterly report just a few weeks ago was 8.65%, even as the European Union is insisting Tier 1 capital ratios of 9% in euro zone banks by 2013. Think about that. Even after these billion-dollar paydays, BofA would have to spend another year scrambling to raise cash if America was subject to these capital requirements as proposed across the Atlantic.

Measly dividend. Related to the capital issue is the lack of a Bank of America dividend, currently a measly penny per quarter for a 0.6% yield. The Federal Reserve squashed a proposed dividend increase at Bank of America this spring on fears that it wasn’t healthy enough to start throwing more money around. And Bank of America has yet to even ask for another dividend boost as it scrambles to pay off mounting legal obligations (more on this in a bit) and prop up its capital base. Considering the Fed just blocked a proposal for a MetLife (MET) dividend increase, it doesn’t appear that regulators are feeling generous, so don’t expect that penny per quarter to budge. Considering other banks like JPMorgan Chase (JPM) are pushing a dividend yield of 3%, this nominal payout provides no incentive to buy and hold BAC stock.

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Subprime mortgage woes. This summer, Bank of America paid $14 billion to settle claims on mortgage-backed securities related to Countrywide. That came after BofA settled claims with government-run Fannie Mae and Freddie Mac in January. More mortgage fraud lawsuits are pending, including insurer American International Group (AIG) gunning for a piece of the pie. If bad debts related to risky mortgages weren’t bad enough, the prospect of prolonged litigation over lending practices makes the housing crisis weigh even heavier on the BofA balance sheet.

The economy, stupid. Perhaps the biggest risk to Bank of America is the fact the company is so intrinsically tied to the economy. Some bozo editor of a financial site threw his weight behind Bank of America year ago on the prospect that the company was going to lead the recovery this year, and in fact it has been quite the opposite. As consumers continue to suffer under a brutal job market and stagnant wages, the core business of lending and credit cards is going to suffer for U.S. banks. And even presuming the euro zone did figure out its debt crisis (something I vehemently disagree with) and the Congressional supercommittee fixes America’s own ugly budget without a hitch (don’t hold your breath), there are systemic problems of rising inflation and the very real fear of a China slowdown.

• Related Article:Bank of America CEO Chastises Public

If you want to gamble on a short-term sentiment play, then Bank of America could gap up and be kind to you. That’s what it did just this October, to the tune of 15% in a few weeks. Of course, in August when sentiment swung the other way, it lost 30% in just a few days, but feel free to roll the dice.

But don’t fool yourself into thinking this is a bargain long-term play. Rebuilding Bank of America’s balance sheet and capital reserves will take a lot of time, and in the interim there are too many big uncertainties about litigation and broader economic woes. There’s a possibility the shares could go nowhere for a year or two or even more.

And with a measly one-cent dividend, what incentive do you have to stick around and wait? A better plan is to sit this trade out for a few months and buy in if the dust has settled. I have a strong feeling you won’t be paying much more than current valuations of $7 per share for quite some time.

For my bearish take on the entire financial sector, read a complete take on InvestorPlace.com.

Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace​.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. As of this writing, he did not own a position in any of the aforementioned stocks.

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