We Study Billionaires - The Investor’s Podcast Network TIP316: Current Market Conditions w/ Preston & Stig (Business Podcast)
Sep 27, 2020
Stig and Preston dive into Warren Buffett's recent investment moves, notably his focus on Bank of America and his sell-offs in bank stocks. They discuss the evolving banking sector and the implications of Modern Monetary Theory. The duo analyzes appealing investment strategies in Japanese trading houses and examines asset allocation amid current market uncertainties. They also touch on the All-Weather portfolio concept while emphasizing the importance of diversification and understanding personal investments in a volatile landscape.
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Buffett's Bank Bet
- Warren Buffett is buying Bank of America while selling other bank stocks, indicating a specific thesis.
- Berkshire Hathaway now owns 12% of Bank of America and has approval to own up to 24.9%.
BAC Price Action
- Bank of America's stock price often falls back after an initial jump from Buffett's buys.
- Consider Buffett's 2011 Bank of America preferred stock purchase as another example.
Interest Rate Uncertainty
- Preston Pysh is unsure about interest rate trends and their effect on Bank of America.
- He believes the bank's reliance on fees versus interest rate income is key.