Warren Buffett in recent months caused fellow investors to raise their eyebrows as he seemed unsure how to place his assets in the ongoing crisis. Now he has placed a major bet and invested in a bank, which again raises some questions.

The star among U.S. investors, Warren Buffett, may not have had the best of times recently. Instead of buying big in the days of the corona-induced crash, he was stuck at the sidelines. Observers wondered whether he had lost his appetite due to the disastrous development of airline stocks.

When he held his first-ever online annual general meeting, he wasn’t particularly inspired either. But now, many would claim finally, he has placed a bet again, according to information provided by U.S. stock market supervisor SEC.

A Good Question

The investment isn’t an entirely new idea of his, but still: the Sage of Omaha has bought $800 million worth of stock in Bank of America, raising his stake in the firm to 11.3 percent. It is the second-largest investment of his Berkshire Hathaway empire following the Apple stake.

So why did Buffett buy shares in a bank? After all, he sold a significant position in Goldman Sachs earlier this year. With low or negative interest rates in major economies, financials aren’t the pick of the day, as Thorsten Hens, a university professor in Zurich, noted in an article posted by «Finanz und Wirtschaft» (behind paywall, only in German) on Monday.

Following His Instinct

But Buffett has always had a penchant for strong and powerful brands, said Hens. He may have been a winning formula, but the current climate that favors tech stocks he may have to reconsider.

A good example of the changes in the markets is Kraft Heinz, the U.S. food maker, which is struggling to overcome stagnant sales. Buffett has held an important stake in the company for years.

Back at What He Does Best?

Maybe his bet on Bank of America will turn out all successful. The bank has lost about a quarter of its value since the crisis began, which is substantially more than Goldman Sachs (minus 15 percent) and Morgan Stanley (minus 5 percent).

Maybe the stock of Bank of America has more potential to rise. And Buffett has a deserved reputation as a picker of undervalued stocks.