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TK, here you go. But this was a transaction made prior to the crisis, and Buffet may have been kept in the dark, but I'm still not buying his diligence or leap of faith in BAC at that point. He was canvassed into buying back then, as he is being canvassed by now.
I don't know. Only time will tell. He has sold one leg in 2010 at a loss of 75% And I wonder why he would put a heavier amount now unless somebody was at the other end of the line asking for his patriotism and social service.
It only comes across as a charitable act. But his transaction put some money in my pockets, so I'm not complaining
But I won't take this as a long term buy signal, except for some short term strategies. But that's just me and my antlers.
TK, here you go. But this was a transaction made prior to the crisis, and Buffet may have been kept in the dark, but I'm still not buying his diligence or leap of faith in BAC at that point. He was canvassed into buying back then, as he is being canvassed by now.
I don't know. Only time will tell. He has sold one leg in 2010 at a loss of 75% And I wonder why he would put a heavier amount now unless somebody was at the other end of the line asking for his patriotism and social service.
It only comes across as a charitable act. But his transaction put some money in my pockets, so I'm not complaining
But I won't take this as a long term buy signal, except for some short term strategies. But that's just me and my antlers.
Good point. I am not following Buffet into BAC yet. There is something about his purchase I don't understand.
Buffett gives Bank of America (BAC) $5 billion and will get preferred stock yielding 6%, plus warrants. I really don't understand what that means.
Why didn't he just buy common shares?
How much money can he make off this investment with BAC, not including the warrants? but the interest.
I think whats important is why Buffet is doing this. He is doing this to get a profit from BAC, just like he did with GE and GS in 2008.
I see like this: he has money, BAC needs money (although the CEO said they didnt need money weeks ago). So Buffet gave them 5 billion at a 6% interest. The warrants are just icing on the cake.
Good point. I am not following Buffet into BAC yet. There is something about his purchase I don't understand.
Buffett gives Bank of America (BAC) $5 billion and will get preferred stock yielding 6%, plus warrants. I really don't understand what that means.
Why didn't he just buy common shares?
How much money can he make off this investment with BAC, not including the warrants? but the interest.
I think whats important is why Buffet is doing this. He is doing this to get a profit from BAC, just like he did with GE and GS in 2008.
I see like this: he has money, BAC needs money (although the CEO said they didnt need money weeks ago). So Buffet gave them 5 billion at a 6% interest. The warrants are just icing on the cake.
The lesson: The “spinmeisters” will not like this, but in my view, such “confidence building moves” are signs of crisis. Just one week ago the CEO of BAC said the firm didn’t need to raise any capital. This is so reminiscent of 2008. Buffett’s investment is to support the markets. History shows that such actions usually fail. The current problems are much bigger than that. Do you really think that Buffett can bail out all the European banks, or European countries such as Greece, Portugal, Spain, Italy, etc?
If he likes the 6% yield on BAC, he can get 46% on Greek 2-year government bonds.
Buffett’s move once again signals that a serious crisis is approaching, similar to the signals his moves sent in 2008. Of course, that is opposite to the intent of the investment.
We have held the stock for years and doubled up when it hit the lows. This thing with Buffet really has me scratching my head. A fools notion which makes sense is that BOA is to big to fail, who would buy it and be able to swallow it up. As posted they had always reassured the powers that be that they had the cash to survive. I am not so sure now, but who could legitimately come to their rescue?
Did they bring Buffet in for legitamacy in case they need a goverment bailout?
We have held the stock for years and doubled up when it hit the lows. This thing with Buffet really has me scratching my head. A fools notion which makes sense is that BOA is to big to fail, who would buy it and be able to swallow it up. As posted they had always reassured the powers that be that they had the cash to survive. I am not so sure now, but who could legitimately come to their rescue?
Did they bring Buffet in for legitamacy in case they need a goverment bailout?
Maybe BofA figures on investing that money in equities and profiting.
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