Warren Buffett dumps more stocks; Goldman Sachs, JP Morgan, Travelers Insurance, and Phillips 66

Warren Buffett and Berkshire (BRK-A and BRK.B) have left a lot of investors confused about the state of investing in these times. About a month ago the company sold off its major airline shares. Berkshire announced that it had sold nearly 18% of its Delta Air Lines stake and 4% of its Southwest Airlines holdings. The reason for its sell-off could be as a result of the impact of the coronavirus pandemic in the industry. In total, the company sold about 13 million Delta shares for about $314 million and nearly 2.3 million Southwest shares for about $74 million.

Earlier this month, he told investors that he made a “mistake” betting on airlines before. He has, however, continued to sell stocks amid the coronavirus pandemic, according to Berkshire’s latest regulatory filing.

Based on the recent and previous sell-off patterns of Berkshire with no new purchases, the company currently sits on a large pile of fortune. Buffet has cut down Berkshire’s holding in major industries, especially banking and airline, growing its cash pile to $137 billion.

Adding to the list of sell-offs, Buffet has sold off a good percentage of his 84% stake in Goldman Sachs. His holding at Goldman Sachs was a longtime holding which he acquired for $5 billion during the 2008 financial crisis.  According to Berkshire’s filing, Buffet dramatically decreased his shares in Goldman from 12 million to 2 million after seeing a major decline in the first quarter. The rest of his investment at Goldman is valued at nearly $330 million.

In the first quarter, Berkshire Hathaway also cut its stake in JPMorgan Chase & Co. by 3%. And fully exited its positions in insurance giant Travelers Insurance and Philips 66, an energy company.

The company also cut its investment in Amazon by 0.7% in the first quarter, despite Amazon’s substantial performance. However, it was reported that the retail giant warned of “mounting costs” due to challenges to the pandemic, according to Forbes.

Since the start of the coronavirus pandemic, Berkshire has focused more on a few small-scale buying while selling off major stakes. The company has since boosted its stake in PNC Financial Services Group, a major bank lender in the United States, to 6%.

Charlie Munger, Buffett’s partner also spoke in defense of Warren and Berkshire last month. He said that the company intends to pass through these trying times “with a whole lot of liquidity.” He further added that “we’re not playing, ‘oh goody, goody’. Everything’s going to hell, let’s plunge 100% of the reserves [buying into businesses].”

Despite its efforts to liquidate its large investments at all costs to protect the company and its stakeholders, Berkshire Hathaway had a massive net loss of almost $50 billion, according to its first-quarter reports. The company sold off $6.5 billion worth of stocks in April, compared to the $426 million worth of equities it purchased during the same month. In the shareholder annual meeting in early May, Buffet admitted that the conglomerate did “very little in the first quarter, hoping that the next quarter would be an improvement from the first.