In the end, he was accused of lacking ingenuity and helplessness, since the major US investor no longer knew where to put his money despite the crisis. Now he has made a substantial investment. In a bank. Why?
The American star investor has appeared in the past few months of the corona pandemic Warren Buffett not at its best, either finews.ch reported. Instead of stocking up on new shares in the days of the total stock market crash last March, he surprisingly remained on the sidelines. Had the high losses he suffered with airline stocks spoiled his mood for new commitments?
That was to be expected, and he was not particularly inspired at the General Assembly, which he had to face alone for the first time due to the social distancing guidelines. But now, for his many disciples, too, finally, Buffett has made a new investment, as was announced recently based on information from the US Securities and Exchange Commission.
However, the commitment is not entirely new, but at least the “Oracle from Omaha” has bought Bank of America (BofA) shares for $ 800 million. Buffett increased the share he already owned to 11.3 percent. This is behind Apple’s Buffett’s second largest investment within its holding, Berkshire Hathaway.
But why did the grand master of equity investment continue to participate in a bank? The question is justified, especially since Buffett had already separated from his proud participation in Goldman Sachs this year. Against the background of persistently low or even negative interest rates, “financials”, as bank names in jargon are also called, are not necessarily a hit, like the Zurich university professor Thorsten Hens on Monday to the Swiss stock market newspaper “Finanz und Wirtschaft” (Item subject to a charge) had explained.
Stagnating and heavily in debt
The fact that Buffett still accessed may have a different cause. The now 89-year-old investor relies on companies with (once) big and strong brands, as expert Hens further explained. That may have helped him succeed in the past. But in an increasingly digital world, there is a major rethink in this regard.
A “good” negative example of this attitude is Buffett’s involvement in the food company Kraft Heinz, which has been heavily in debt for years and has to visualize stagnating sales.
Quite the old man
He can only hope that things will go better with the Bank of Ameria. The bank lost around 26 percent of its market value during the crisis. That is significantly more than competitors like Goldman Sachs (-15 percent) or Morgan Stanley (-5 percent).
Perhaps that is precisely why BofA shares have more (catching up) potential. Seen in this way, Buffett has remained true to himself with his latest investment: buying undervalued value stocks.
More and more efforts are being made to abolish cash. What is tomorrow’s payment method?
Cash will stay.
The Bitcoin will prevail.
Gold will make a comeback in small denominations.
Soon we will only pay with the credit card.
New virtual currencies that we don’t know yet.