bank

Why Warren Buffett is making the wrong move on Bank of America: Investor

buffett's berkshire hathaway has bought

bank of america shares

for 12 straight days sirot you own it

what do you make of this move

uh i do own it i mean scott the stock's

still down 27

for the year we like it we like it for

its diversified uh

businesses i think it's the right place

to do but i've been wrong for the last

you know year owning this talk

but i think going forward as we get

closer to i think you know a normal

market whatever that's going to be

bank america's in a great place so is jp

morgan so are some of these banks that

have the ability

to have a huge large customer base have

wealth management m

a they have you know a lot of businesses

and are trading when you look at the

market at a very

cheap value yeah the catalysts are not

there yet

and and i could you know see that but i

think he's doing the right thing

accumulating it now so that if and when

the stock price does move up he's got a

good

position in it yeah joe 12 straight days

right for buffett stocks up eight

percent

uh in that time frame maybe giving it a

little bit of a jump start

337 million dollars that they've spent

they now own almost 12

of the outstanding is this a good move

and should investors follow the oracle

into bac

and maybe the banks more broadly

well i mean scott he could buy it for

another 12 days he can't really fix the

headwinds that are challenging the money

center banks you know that i'm in jp

morgan that's the one bank that i think

is the best in breed as it relates to

bank of america the reasoning

behind why i am not in that is just the

significant consumer exposure

that it has in the absence of trading

revenue

that you will find in some of the other

uh financials like a morgan stanley of

goldman sachs and even jp morgan which

reported a strong quarter so

no i wouldn't suggest if you're going to

be picking one of the money center banks

that i would buy bank of america if

you're you know buying bank of america

right here you might as well just go buy

wells fargo because i think you'll

probably have more

upside return uh if there is an

environment where the banks

all boats seem to rise so i think you

still have to stay best in breed

which takes me to jp morgan and if we're

going to the thesis that all banks are

going to rise well then you go wells

fargo

wow okay steve weiss joe says buffett's

making the wrong move

what do you say

i don't think steve can hear me brenda

um you know if you look at the

financials yep

joe painted a picture of why they

haven't worked um you know it's no

mystery

but it's now the time to get in like

warren buffett is doing even if it's a

little bit early

i think it really depends on your time

horizon you know warren buffett is known

for being incredibly patient

and for sitting on trades that might not

work for a while um

so i think if that's how you're feeling

then it might not be a bad time to start

nibbling but i don't think we're really

going to see any real traction in this

group

until we start to see more of an

economic recovery scenario playing out

that involves interest rates moving

higher you know we kind of got a couple

weeks ago a little bit of a

a reality check when we saw how much the

many of these banks had started building

the reserves so they definitely are

exposed in many ways to the economy and

to the consumer in some ways um

we own jpmorgan that is also our only

holding

in this space so we haven't completely

abandoned the group but just think that

we are not

yet prepared to start adding more

exposure here given what we think is

going to potentially be a longer term

time horizon

uh before you really see a recovery so

joe you're you're going to get a vaccine

right you

you agree with that right you're

optimistic about that

right you're optimistic about that i

think you're going to get multiple okay

yes

multiple vaccines okay so economic data

today decent you think we're going to

get a decent snapback

in the economy as you get into 2021

so i i heard the conversation that you

had yesterday with josh and john

and i know john used the words rage and

and uh josh seemed to feel as though

uh it'll be the moment where we'll we'll

just feel this euphoria in

in the capital markets i still believe

scott that the areas of stress and

strain

as it relates to airlines and travel and

entertainment and brick and mortar

retail

and even some of the financial

institutions you're better served

as mark lazary has discussed with you in

the credit market not

in the equity market so you're telling

me in that environment

where we have a euphoric lifting uh in

in the equities market that i'm not

going to be okay continuing to own

microsoft and

apple and home depot and nike and

docusign

and names like that i believe that i

will be i'm still not willing

on the equity side to step out and buy

the components

of the covet 19 stress and strain

industries

that have been so challenged throughout

this pandemic weiss i think we got you

back

what do you make of this buffett move

right it's not one day not three days

not eight days

12 straight days they've been adding

shares of bank of america

well you know it's interesting uh i

could probably buy it all for them in

one day

but away from that if i were to buy a

money center bank

it would be bank america i do think

they're a best in breed

i don't think moynihan gets enough

credit for the job that he's done

he's not as visible he doesn't do all

the conferences

that jamie dimon does but look at the

execution

it's been nearly flawless despite being

tagged if you go back

to the issues that the government put

them into

with merrell etc in the housing crisis

so i'd buy that however i agree with joe

the headwinds are much too great here

the feds out there saying that we're

gonna you know adjust our inflation

target

so you can see low rates for a very very

long time that's a headwind i don't

think you overcome

so there's a new valuation normal for

bank stocks and i think you're at it

right now so

i'm not there wow i can't get anybody to

get excited about this at all boy

have time's changed sirat i told you

that buffett

endorsed your your ownership of bank of

america he's been buying it for 12

straight days and you

you know i guess so uh no one seems to

be excited about it

no one likes the financials

scott i like it when they don't like the

financials okay let them not like the

financials i think there's value here

and i think when the value comes back

you're going to see a lot of money

rotate

and yet you know joe had some great

stocks in there but i like bank america

and j.p morgan i don't like wells fargo

i think the

management team as white said are the

ones you want to buy and these are the

companies and the big money center banks

that you want to do

you