As you probably know, Warren Buffett gave BofA a $5 billion vote of confidence yesterday. That sent the US markets up north for a short while.
The other point to note is that the whole world is focus on Jackson Hole tonight.
What is puzzling is that
· There had been no capitulation in the past week
· The VIX index is not at its high
And the puzzling factor is his announcement of BofA vote of confidence a day before the Jackson Hole event.
While the whole world is rebalancing their portfolio, he makes a big investment before the Jackson Hole event.
Does he know something we do not know?
Is he losing his touch?
We’ll find out tonight and watch how the markets will react the following week.
I thought the above is worth pondering.
The market has already gone down quite a bit, and BOA had suffered. Warren Buffet typically does his numbers and he has probably figured that BOA was worth its valuation.
ReplyDeleteIn any case, his investment is a reasonably protected one. Berkshire is getting regular income payout from this deal, with the bottomline protected. So long as BOA doesn't go Chapter 11, this deal is painless and guaranteed rewarding.
Thanks for sharing and enlightening the situation!
ReplyDelete