Why Would Warren Buffet Sell Bank Stocks?

written by

Warren Buffett

Support free journalists: > send a tip

This article was originally published by Austin Litman on Proofofwork.ca

Warren Buffet has been dumping his bank positions because banks go bankrupt. One example other than the famous one in 2008 is the “Savings and Loan Crisis” that took place mid-80s to the 90s. It’s when over 30% of all Saving and Loan Associations in America failed, and it ended up costing taxpayers over 100 billion dollars while bankers got bailed out (as is tradition.)

These associations take your money and put it into the market to try and make more. When they make the wrong choice, the money is gone. When too many customers ask for their money back at once, the companies shut down. During a recession, mostly everyone wants their money back since they need to pay for rising prices. 

Buffet knows this, so he quietly shed over half all his exposure to banks (which mostly own the associations) to mitigate risk in his portfolio because we’re in a financial crisis. He’s expecting some banks to fail.

Every year since 2008, US banks have failed. But 0 in 2021 and 0 so far in 2022? 🤔

The banks we use today are the ones that acquired the failed ones.

List of US bank failures since 2008

Enjoyed the article?

100% of your tips go directly to [email protected]
Need a wallet? Get it here

⚡️ Tip The Author

Help spread this article :)

BitcoinNews.com is NOT INVESTMENT ADVICE

Opinions expressed are entirely their own and do not necessarily reflect those of BitcoinNews.com

For informational purposes only. Individuals and entities should not construe any information on this site as investment, financial, legal, tax, accounting or other advice. Information provided does not constitute a recommendation or endorsement by BitcoinNews.com to buy or sell bitcoin, cryptocurrencies or other financial instruments. Forecasts are inherently limited and cannot be relied upon. Do your own research and consult a professional advisor. The opinion of authors do not reflect those of BitcoinNews.com 

   Advertisement

Read More Bitcoin News

   Advertisement

Join our Newsletter

   Advertisement

Latest on Bitcoin News

Video of the Week

Join our Newsletter

   Advertisement