Editing 1course Stock Market (section)

== Case Study 2: American Express (AXP) ==

=== The Investment ===
In the 1960s, American Express faced a crisis when its subsidiary, Allied Crude Vegetable Oil, was involved in a major fraud. The stock price plummeted, but Buffett saw an opportunity and invested heavily.

=== The Rationale ===

# '''Brand Loyalty:''' Despite the scandal, American Express had a loyal customer base and strong brand recognition.
# '''Financial Resilience:''' Buffett believed the company could recover and continue its growth trajectory.
# '''Market Position:''' American Express was a leader in the financial services industry, with significant market share.

=== The Outcome ===
Buffett’s faith in American Express paid off handsomely. The company recovered, and Berkshire Hathaway’s investment has grown into billions of dollars, demonstrating Buffett’s ability to identify and capitalize on undervalued opportunities.

=== Lesson ===
Look for opportunities in strong companies facing temporary challenges. Assess their long-term prospects and market position before making investment decisions.