Investment

Bank stocks that have invested in 32 years are suddenly gone?

Raymond Beers Published On:

Berkshire Hathaway’s first quarter position report shows that its holdings of Wells Fargo’s stock are almost liquidated. Since purchasing Wells Fargo’s stock for the first time in 1989, Berkshire Hathaway has invested at least $12.7 billion to purchase 10% of the bank’s shares. As a practitioner who firmly believes in the power of long-term investment, Buffett has held stocks in the bank for 32 years.

As of the end of March this year, Berkshire Hathaway held only 675,000 shares of Wells Fargo Bank, reducing its holdings by about 98%, which was almost liquidated. Before falling into the scandal of fraudulent accounts, Wells Fargo was regarded as one of Buffett’s most successful investments.

The US Securities Regulatory Commission (SEC) requires fund managers with assets under management of more than 100 million U.S. dollars to publish a document called “Form 13F” to disclose their positions in stocks and bonds within 45 days after the end of each quarter.

According to regulatory documents, as of the end of the first quarter of this year, the total market value of Berkshire Hathaway’s holdings was US$270.435 billion, an increase from US$269.928 billion at the end of the previous year. In terms of holdings, in the first quarter of this year, Berkshire Hathaway liquidated 2 stocks and reduced its holdings of 11 stocks. Only the newly opened positions bought about 4.1 million shares of British insurance company Aon, and increased its holdings of 4 stocks. stock. As of the end of the quarter, its top ten positions accounted for 86.72% of its total market value.

Its largest holding stock is still Apple, with a market value of approximately US$108.4 billion, and the number of shares held remains unchanged. However, as Apple’s stock price fell by 7.8% in the first quarter of this year, its share of Berkshire’s total holdings was 40.07%, a drop of 3.54 percentage points from the end of last year. Followed by Bank of America, American Express, and Coca-Cola, which accounted for 14.45%, 7.93%, and 7.8% of total assets, respectively.

It can be seen that many financial stocks including UBS, Wells Fargo, Synchrony Financial, a consumer credit company, and Stoneco, a Brazilian financial technology solution provider, were reduced by Buffett. Specifically, UBS was reduced by its holdings of about 1.45 million shares; Wells Fargo Bank was reduced by 51.749 million shares. At the same time, the position of Stoneco, a Brazilian financial technology solution provider, was cut by 24%.

What has attracted much attention is that Berkshire has cut its holdings of Wells Fargo Bank by 98%, and its holdings have been drastically reduced from 52.4 million shares to 675,000 shares, which is almost a liquidation. Since purchasing Wells Fargo’s stock for the first time in 1989, Berkshire Hathaway has invested at least $12.7 billion to purchase 10% of the bank’s shares. As a practitioner who firmly believes in the power of long-term investment, Buffett has held stocks in the bank for 32 years.

Before falling into the scandal of fraudulent accounts with customers, Wells Fargo was regarded as one of Buffett’s most successful investments. At the Berkshire Hathaway shareholders meeting held in early May of this year, Buffett said that bank stocks were his favorite, but his current position in the financial or banking industry cannot exceed 10%. More positions will be held. Give him a “headache”.

In fact, Buffett has maintained a cautious attitude in investing in large bank stocks in recent years. Last year, he successively cleared the holdings of Goldman Sachs and JPMorgan Chase.