Personally i don't like investing in a bank as the success of that investment depends on the success of the investments investments. This to me seems like doubling the risk behind a investment as what would happen if your invested bank all of a sudden made a wrong investment that had catastrophic misshapenings on the banks profits? All of a sudden you're investment would be paying for another persons bad investment. I know that this is normally not the case and generally the people working at a bank know what they're doing but if we take the case kweku Adoboli who lost UBS £1.4 billion and resulted in a £29.7 million fine to the bank. Many people were reporting around this time that this case and this one person nearly brough UBS to its knees, i can not comment if this is true or not as i did not look to much into it but if somebody remembers then feel free to add it to the comments.
My point is this, if you had an investment in a bank and that bank made a bad move and lost alot of money, maybe even more then UBS you are suddenly stuck with a stock that will rapidly decline in price and why? Because of somebody elses mistake.
I recently bought shares in Berkshire Hathaway and readers will now be thinking that i'm very hypocritical but i truely only bought them because of Warren Buffet, for 50 years he has lead Berkshire Hathaway to an average growth of 13.5% growth in stock value. Warren Buffet is my idol a man who i believe everyone should look up to and i know deep down one of the reasons i bought this stock was because of him and i also appreciate that i stand a high chance of getting burnt over this.
The world of banking is a funny industry as i found out when i went on work experience maybe i'll write a blog about it some time.
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