Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., said the rally in markets over the last several years has made it harder to find bargains, but that stocks remain his choice over bonds.
When asked why cash has been piling up at Berkshire, he told “It tells us stocks aren’t as cheap as they’ve been most of the time.” Buying shares after the 2008 financial crisis, Buffett said, was like “shooting fish in a barrel.”
Stocks “have gotten less attractive as they’ve gone along,” Buffett told. “They’re still very attractive compared to bonds” because interest rates are so low.
Even as valuations make it harder for Buffett to find new investments, some of his older ones are paying off. On Tuesday, Bank of America Corp. said that Berkshire had converted its preferred stake into common shares. The transaction locked in a paper gain of more than $11 billion on an investment that Buffett made six years ago, when the bank’s shares were tumbling amid probes tied to the housing meltdown.
“They were in significant trouble, but that’s like a great athlete being in the hospital for an accident,” he told. The decision to convert the stake, he added, was “fairly automatic” since Bank of America’s common shares now pay a higher dividend than the preferred did.
Source: Bloomberg Pro Terminal
Trader Bozhidar Arabadzhiev
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.