Warren Buffett Recession

Warren Buffett is famous because many of his stock predictions come true. He has a net worth of $81 billion. This means that people who trash him as an old hack have no grounds for doing so when in fact, he knows what he’s talking about. One of his rules is to avoid anything trendy like cryptocurrency. In 2011, Bank of America was struggling but Buffett had bet on the company’s comeback, which did come true and allowed Buffett to receive preferred shares of Bank of America, which paid an annual dividend at 6%. The rights he received included the right to buy warrants of 700 million shares of the banks common stock discounted at $7.14 each by the year 2021.

Flash forward to summer 2017, Bank of America passed the Federal Reserve’s “stress tests” meaning that it was able to boost its annual dividend, a dividend is a portion of the companies earnings distributed to shareholders who own stock. Bank of America common stock was worth $24. Buffett made a profit of $12 billion from $5 billion. On the other hand, the airline industry was something Buffett had initially criticized at first because in 1989 Berkshire had bought $358 million of preferred shares in U.S. Airways, which dropped in value quite suddenly.

By 2016, Berkshire had made a bet in the airline industry. Buffett was very wrong on tech, however, such as giants like Amazon or Google, whose shares were $10 or $11 per advertising click and 2017 found Buffett regretting passing on Google as well as Amazon. During the Trump administration, the Oracle of Omaha has predicted that the economy would stay well, and another of Buffett’s most used strategies is to find a company that has a monopoly and buy it before anybody else can do the same thing that company is doing.

Leave a Reply

Your email address will not be published. Required fields are marked *