Jamie Dimon’s big bet on J.P. Morgan Chase’s stock, which he said he did on a whim, has paid off.
A year ago, the CEO of J.P. Morgan (JPM) bought up roughly $26 million worth of the bank’s stock in early 2016 amid a stock market sell off. At the time, Dimon acquired 500,000 shares at about $52.20 a piece. When asked a little while later why he had made the purchase, Dimon replied that he happened to have a morning when he didn’t have any plans.
That do nothing morning has really paid off for Dimon. A year later, and with Donald Trump as president, that stake has gained $16.9 million in value, for a one-year return of 65%, before dividends. And the timing was great. The stock closed at $53.07 the day Dimon bought the shares, and they haven’t looked back since.
That purchase boosted Dimon’s stake in the company to about 6.7 million shares, which is now worth $580.6 million, up $222 million in the past year.
Most bank executives who are compensated at least partially via stock also saw a boost in the value of their holdings. Goldman Sachs (GS) CEO Lloyd Blankfein owned roughly 2.3 million shares of his bank a year ago.
When he reported his holdings last year, Blankfein’s stake was worth $355.2 million. Now it’s worth $551.4 million.
The boost of Blankfein and Dimon’s stake in their respective companies was partially thanks to the already low prices of the two stocks a year ago. But shares of Goldman Sachs and J.P. Morgan also rose sharply following Trump’s election in November. Trump has already signed an executive order that could curb banking regulation, while his infrastructure spending plan is expected to hasten the Federal Reserve’s rate hike schedule.
