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Hatch Weekly: ABCDEFG, this is what profit means to me

Buffett banking on Bank of America

According to a recent SEC filing, Berkshire Hathaway (BRK) has doubled down on its largest bank investment and now owns 950 million shares of Bank of America (BAC). While Berkshire's Bank of America stake is worth around $29 billion, it lags behind their investment in Apple (APPL) valued close to $52 billion. Buffet drinks five cans of Coca-Cola a day, so obviously, Berkshire’s stake in Coca-Cola (COKE) takes 3rd place valued at around $21 billion.

Big banks? Big deal.

Berkshire Hathaway now owns 10.4% of Bank of America’s shares, which is a big deal when it comes to banks. The Oracle of Omaha said he likes to keep many of his firm's equity stakes under a 10% threshold, as going above this can lead to increased regulatory oversight. By owning more than 10% Bank of America, Buffett is showing that he’s willing to put up with the regulatory headaches to own a bigger piece of this American pie and that he genuinely believes in the company.

That bank, she’s a beaut!

Buffett might be especially eager to invest because Bank of America is doing a great job of growing. To date, growth in its retail lending operations, followed by its wealth management division has fueled profits. Bank of America’s Q2 results made it the 18th straight quarter the company has managed to grow revenue while cutting or maintaining costs, so it’s no surprise that retail investors also have a love affair with BofA stock.

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Not #fakenews: the world is on fire

Is the climate change debate hot enough for ya? A heatwave has baked Western Europe for most of the week, from France to the Netherlands. Climate change nay-sayers: your goose is cooked. Climate scientists say if we don’t do something about it, heatwaves could become standard in two decades. Lucky for you there’s an ETF for that! Several ETFs for that, actually.

Yes, you should care

For investors, the risks of climate change are already aflame thanks to intense storms and wildfires, leading to property damage and business disruption. Take Cali’s deadly fires last year that resulted in not only the loss of life but also tens of billions of dollars in damage- and may have contributed directly to the January bankruptcy of Pacific Gas and Electric. While some investment strategists think climate change will offer opportunities, others warn of physical and social damage negatively impacting the economy, which in turn, may affect our portfolios.

That’s so hot: investing in the future of the World

Looking to put a little bit of green in your portfolio? For some investors, they recognise the opportunities in a greener economy. Naturally, fund managers are aware of this and are increasingly offer funds and ETFs that let everyday investors align their values with their investments. Keen to get started? As usual, you’ve got to do the research and understand investment risks. There’s a lot to learn, but investing in a sustainable future is hot with no signs of cooling off.

Do you know your ABCs of profit? Google does.

The FANGS continue to be kings of the share markets. Last Thursday, Google (GOOG) reported that their profits in the recent quarter have tripled from last year, easing investors’ fears about their parent company Alphabet’s disappointing first quarter. And then guess what happened? Alphabet’s stock price surged 8%. Boom!

Head in the clouds

Alphabet has always been able to rely on its advertising machine, which generates about 85% of its revenue, but they are no one-trick pony. In their Q2 earnings report, Alphabet disclosed that Google Cloud is generating $8 billion a year and that it boosted Alphabet’s overall second-quarter profits. Chasing after competitors Amazon and Microsoft, Google plans to triple the size of its Cloud sales team over the next few years.

Mad for ads

Analysts see Google’s investment in their cloud business as a wise move given regulations are a-comin’ that will impact their ad businesses (diversification people!). The Silicon Valley behemoth could face years of challenges from the EU, which could hinder its ambitions to expand beyond search results. Shots were fired earlier this year when they were hit with their third EU antitrust fine totalling close to $9 billion. And scrutiny is intensifying. Last Wednesday, the US justice department announced it would kick off an antitrust review into major technology firms in response to growing concerns that tech behemoths are stifling competition. Fair enough, do we want a world dominated by a few giants?

Other interesting stuff

Was the Automotive Era a Terrible Mistake?
Alphabet: Google parent's profits hit $9bn amid increased scrutiny
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Investors Are Usually Wrong. I’m One of Them.
I took $50 and invested it: Here's what I learnt


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