Warren Buffet Is Betting Big On This Stock Now

Warren Buffet is the most famous investor in the world. At one time, he was the richest man in the world. His net worth is still in the top 5 investors in the world. When he buys a stock, everyone starts buying that stock and the price of that stock jumps in the market. Warren Buffet is a very patient and careful investor who believes in value investing. He buys a stock after long and careful study at the most opportune time according to time and he has a long term investing horizon.

He has invested big on Coke and IBM. In the beginning of this year, he lost $2 billion in just a few days when the stocks of Coke and IBM plummeted on bad earnings report. This time, he is betting big on this banking stock. He has already invested $400 million in this banking stock.

Warren Buffett must feel that way about megabank Wells Fargo WFC -0.44% . At the end of 2014, Berkshire Hathaway held more than 463 million shares of the company, worth $25.4 billion. Berkshire’s stake in Wells Fargo was the largest holding in its portfolio by a country mile: It constituted about 24% of Berkshire’s portfolio and was worth $8.5 billion more than the second-largest holding, Coca-Cola.

Warren Buffet is not new to the insurance and the banking sector. Success of Berkshire Hathaway, his holding company has been due to heavy investments in the banking and the insurance sector. Warren Buffet is a disciple of Benjamin Graham who believes in buying when the market value of the stock is below the intrinsic value of that stock. The logic being that in the long run the market value will try to reach the intrinsic value of that stock. Warren Buffet has a secret formula that he uses to calculate the intrinsic value of the stock that he wants to invest in.