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Testimonials

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Sandro Rosell
FC Barcelona President
Wednesday, October 18, 2017

Warren Buffet, the 86-year-old investor has once again proven that he remains a primary model of how to invest.  Back in August 2011, Bank of America was struggling after the financial crisis.  While most investors abandoned their positions, Berkshire Hathaway, led by the Omaha Billionaire, stepped forward with a $5 billion investment in the bank’s preferred shares.  Shares were down 30 percent to $7.14 per share, at the time of his purchase. The investment paid off a 6 percent dividend annually, making the investor $300 million a year. The preferred shares also included an option to buy 700,000 more shares at that same price. Now 6 years later, Bank of America shares are trading at $24.32 per share, nearly three times higher than the price he paid.

On Friday June 30th, Berkshire Hathaway invoked its right to purchase 700 million additional shares in Bank of America. The esteemed business mogul is now the proud owner of $17 Billion worth of BofA stock and has profited a whopping $12 Billion on the investment.  Berkshire is now the largest shareholder in Bank of America, overwhelming even Vanguard, the mutual fund giant. To top it all off, Bank of America announced last week that they will be raising the annual dividend payout from 30 cents to 48 cents. Berkshire Hathaway’s 700,000 new shares will now bring in roughly $336 million annually. Overall, if we include the interest he made on the preferred shares, Mr. Buffett made an approximately 175 percent profit on his investment. Not bad at all for a six year investment.  As reported by the NY Post, over the same time period, following the crisis, any investor who invested in the S&P 500 would have pocketed a nice 80 percent return. 

Mr. Buffet is still, debatably one of the most successful investors in the world. He is ranked as the second wealthiest person in the United States, and the fourth wealthiest in the world, of March 2017. According to Wikipedia he has a total net worth of $73.3 billion.

By:  Ilana Siyance