gparmar16

The Danger in Financial Stocks in 2009

It's true Buffett owns WFC & BBT, even though he hates financial derivatives. But on other accounts he has claimed that banking is a cash cow and it would be worth understanding the industry. He is also in the Insurance business which i believe WFC & BBT do offer, so some of the operations are within his circle of confidence. It is true he hates the new complex derivatives probably due to not understanding them and also due to their possiblity of destruction ("Financial-WMD"). But I would bet that he has some if not quite a bit of control over WFC & BBT and how they operate as a business (probably including the quality/quantity of financial dervivatives they take on), hence his investments in those firms. If I'm not mistaken though Buffett safely reduced his shares in those firms Q3 or Q4 of 2007, including shares in housing stocks and his car dealership.