If You’d Invested in Bank of America Like Warren Buffett, Here’s How Much Richer You’d Be
Written by
Dawn Allcot
Edited by
Nicholas Morine
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Warren Buffett believes in holding stocks for the long term. His investment firm, Berkshire Hathaway, bought into Bank of America in 2007, according to StockCircle.com. Since then, the company purchased shares on 12 more occasions and sold holdings five times.
Today, Buffett owns 12.81% of the bank’s outstanding shares. BofA makes up 9.03% of Berkshire Hathaway’s portfolio, the firm’s second largest investment, according to Benzinga.com. As of Q1 2023, Buffett’s BofA holdings were worth $35.5 billion, StockCircle.com reported.
However, had Buffett simply held his initial investment in 2007, when shares cost an average closing price of $50.61 per share, he’d have lost a substantial part of his investment. Bank of America stock today is selling for $35.04, a 30% drop, inflation notwithstanding.
But Buffett’s largest purchase, 679 million shares, took place when the stock was just at $24.27, just prior to the Great Recession. He continued buying through when the stock was hovering around $25 per share.
You May Have Tripled Your Money If You Did Better Than Buffett (and Bought in 2010)
Let’s consider if you had waited to buy Bank of America stock until 2010, when shares were down to an average closing price of $12.24. Your $10,000 investment of roughly 816 shares would be worth $28,593, nearly triple your investment.
The stock has a one-year price target of $40.48, according to Moody’s. That means if you had purchased in 2010 and continue holding, you’ll have more than $33,000 by the end of the year in your initial 816 shares.
In addition to BofA seeming to be a favorite stock of Buffett’s, six analysts also rate it a “buy,” while no investors are bearish, according to Benzinga.com.
Berkshire Hathaway also has exposure to American Express and Moody’s, with financial stocks making up more than 24% of its portfolio.
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