Investing as the Oracle of Omaha

Investing as the “Oracle of Omaha”
September 30, 2011

Investing as the “Oracle of Omaha
Despite a weak economic climate, and the unreliable assets held by banking institutions, Bank of America maintains its position as the largest banking institution making notable business decisions that has positioned them as an attractive investment opportunity.   “Financial managers examine financial data and recommend strategies for improving financial performance” (Nickels, McHugh, & McHugh, 2010, p. X).   In deciding on whether to invest in Bank of America, a competent mutual fund manager would conduct a Strengths, Weaknesses, Opportunities, and Threats Analysis (SWOT).   The SWOT analysis will focus on key factors to consider before investing in Bank of America.
Figure 1.1
SWOT Analysis for Bank of America
According to the SWOT analysis for Bank of America (Figure 1.1), has experienced a loss in their stock prices, but the company has also seen “shares are up about 12 percent” (Renee, 2011, p. X).   An investor must “study the stock market, annual reports, recent investments, and future potential earnings” (Noel, 2011, p. 10) of any given company positioned as a recommended investment opportunity.   The annual report can reveal details about the company that will ultimately determine if the company is a sound investment.   However, annual reports are often written to enhance the image of a company and applying necessary precautions or simply using common sense to separate embellishments from facts.  
Strengths for Bank of America
Bank of America has strengths closely scrutinized by investors, while the weaknesses must be explored closely to ensure these do not have the possibility of affecting corporate assets and further jeopardizing investing opportunities.   “Like most banks, Bank of America saw bad loans increase during the fourth quarter.   Charge-offs rose 39%, to about $1.1 billion, including a $210 million charge to write down secured and unsecured...