Berkshire Hathaway, the holding company controlled by legendary investor Warren Buffett, made several interesting changes to its portfolio in the quarter to the end of June.

As well as the much-publicised dumping of airline shares, which Buffett admitted was ‘a mistake’ to have bought in the first place, the firm reduced its exposure to large US financial institutions such as JPMorgan Chase and Wells Fargo, selling billions of dollars-worth of stock. It also sold the final tranche of shares in Goldman Sachs which it acquired at rock-bottom prices during the global financial crisis.

According to Berkshire’s latest 13F filing last week, the value of the firm’s equity holdings increased from around $176 billion dollars in March to some $202 billion by the end of June, with the largest five holdings – American Express, Apple, Bank of America, Coca-Cola and Kraft Heinz – making up more than three quarters of the value of the portfolio.

Among the most significant disposals, the firm sold 85.6 million shares of long-term holding Wells Fargo taking its stake down to 5.8% from 7.9%. Despite initially rebounding from its March lows, the current share price of $25 is close to its 2020 low and not that far from Berkshire’s original purchase price decades ago. The bank was once a key investment for Berkshire but the firm has been steadily cutting its stake following claims of mis-selling to customers.

Berkshire also cut its stake in JPMorgan Chase by nearly two thirds or 35.5 million shares, taking its holding to just 0.7% of the bank’s equity from 1.9% in March.

Stakes in Bank of New York Mellon, M&T Bank and US Bancorp were also reduced, along with holdings in payment system providers Mastercard and Visa.

Excluded from the filing was last month’s purchase of another $2 billion worth of shares in Bank of America, which took Berkshire’s stake to 11.9%, but on a net basis it has still reduced its exposure to financial stocks significantly.

The most unexpected new investment was a $560 million stake in the world’s second-largest gold producer Barrick, news of which sent the miner’s shares soaring 11% on Monday.

Despite Buffett having criticised gold investors for years for ‘jumping on the bandwagon’ when prices were rising, and having constantly extolled the virtues of owning real businesses over the ‘barbarous relic’ as it is known, Berkshire’s managers appear to be hedging their bets, albeit in a small way as the holding in Barrick accounts for just 0.3% of the portfolio.

‹ Previous2020-08-20Next ›