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Buffett: I’d Buy US Bank Stocks Now

By    |   Thursday, 06 Oct 2011 07:11 AM

Now is a good time to buy U.S. bank stocks, says billionaire investor Warren Buffett.

"If I had a choice on buying or selling certain bank stocks in the United States right now, I'd be buying," Buffett, chairman and CEO of Berkshire Hathaway, told CNNMoney.

Banks stocks have been selling off steeply as investors growing more fearful that a European debt crisis caused by a default of Greek sovereign debt will send financial shock waves around the world and start a global recession.

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Warren Buffett
(Getty Images photo)
"It doesn't particularly make sense," Buffett said of the recent financial stock declines.

It's natural that fears concentrate on banks, he notes. Europe is a huge part of the market and banks remain interconnected, although probably less interconnected than a year ago.

But Buffett says he doesn't think that way. "I try to think five years ahead and when things get cheap enough, I like to buy."

If you owned a good farm or apartment building, he asks, would you sell it today because of problems in Washington or volatility in the stock markets?

"You wouldn't even think about it," he says. "People don't look at those businesses that way."

Instead of seeing how farms are quoted every five seconds, you would think how the farm will be doing five years from now. Owning a good business, he says, is like owning a good farm.

"Forget about the headlines, and forget about what the market's doing," Buffett says.

Stocks of major banks, such as Citigroup, Regions Financial, Bank of America and JPMorgan Chase, have seen large drops in recent weeks, but analysts believe the stocks might rebound strongly in the next 12 months, according an article on thestreet.com.

For instance, on average analysts expect Wells Fargo stock to gain 42 percent over the next 12 months, according to predictions gathered by Bloomberg.

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Now is a good time to buy U.S. bank stocks, says billionaire investor Warren Buffett. If I had a choice on buying or selling certain bank stocks in the United States right now, I'd be buying, Buffett, chairman and CEO of Berkshire Hathaway, told CNNMoney. Banks stocks...
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2011-11-06
Thursday, 06 Oct 2011 07:11 AM
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