Berkshire Hathaway Reduces Shares in Banks, Invests in Gold

Warren Buffett’s Berkshire announced on Friday that it had sold some it shares in some of the largest banks in the U.S., including JPMorgan Chase & Co., Wells Fargo & Co, and also exited its investment in Goldman Sachs Group Inc.

Berkshire slashed its Wells Fargo stake by 26% to 237.6 million shares in the quarter. Berkshire’s first investment in Wells Fargo was in 1989. However, in early 2018, Berkshire began reducing its shares in the bank after it began losing value due to scandals and mistreatment of customers.

Buffett’s company reduced its stake in JPMorgan by 62% to 22.2 million shares. The company also dissolved its remaining 1.9 million shares in Goldman Sachs Group.

While Berkshire has taken the step to reduce its bank shares, it has invested in gold. As of June 30, a regulatory filing of Berkshire showed that the company has added a new 20.9 million share investment worth $563.6 million in Barrick Gold Corp, a Toronto based bullion company, and one of the world’s largest mining companies.

Many investors are also seeing the benefits of investing in gold as the prices continue to increase. Shares of Barrick set a new record last week after it rose 3.2% in after-hours trading, according to Berkshire.

While Buffett has greatly slashed his bank shares, he still remains expectant that the banking industry will recover to pre-COVID levels soon. He told investors in May that banks had enough capital to weather the coronavirus pandemic.

Berkshire still has existing investments in several other banks including Banks of America Corp where it recently invested more than $2 billion, giving the company an 11.9% stake worth nearly $27 billion.

Friday’s filing also revealed Berkshire exit from the Toronto-based Restaurant Brands International Inc., the parent company of Burger King and Tim Hortons.

As of Friday’s close, Berkshires Class A and B shares were down 0.6% and 0.5%.

Disclaimer:

Investingport does not own any of the stocks mentioned above. This post is for informational purposes only, you are to do your own due diligence before buying or selling any of the stocks mentioned in this post.