owns

Warren Buffett’s incredible track record makes him one of the best investors ever. There’s no denying that. His successful ability at allocating capital has made Berkshire Hathaway a trillion-dollar business. It makes sense that the average investor might keep a close eye on what’s in its portfolio in order to find potential ideas.

As of Aug. 21, the conglomerate owned more than 605 million shares in a leading bank, a holding valued at $29 billion, making it Berkshire’s third largest position. While this financial stock has produced a total return of more than 118% in the past five years, Berkshire has been a notable seller in the past year or so.

So should you still buy shares right now?

Image source: Getty Images.

Operating from a position of strength

The business in Berkshire’s portfolio that investors might consider is Bank of America (BAC -0.10%). With $3.4 trillion in total assets, it’s the second-biggest bank in the U.S. based on this metric. Based on the company’s second-quarter financial performance, investors have reasons to be confident.

During the quarter, net revenue increased by 4% year over year. There was 7% loan growth. Net interest income was up for the fourth straight quarter. In a sign of credit quality, the net charge-off rate improved compared to Q2 2024. And the bank remains a leader in deposit gathering, with top retail market share.

Bank of America is a dominant financial services entity. Besides the factors already mentioned, one obvious reason why is because of how diversified its operations are. It has its hands in consumer and small business banking, corporate and investment banking, capital markets, and wealth management. If any segment comes under weakness, it can be offset by better results elsewhere.

Investors should follow in Buffett’s footsteps in the sense that they should try and identify businesses that have an economic moat, or durable competitive advantages that help them outperform rivals and new entrants. Bank of America fits the bill. Its massive scale gives it a cost advantage. And as is the case with banks, there are switching costs for customers.

Tremendous capital returns

During the second quarter, Bank of America generated $7.1 billion in net income. The business is consistently profitable. This setup allows management to return lots of capital to shareholders.

Bank of America bought back $5.3 billion worth of its own stock in Q2. And it paid out $2 billion in dividends. The current dividend yield of 2.29%, which is significantly higher than the S&P 500‘s 1.25%, provides a nice income stream.

Investors can expect the capital returns to continue. Bank of America just approved authorization for $40 billion in share repurchases. And in the past decade, the dividend has climbed 460%.

Taking a cautionary view

Valuation can have a notable impact on the returns investors achieve. Bank of America shares trade at a price-to-book (P/B) ratio of 1.3 today. This is higher than the trailing five- and 10-year average.

Additionally, investors have to think about the broader economy. For what it’s worth, there’s always a certain level of uncertainty. And no one has any clue what interest rates are going to do, although there is a view that they will come down. Regardless, there’s always the threat of a looming recession, which would negatively impact Bank of America and the industry at large. This is something bank investors can’t ignore.

The fact that Buffett and Berkshire have been selling could be an ominous signal. And maybe it’s best if investors avoid Bank of America right now. That perspective could change if the valuation was much more compelling, like at a P/B multiple below one.

The Villa Vie Odyssey will spend that time going round and round the world, stopping off at glamorous ports across the globe. Among those onboard in Californian resident Sharon Lane

A woman plans to spend the rest of her life on a cruise ship.

The moment that Sharon Lane stepped onto the Villa Vie Odyssey cruise ship in mid-June, she felt full of joy and relieved. The 77-year-old had been plotting to exchange her life on land for life at sea for a long time, and has now signed up to spend at least the next 15 years on the ship.

The Villa Vie Odyssey will spend that time going round and round the world, stopping off at glamorous ports across the globe. The ship is not like a typical cruise liner in that most passengers are long-term residents. Very few hop on for a quick jaunt around the Mediterranean, instead signing up for good, or at least the estimated 15-year lifetime of the vessel.

“I buy the cabin, I live in the cabin, and that’s it. And then there’s no end,” Sharon told CNN. She used her life savings to buy the cabin last year and, after a delay of several months, set sail on her new life at the end of September 2024 when the Odyssey cruised through her hometown of San Diego.

Do you have a cruise story to share? Email [email protected]

READ MORE: Terrifying Turkey wildfires rage through holiday district as 50,000 evacuated

For Sharon, she was tempted by the chance to see the world, but also to meet intriguing people. Villa Vie Residences’ CEO Mikael Petterson explained: “We have a very diverse community including a Nobel Peace Prize winner, a White House chief of staff, an astronaut, and many scientists and doctors onboard who share their knowledge and experiences.”

If you’re interested in joining them, then the good news is that there are still cabins available. The bad news is that they don’t come cheap.

The lowest cost accommodation is an ‘inside’ cabin that is going for $129,000 (£93,000) for 15 years, with an extra $2,000 (£1,495) per person monthly fee for double occupancy, and $3,000 (£2,180) for single occupancy. If those prices stay the same, a single occupancy cruiser would fork out £392,400 in cabin fees alone across 15 years.

The figure is low in comparison to the World, however, which is the only other cruise ship currently at sea. Prices for that begin at $2.5 million.

Included in the deal are food and soft drinks, alcohol at dinner, Wi-Fi, medical visits, 24/7 room service, weekly housekeeping, and bi-weekly laundry service.

“I don’t have to do my laundry anymore. I don’t have to do grocery shopping. Living on the ship is much less expensive than living in Southern California,” Sharon said.

Villa Vie owners can rent their cabin out to others, which means short-term passengers can still come and go from the Odyssey.

The Odyssey usually stops in each port for a couple of days, where optional shore excursions are organized for an additional fee. The eight-deck Odyssey can accommodate 924 people, but it has been reconfigured and streamlined to a roomier 450.

The voyage did not get off to a smooth start, as the ship became stranded in Belfast for four and a half months last year. The Odyssey arrived in the Northern Ireland capital back in May 2024 to be outfitted before it was scheduled to sail off on the 30th of that month.

READ MORE: Mum fighting for life on holiday from hell after mosquito attack and tragic accidentREAD MORE: European heatwave leaves one dead as British holidaymakers warned to ‘stay inside’

Unfortunately, due to issues with the rudders and gearbox, the vessel ended up staying put for four and a half long months. On September 30, by which point spring and summer had given way to early autumn, the Odyssey and its 125 passengers set sail. However, it didn’t get very far, docking just a few miles outside of Belfast while a few final pieces of paperwork were completed.

Finally, on October 3, the ship set sail, to the great relief and joy of passengers who will likely never forget the bumpy beginning of their once-in-a-lifetime adventure. Unfortunately, this was far from the end of their troubles…