Warren Buffett’s $800 Million Bet On BAC

Warren Buffett’s $800 Million Bet On BAC

During their recent episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discussed Warren Buffett‘s $800 Million Bet On Bank of America Corp (NYSE:BAC). Here’s an excerpt from the episode:

Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Warren Buffett's $800 Million Bet On BAC

Q2 2020 hedge fund letters, conferences and more

Tobias: This is slightly off-topic, but every time I say that, Buffett’s got– Bill’s article came out with Buffett’s got the best–

Exclusive: Lee Ainslie Struggled During The Third Quarter As Tech Holdings Fell

activist short selling Investing investLee Ainslie's Maverick Capital had a difficult third quarter, although many hedge funds did. The quarter ended with the S&P 500's worst month since the beginning of the COVID pandemic. Q3 2021 hedge fund letters, conferences and more Maverick fund returns Maverick USA was down 11.6% for the third quarter, bringing its year-to-date return to Read More

Bill: That’s not mine.

Tobias: The Business Insider article, I’m not– this is not–

Bill: They just asked me some quotes, and I just parroted something you had said.

Tobias: I’m not criticizing at all. This is the only point that I make–

Bill: I [crosstalk] I stole it from you but it’s not.

Tobias: I don’t at all. Every time I say that someone comes and says Naspers with Tencent, that’s the best trade ever, just sit back and think about this for a moment. In the world, there are a dozen of these Chinese companies that have gone up some stupendous amount over a period of time and there is somebody out there who got into them 20 years ago. So, if you work it backwards, you’ve had to go look at every company in the world– so they found some South African company that’s got a little position in some Chinese company and that’s the best investment ever. The reason that’s not the best investment ever and the reason Buffett is the best investment ever–

Bill: What happened?

Tobias: That’s a bit wacky.

Bill: We flipped.

Tobias: The reason that Buffett is the best investment ever is that Buffett was a totally known quantity and had to put a huge amount of money into it and now it’s gone up three times in a very short period of time. Tencent doesn’t–

Bill: And it was something everyone could have seen. That was in front of the world.

Tobias: That’s it.

Bill: Everybody else was too scared and he had massive balls.

Jake: Fair. Questions?

Bill: There’s some Intel questions on there. I don’t really know about Intel versus AMD. I’ll tell you what pisses me off is that I miss Taiwan Semi because that I sort of understood and that from my understanding is a scale game and I look for scale games and I fuckin’ miss that and I’m disappointed in myself.

Perth Tolle - Investing in Freedom

Tobias: You know who’s got a big chunk of that? Perth Tolle and Freedom. Shoutout to Perth. That’s her biggest holding, I think, so good for her.

Jake: That’s a big win. Freedom.

Tobias: A SPAC is cheaper than an IPO. Yeah, because you’re just raising cash, so there’s nothing to disclose. There’s no DD, then you’re backing these guys to go and do the DD. It’s cheaper for the person listing the SPAC. It’s not cheaper for the investor.

Bill: Yeah. It’s just [crosstalk]

Jake: Eventually, it won’t be.

Tobias: I don’t care what it cost those dudes.

Bill: [crosstalk] –cheaper than assets.

Tobias: I don’t care what it costs the VCs to get something out the door. I don’t care what it costs the manager or the promoter to get it out the door. I care about what I pay.

Jake: That’s as good as money, sir.

Bill: It’s so hard for me to read the economics on SPACs and get amped up about funding them.

You can find out more about the VALUE: After Hours Podcast here – VALUE: After Hours Podcast. You can also listen to the podcast on your favorite podcast platforms here:

For more articles like this, check out our recent articles here.

Updated on

The Acquirer’s Multiple® is the valuation ratio used to find attractive takeover candidates. It examines several financial statement items that other multiples like the price-to-earnings ratio do not, including debt, preferred stock, and minority interests; and interest, tax, depreciation, amortization. The Acquirer’s Multiple® is calculated as follows: Enterprise Value / Operating Earnings* It is based on the investment strategy described in the book Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations, written by Tobias Carlisle, founder of acquirersmultiple.com. The Acquirer’s Multiple® differs from The Magic Formula® Earnings Yield because The Acquirer’s Multiple® uses operating earnings in place of EBIT. Operating earnings is constructed from the top of the income statement down, where EBIT is constructed from the bottom up. Calculating operating earnings from the top down standardizes the metric, making a comparison across companies, industries and sectors possible, and, by excluding special items–earnings that a company does not expect to recur in future years–ensures that these earnings are related only to operations. Similarly, The Acquirer’s Multiple® differs from the ordinary enterprise multiple because it uses operating earnings in place of EBITDA, which is also constructed from the bottom up. Tobias Carlisle is also the Chief Investment Officer of Carbon Beach Asset Management LLC. He's best known as the author of the well regarded Deep Value website Greenbackd, the book Deep Value: Why Activists Investors and Other Contrarians Battle for Control of Losing Corporations (2014, Wiley Finance), and Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors (2012, Wiley Finance). He has extensive experience in investment management, business valuation, public company corporate governance, and corporate law. Articles written for Seeking Alpha are provided by the team of analysts at acquirersmultiple.com, home of The Acquirer's Multiple Deep Value Stock Screener. All metrics use trailing twelve month or most recent quarter data. * The screener uses the CRSP/Compustat merged database “OIADP” line item defined as “Operating Income After Depreciation.”
Previous article No coronavirus relief package by Friday may mean no checks this month
Next article Trump’s Allies Hold Hostage Extra Federal Unemployment Benefits?

No posts to display