Warren Buffett and Berkshire Hathaway significantly reduced their position by selling 100 million shares at Wells Fargo. The bank continues to curb their position in stocks, backing the bull case for Omaha’s rac recall, gold and bitcoin (BTC).
At one point in the Fox business, Berkshire reported વે 32 billion in equity at Wells Fargo.
Why did Buffett cut Wells Fargo and how could he benefit Bitcoin?
Buffett emphasized the importance of value investments and cash flow throughout his career. Investors generally prefer businesses with predictable and stable performance that result in consistent profitability.
In July, Wells Fargo reported a loss of 2.3 billion, its first since the 2008 housing crisis. After a disappointing quarterly report, the company said it would pay a dividend of 10 cents per share.
This month, Moody’s downgraded the rating from stable to negative, citing the slow process of revoking its rule. Capital analyst Alan Tishchel said:
“The change in outlook reflects the slow-expected pace at which Wells Fargo’s legacy of governance, oversight, compliance and operational risk management overcomes its shortcomings. . “
Confluence of quarterly losses, dividend cuts and downgraded outlook Buffett could streamline its position.
But the constant theme in the change in Berkshire’s portfolio in recent months is its investment in Barrick Gold. U.S. While reducing his exposure to the banking sector, Buffett invested in gold and Japanese trading companies.
The decision shows that Buffett is seeking protection in terms of hedge against cash flows and inflation. Barrick Gold Investments fuels Bitcoin’s bullish case as BTC’s perception of price as a store is improving, especially since the March 2020 crash.
Bitcoin vs. Gold Prices. Source: Scave
BTC will “cannibalize” gold in the future, says Winklevos
Other notable investors, including the Winklevos twins, believe that Bitcoin will be competing against gold in the long run as “digital gold”. In particular, its immense potential makes it an attractive investment as BTC market capitalization is still only about 1.5% gold.
Gemini co-founder Cameron Winklevos said Bitcoin has already created an important sector with gold in mind. He Said:
“Bitcoin has made a significant place on gold – with over 200 200 billion in market capitalization from the White Paper in a decade. It will continue to sail gold dramatically over the next decade. “
Max Keyser, the Wall Street giant and host of the Keyser report, believes the exit from the Buffett Dollar is a bullish signal for the price of gold and bitcoin, as Syntelgraph Markets reported last Monday.
“Buffett’s move to Japan, along with his gold investment, confirms that he is running out of large amounts of dollars.” “Bitcoin – Gold – Silver will build all new ATHs in the near future.”
