Editor’s note: This article was first published in August 2011, as a news item from 25 and 26 August 2011 about Berkshire Hathaway’s investment in Bank of America.
As you’ve probably heard, billionaire investor Warren Buffett decided to lend Bank of America a hand by investing €3,500 million in shares that had fallen around 46% because of investors’ doubts about the bank’s liquidity and other problems.
Once the news broke that Buffett would invest in those shares, it became one of investors’ favorite stocks, since Warren Buffett bets on sure things. Although, if anything, I’d say Mr. Buffett makes his bet a sure thing when he makes his intention to invest public. Fifty-nine minutes after the investment, Bank of America’s shares had risen 15%, so Buffett made just over €500 million.
This confirms something we discussed earlier about investing in the stock market: sometimes an investment guru doesn’t so much call the market trend as directly cause it, because any investor will follow in the footsteps of people like Buffett.
Today, people in the United States joke: “If your company’s stock is in trouble, Buffett knows how to fix it.”
Further reading
- Understanding stock market investing: for beginners
- When algorithms rule the stock market
- The best investors in history and their returns
Featured image: Ken Lund from Reno, Nevada, USA, CC BY-SA 2.0, via Wikimedia Commons.
.jpg){kind=link}