Page 154 - Flip Banks TG

At the time of Buffett’s $5 billion investment there were two

ways of looking at it. The first was that it was not an
investment but rather a loan where Buffett was bailing out

Moynihan and BofA. This caused some investors to question

Moynihan’s credibility as an effective CEO.

On the other hand, the second way of looking at it was by

looking at Buffett and his modus operandi. The prism

Buffett applies often allows him to form his investment
decisions based on what he perceives happening long term.

Looking at diagrams 1 and 2 there is an emerging, positive,

long-term balance between BofA’s expenditures and
resources with the final year showing an increase of almost

$4 billion in its revenue.

Moynihan has achieved this revenue and income growth by
focusing on the customer whilst cutting expenditures

especially those devoted to selling. Moynihan has thus

achieved a good fit between strategic health and financial

health.