Berkshire Hathaway (403089, – 3416.00, – 0.84%) of “stock god” Warren Buffett’s company has gained $12 billion from only two stocks this year — American Express and Bank of America (38.08, – 1.09, – 2.78%).
Regulatory documents show that the legendary investor’s business group held 152 million American Express shares at the end of last year. Since then, the stock has risen more than 20 per cent, adding about $4bn to the value of Berkshire’s stake to $23bn.
Bank of America’s shares have also risen more than 20% this year, bringing Berkshire’s 1 billion shares to nearly $40 billion in less than five months.
At present, American Express has surpassed Coca Cola (54.17, 0.17, 0.31%), becoming Berkshire’s third largest position stock, second only to Apple (133.11, – 1.73, – 1.28%) and Bank of America. The premise, of course, is that Mr. Buffett has not adjusted his position since the end of last year.
Mr. Buffett has owned American Express stock for more than 25 years and has never adjusted his position since 1998. In the meantime, however, the buyback of the credit card company raised Berkshire’s stake from about 11% to nearly 19%. Berkshire spent about $1.3 billion on American Express that year, which means it has gained nearly 18 times the return so far.
In 2011, Mr. Buffett made a big bet on Bank of America in exchange for its preferred shares and warrants with $5 billion. He exercised the warrants in 2017, immediately making the bank one of Berkshire’s largest holdings.
Last fall, Berkshire took another big position in Bank of America, investing $2.1 billion in 12 trading days, despite a sharp decline in U.S. banking stocks in the quarter.
So far, Buffett’s company has invested a total of $14.6 billion to buy bank of America shares, which means that it has gained about $25 billion in return, with a return rate of 170%.
Reprint indicated source：Spark Global Limited information