Berkshire Hathaway also owns shares of JPMorgan and Wells Fargo banks. Bank stocks have underperformed the larger market recently as interest rates have fallen and are expected to remain low for some time.
Buffett champions value investing, so it is notable that they are buying shares of Bank of America when the broader market sees them as less favorable. The investor has made a fortune buying undervalued companies.
This year the Berkshire Hathaway shareholders conference was held virtually due to Covid 19. In the meeting Buffett gave several examples of how the United States economy had overcome adversity and devoted one of the slides of his presentation to the simple statement, "Never bet against America."
Buffett went on to say, “You can bet on America, but you have to be careful about how you bet, markets can do anything.”
He also gave this advice to investors, “In my view, for most people, the best thing to do is owning the S&P 500 index fund. There are huge amounts of money people pay for advice they really don’t need. If you bet on America and sustain that position for decades, you’d do far better than buying treasury securities.”
Buffett, in the past has advised investors to simply buy a low cost S&P 500 index fund, explaining that this would beat most managed investment funds with higher fees. He even challenged fund managers to a one million dollar bet for charity if they could outperform the S&P 500 over a ten year period. Only one manager took the bet.
Buffett bet hedge fund manager Ted Seides in 2008 that a simple S&P 500 index fund would outperform a basket of at least five hedge funds of his choosing over the course of a decade. Seides conceded that he had lost the bet in 2017, "Buffett has won the bet, and by a large margin" he stated.