Banks Should Benefit From Buffett's and Soros' Buys This Week

Over the next few days, the Fed will release the minutes of the last monthly meeting presided over by Ben Bernanke. Bank of America will have its day in court again, Wells Fargo will worry about housing starts, and the market will digest buys of Citigroup, JPMorgan Chase, and Goldman Sachs by star investors Warren Buffett and George Soros.

Feb 18, 2014 at 8:30AM

This week will see the publication of the minutes of the Federal Reserve's last monthly meeting with Ben Bernanke as its chairman. Interested parties will be scanning between the lines to determine to what degree the Fed's tapering of its latest round quantitative easing will continue, among other indicators.

Tapering continues this month with a $10 billion slice; although many will hunt for clues as to the program's future, don't expect any smoking gun revelation given that Bernanke and his successor Janet Yellen have strongly hinted that it will continue.

Looking at the economy from the top down, the next few days will see a few key macro numbers released. These include the consumer price index, the Empire State (i.e., New York) manufacturing index, and critically for mortgage lenders, the Census Bureau's new residential construction figures released on Wednesday. The latter includes the January figures for housing starts, which, because of awful weather will almost certainly be down from those of December.

This is of particular concern to the nation's top mortgage lenders, especially big daddy Wells Fargo (NYSE:WFC) and No. 2 JPMorgan Chase (NYSE:JPM). Both could use encouraging news in the construction sphere, but Wells is probably hungrier for something that'll juice the segment -- apparently the bank's resorted to lowering its threshold for the creditworthiness of its potential mortgage borrowers.

Morgan, meanwhile, has a famous financier bullish about its prospects. George Soros' eponymous fund management behemoth has disclosed its latest portfolio, revealing that in Q4 of last year, the ever-sharp investor grabbed a stake of over 2.8 million shares of the bank. Soros is also a believer in the future of Citigroup (NYSE:C), buying almost 2.3 million shares during the quarter. That should add to the growing positive sentiment about the big lender in some circles.

Warren Buffett's Berkshire Hathaway (NYSE: BRK-B), famously a massive shareholder in Wells Fargo, also added to its financial holdings during the quarter. Buffett's pick was investment banking stalwart Goldman Sachs, with Berkshire exercising warrants to build a stake of 12.6 million shares. As with Soros and Citi/Morgan, we shouldn't be surprised to see a resultant lift in bullish outlook for Goldman over the next few days.

This week, as with any week dating back to about 2009, one of the nation's banking incumbents will be the subject of a legal proceeding. On Wednesday, the New York State Supreme Court will hear arguments from several parties wanting to delay Bank of America's (NYSE:BAC) proposed $8.5 billion settlement with investors aggrieved about their soured crisis-era purchases of securities backed by mortgages from Countrywide Financial (purchased by Bank of America in 2008).

Those investors, including insurance giant American International Group, want the final judgement delayed, claiming further litigation is warranted in order to fix the details of the settlement.

Well, at least there aren't any more lawsuits coming down the pike over the next few days... not yet, at any rate. That's good, because there are Fed minutes to pore over, macro numbers to ponder, and big portfolios to follow. There will be enough to for the nation's financials to deal with this week.

The Oracle speaks!
One of the world's best bank investors -- heck, one of the top investors, period -- Warren Buffett has made billions through his stock picking and he wants you to be able to invest like him. Through the years, he has offered up investing tips to shareholders of Berkshire Hathaway. Now you can tap into the best of Warren Buffett's wisdom in a new special report from The Motley Fool. Click here now for a free copy of this invaluable report.

Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends American International Group, Bank of America, Berkshire Hathaway, Goldman Sachs, and Wells Fargo. It owns shares of American International Group, Bank of America, Berkshire Hathaway, Citigroup, JPMorgan Chase, and Wells Fargo and has the following options: long January 2016 $30 calls on American International Group.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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