Brief - The Hustle

The banking industry now makes up over 40% of Warren Buffett’s portfolio

Written by Lindsey Quinn | Jun 30, 2020 7:59:54 AM

Berkshire Hathaway reported its Q3 holdings last week, and it looks like Warren Buffett’s laughing all the way to the bank: Half of Warren Buffett’s top 10 largest holdings are in the US banking industry.

BH purchased $13B worth of new bank stocks last quarter alone, bringing the firm’s total banking investments to $86B.

Here’s how that $86B breaks down:

  • Bank of America $25.8B
  • Wells Fargo $23.3B
  • American Express $16.1B (17% stake)
  • US Bancorp $6.6B
  • Goldman Sachs $4.1B
  • JPMorgan Chase $4B
  • Bank of New York Mellon $4B
  • M&T Bancorp $866m
  • PNC $829m
  • Synchrony Financial $647m

To put that in context, BH’s stake in Bank of America is the firm’s second largest holding (behind Apple at $56.9B).

Why is he banking on banks?

Because, theoretically, it’s a “forever business” — one that we’ll always need as long as traditional currency exists. 

*Cue uproar from one million blockchain enthusiasts*

And, he’s managed to invest a massive amount of capital in a single industry without triggering the feds. 

Aside from its American Express holding, all of BH’s investments are under 10% ownership to avoid regulatory oversight (The Motley Fool points out that it has special permissions from the Federal Reserve to own up to 25% of American Express).