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Berkshire Hathaway's latest quarterly report showed clear purchases in the banking sector. In total, nearly $ 14 billion was invested in equities. Almost all bank positions have been expanded and new acquisitions have been made in this sector.
More bank stocks in the Buffett depot
The mandatory release indicates that US $ 4 billion of the double-digit billion US stocks of Grobank JPMorgan have been transferred. The stake in Bank of America has been increased by nearly 200 million shares, or 30%. In addition, Berkshire Hathaway, the investment vehicle of Warren Buffett, has purchased 24 million additional shares in the United States. Bancorp and thus increased its share of this financial house by 25%. In addition, 5 million shares were purchased from Goldman Sachs, representing a 38 percent increase, making it the largest expansion of the last quarter. The position of Wells Fargo, in which Buffett has been investing since 2005, has not been expanded.
In addition, a new position in the banking sector is in the custody account: the investment legend participates for the first time in PNC Financial Services. For the third quarter, five of Warren Buffett's ten largest holdings were discovered – these shares now represent a significant portion of Holding Holding's portfolio.
Possible reasons to buy a bank
A few months ago, the Berkshire boss recently commented on the banking sector, which was better positioned and developed after the financial crisis: "The financial system is doing well," said CNBC. But Buffett's investments in its long-term strategy are primarily oriented towards attractive or favorable valuation – and this could still be the case for many US banks.
Another factor could be the interest rates that have been raised in the United States after a long period of time: the profit margins of this sector, which are mainly based on loans and interest on credit, can therefore increase. In addition, banks benefit from the US tax reform that reduced corporate taxes from 35% to 21%, thereby increasing the profits of US corporations.
In general, the financial crisis has influenced Buffett's belief that stringent regulation following the financial crisis has forced banks to clean up their balance sheets and allocate more resources to potential crises. Currently, the regulations are relaxed, leaving more opportunities for exploitation while, for example, the cash and debt ratios are more stable, explains "Motley Fool".
Overall, the banking sector can benefit from the current environment. Buffett seems to be convinced of the general conditions. Recently, in an interview with Bank of America by CNBC, he stated that he "liked the business model and management a lot and that he would probably stay invested for a long time".
Editors finanzen.net
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Image sources: Bill Pugliano / Getty Images / NICHOLAS ROBERTS / AFP / Getty Images / J. Kempin / Getty Images
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