Warren Buffett has invested a little more in the past few days and weeks: in addition to own shares and an infrastructure acquisition, there was in particular Bank of America (WKN: 858388) on the shopping list of its holding company Berkshire Hathaway (WKN: A0YJQ2). That, in turn, is very remarkable.
The US money house is the second largest holding in the Omaha Oracle portfolio. At $ 1.2 billion to date, this equity position has been consistently expanded. Most recently with a share of 11.5% or in absolute terms with 998 million shares in the money house.
However, that doesn’t seem to be enough: As the US broadcaster CNBC reported, Warren Buffett’s shopping spree at the bank continues. So let’s take a look below at what you should know as an investor and what that means for the Berkshire Hathaway investment company.
Shares totaling $ 1.7 billion
As CNBC reported, Warren Buffett has raised another $ 522 million and invested in Bank of America stock. The Oracle of Omaha received another 21.2 million shares in the money house. Definitely a remarkable step, which, by the way, should raise the number of shares to over a billion. Or the relative share to over 11.8%. Warren Buffett is consequently expanding this position.
The Oracle of Omaha has struck powerfully in the last days and a week or two: A first tranche of $ 813 million has initially been announced. And just recently a second tranche of approximately $ 400 million. If we add up the last $ 522 million, we get a total stake of $ 1.7 billion for the past few weeks. Is the trend possibly increasing? Yes, maybe if we continue to follow this trend.
The average purchase price was $ 24.65 this time, slightly higher than his previous transactions. That shouldn’t make Warren Buffett sweaty. The total value of this share package should now total over $ 25 billion. CNBC also highlighted that since July 20, Warren Buffett has bought Bank of America shares on every trading day. Let’s see if it continues next week.
Warren Buffetts Circle of Competence
As we can see from these investments, the Omaha Oracle remains true to itself. Bank stocks are practically his living room if we imagine the world of stocks and stock exchanges as a house. That’s the area where Buffett grew up as an investor. A perspective that we at Berkshire Hathaway investors may like.
The star investor continues to try not to chase trends. No, he invests in what he knows and where he can best assess the opportunities and risks. Beyond trends. Beyond short-term thinking. Always with a view of the big picture, which can mean returns over years and decades.
That, in turn, could be an important distinction right now: given the corona virus, markets may now be more short-term oriented. Tech stocks are cheered up, more solid stocks and boredom come to an end. A market environment in which the oracle of Omaha seems to feel comfortable. As I said: at least with a long-term perspective.
Different Thinker Warren Buffett
And once again it shows that Warren Buffett emphasizes his qualities as a different thinker. He is not bothered by the comparatively high valuation situation. Or trends. No, stocks will continue to be bought from a long-term perspective, which he now sees as cheap. Or have an attractive risk-reward ratio.
Will that also reassure the critics? One can doubt that in the short term. However, his purchases show that Buffett doesn’t care about the critics. And as investors, we probably shouldn’t.
The post 3 x Bank of America: Warren Buffett’s shopping spree continues! appeared first on The Motley Fool Germany.
Vincent owns Berkshire Hathaway shares. The Motley Fool owns and recommends shares of Berkshire Hathaway (B shares) and recommends the following options: Short September 2020 $ 200 call on Berkshire Hathaway (B-Aktien), Short January 2021 $ 200 put on Berkshire Hathaway (B shares) and Long January 2021 call $ 200 Berkshire Hathaway (B-Aktien).
Motley Fool Deutschland 2020