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Warren Buffett at Berkshire Hathaway's shareholder meeting. When Warren Buffett advises investors to be "fearful when others are greedy and greedy when others are fearful," he means what he says. The multibillion dollar investment that Berkshire Hathaway NYSE: BRK-B made in Bank of America NYSE: BAC in serves as a case in point.

The terms of the deal were certainly advantageous to Berkshire. Given the current value of Bank of America's common stock, this means that Berkshire's investment in Bank of America has more than tripled in value.

The value of Berkshire's investment in Bank of America has been bolstered by a number of different factors. In the first case, the valuation of Bank of America's stock has risen considerably since Buffett's well-timed investment in August And it's not like Bank of America's tangible book value has stayed the same over the past five years.

Both trends have been fueled by a steadily improving outlook for the nation's second biggest bank by assets. Bank of America is now once again focused on growing its revenue , as opposed to trimming operating expenses and seeking to contain any residual damage from the crisis.

More recently, moreover, all bank stocks have gotten a potent shot in the arm thanks to the outcome of this year's presidential election. The incoming administration's promise to reduce taxes, increase infrastructure spending, and deregulate the banking industry has dramatically improved investor sentiment toward bank stocks.

And the Federal Reserve has played a part too, by raising interest rates this month for only the second time since the financial crisis. In short, while no one should be surprised anymore at Buffett's prescience, it's still incredible to see a deal like this work out so incredibly well for the year-old Oracle of Omaha. John Maxfield owns shares of Bank of America.

How to Invest Like Warren Buffett - 5 Key Principles

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Here's What Warren Buffett Just Said About Bank of America -- The Motley Fool

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