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The world-renowned investor, Warren Buffett, and his Berkshire Hathaway Inc. were hard at work in the fourth quarter, reducing their stakes in Apple Inc. (AAPL) while loading up on the bank stocks. However, Buffett did reduce his exposure in Wells Fargo & Co. (WFC), which has faced many problems when it comes to compliance practices over the past few years.

During the quarter, Buffett bought shares of JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), U.S. Bancorp (USB), and Bank of New York Mellon Corp. (BK) Additionally, Berkshire grew its stake in General Motors Co. (GM) by nearly 50%.



Dumping Apple, Not So Fast?

What may have been the biggest surprise, and likely has some investors scratching their heads, is why Berkshire reduced its stake in Apple. According to the latest filing as of December 31, Berkshire reduced its stake in Apple by 2.9 million shares to 249.6 million shares. However, what is not clear is why a 13G filing shows they own 255.3 million shares for the same event date. That is more than the reported 252.5 million they owned at the end of the third quarter on their reported 13F. It could be that not all of the entities that Berkshire controls reported their stakes on the 13F but were included in the 13G. It would raise the question at the very least as to whether Berkshire sold any stock in the quarter.

Scooping Up the Banks

Berkshire was also busy finishing what it started in the third quarter, scooping up shares in the big banks. During the fourth quarter, Berkshire added nearly 14.4 million shares of JPMorgan, raising its stake to 50.1 million shares. Meanwhile, they added 18.9 million shares to their already tremendous stake in Bank of America, raising total holdings to 896.1 million shares, a $22.0 billion position. They also increased their positions in Bank of New York Mellon and US Bancorp by roughly 3 million and 4 million shares, respectively.


Buying GM, Selling Wells Fargo

What comes as a surprise is that the firm increased its stake in struggling General Motors. Berkshire added nearly 20 million shares in the quarter, bringing its total share count to 72.2 million. It’s an unexpected action given that GM has seen sales slip in recent quarters at what many felt may be the peak of the current auto market cycle.

What is not surprising is that Berkshire sold nearly 16 million shares of Wells Fargo in the quarter, reducing its holdings to 426.8 million shares. The bank has been in the middle of many scandals in recent years, including the fake account scandal in 2016.

While Berkshire made many significant changes to its portfolio, what seems abundantly clear is that Buffett and Berkshire are not shying away from the banks. Even in the face of a horrific 2018 for the financial stocks, Buffett had no fear, being greedy when others were fearful.

This entry was posted on Monday, February 18th, 2019 at 9:14 am and is filed under 13F. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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