When Warren Buffett makes new stock purchases it typically catches the attention of investors. In this video clip from "The Future of Fintech" on Motley Fool Live, recorded on May 19, Fool.com contributors Matt Frankel, Bram Berkowitz, Danny Vena, and Jason Hall discuss Buffett's recent foray into fintech with a stake in Ally Financial (ALLY 5.61%)
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Matt Frankel: Warren Buffett bought about eight new stock positions in the first quarter of 2022. We recently found out. Some we knew about. We already knew he bought Occidental Petroleum (OXY -0.54%). He brought about a lot of Chevron (CVX 0.84%). We already knew about those. He bought some in the financial sector, some financial adjacent companies, but one pure fintech play, which is Ally Financial, which I feel like a lot of people aren't very familiar with. Are any of you Ally shareholders by any chance?
Bram Berkowitz: No.
Frankel: Anyone know what company it was spun out of?
Danny Vena: Well, didn't that originally come from GMAC Finance?
Frankel: Very good. Ally was born in the wake of the financial crisis. It was General Motors' financial division, GMAC Finance, which as you might expect from where it came from, it is primarily an auto lender. Ally Financial, it started out as just a pure auto lender. Let me share my screen real quick before Jason pulls the presentation that I was about to show he has a knack for doing that. [laughs]
Jason Hall: I'm not going to do that to you in this show, I promise. [laughs]
Frankel: Here's what Ally does. They are becoming an all-in-one digital banking platform similar to a few of the other fintechs we follow. If you look at just this mix of business, you might think I'm talking about SoFi (SOFI 7.41%), but I'm not. The key differentiator is the auto lending focus. I'd actually go so far as to say Ally is to auto-lending, what SoFi has been to private student lending to a degree, but even more so because of their GM roots, they're a very big operation.
Berkshire (BRK.A -0.64%) (BRK.B -0.81%), we recently learned bought a little over 1% of the company, the stake's valued at about $350 million today. Not a giant investment by Berkshire standards, but maybe Buffett's tiptoeing into the position. The first quarter Berkshire bought Apple (AAPL 0.68%), for example, he bought a billion dollars worth. Now it's many times that amount because it turns out they were just tiptoeing into a position.