Dow Jones soars over 11% in best day since 193362 stocks in the...

Dow Jones soars over 11% in best day since 1933
62 stocks in the S&P 500 soar at least 20%

Banks and financial services stocks rallied. AXP +22%, V +14%, GS +14%, JPM +12%, BAC +16%, WFC +15%, C +15%

Sometimes the situation is not as bad as most of the investors think it is. Most of the investors overreact and panic while a few stay calm during a crash. It comes down to your investment psychology. Warren Buffett stays calm during times likes these. He actually puts his money to work for the long term during market crashes. He did it during the 1987 crash, 1997 Asian Financial Crisis, 2000-01 Dotcom crash, 2008-09 GFC and he will probably do it once again. He stated in one of his interview that he is already 89 years old and he will probably get one last opportunity to invest the US$128 billion cash he has accumulated in Berkshire.

Berkshire equity portfolio is down by about $50 billion since year-end 2019, led by its big holdings in financial companies such as Bank of America (BAC), Wells Fargo (WFC), American Express (AXP), and JPMorgan Chase (JPM). Apple is the largest holding, accounting for about 30% of its portfolio. It is down about 13% this year, against a decline of around 23% for the S&P 500 index. Buffett has already started buying shares recently and bought some Delta Air Line shares and had to report it to the market because his ownership exceeded the 10% limit. We will find out later in April or early May what else Buffett has been buying during the past month only after 13F has been filed. If we cannot learn from the most successful investor in the world and follow him when he invests during the market crashes then we have a slim chance of long term investment success.

It appears to me that our Banks have been oversold and they will be on the path to slow and steady recovery over the next 18 months as market will re-rate the banking sector. ANZ dividends are not fully franked and CBA is trading at a higher P/E. NAB has higher commerical and business loans in their portfolio. Westpac share price has started trading higher than NAB share price recently.

Long term investment in Westpac is one of the best contrarian investment at the moment in the Australian Banking sector. Westpac is trading around $15.66 on NZX at the moment. Those who have been sitting on sidelines and watching over the past few days and waiting and hoping that Westpac share price will drop to even more ridiculous levels can sit and watch today's price action.