Warren Buffett said at Berkshire Hathaway's annual meeting that banks were not his primary concern. Clearly the market situation has changed his mind as he sells stock in US banks Goldman Sachs, Bancorp and JPMorgan Chase & Co.

By Ian Horswill


Posted on May 18, 2020

Berkshire Hathaway whose chairman and CEO is Warren Buffett, the Oracle of Omaha, is showing once again he is a long-term investor.

Berkshire Hathaway, according to a Securities and Exchange Commission filing released on Friday (US time) reduced its holdings in the US bank Goldman Sachs by 84%. Berkshire Hathaway also sold its stakes in energy group Philips 66 and insurer Travellers with the world economy unable to shake off the coronavirus pandemic.

Earlier last week Chairman and CEO Warren Buffett filed papers on Monday and Tuesday to sell 497,786 shares of the Minneapolis-based bank Bancorp for a combined US$16.3 million. Berkshire Hathaway still holds about 150.5 million shares of Bancorp and remains its largest investor. Warren Buffett himself owns 884,230 shares in Bancorp.

In April, Berkshire sold almost 860,000 Bank of New York Mellon shares for about US$30 million. The sale reduces Berkshire Hathaway’s stake in the bank from 10.4% to 9.8%, which means Berkshire Hathaway now can dispose of shares without having to reveal it to the market.

Warren Buffett at the annual meeting of Berkshire Hathaway earlier this month said he had sold off his large stakes in four US air carriers American Airlines, Delta Air Lines, Southwest Airlines and United Airlines at a large loss. Buffett admitted that he had made a “mistake” and that “the world has changed for airlines.”

The billionaire investor’s company decision to reduce his Goldman holding helped to reduce their value from about $US2.8 billion to less than $US300 million.

None of the stocks Warren Buffett has sold has recovered from the March stock sell-off, whereas the big tech companies Microsoft, Apple, Amazon, Alphabet and Facebook and the NASDAQ have.

Warren Buffett said at the company’s annual shareholders meeting that banks were not his primary concern.

“I think the banks have behaved very well and are in very good shape …. They’ve built up great reserves there and they’ve built their own balance sheets, and they are not presently part of Chairman Powell’s problem, whereas they were very much part of Chairman Bernanke’s problem back in 2008 and ’09.”

Berkshire Hathaway cut its stake in another bank, JPMorgan Chase & Co, by 3% in the first quarter. It also cut its investment in e-commerce giant Amazon by 0.7%.

Warren Buffett’s Berkshire Hathaway has not made any significant stock purchases and is sitting on cash totalling US$137 billion. The investment company boosted its stake in bank PNC Financial Services Group to 6%.