Nearly half of Warren Buffett's stock portfolio belongs to this industry

<p class = "canvas-canvas-text canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Warren Buffett pulled the investment chains to & nbsp;Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) for half a century. Even with Todd Combs and Ted Weschler now managing billions of equity, Buffett's stamp on the company's stock portfolio will be felt for many more years. & Nbsp; In addition, with Buffett's own wealth consisting of Berkshire shares, it's really hard to consider Berkshire's portfolio as Buffett's portfolio also. & nbsp; "data-reactid =" 11 "> Warren Buffett pulls the strings of the investment of Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) for half a century. Even with Todd Combs and Ted Weschler now managing billions of the company's capital, Buffett's stamp on the company's stock portfolio will be felt for many years. Moreover, with Buffett's wealth of Berkshire stock, it is no exaggeration to think that Berkshire's portfolio is also Buffett's.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "And if there is a big thing to remember from the latest company 13-F, the quarterly publication of its holdings in shares, is that Warren Buffett does not hesitate to invest in a sector that he knows well and that he is in good position to make big profits.According to his most recent 13-F, Berkshire Hathaway has massively invested $ 94.9 billion in financial services companies, close to & nbsp;half & nbsp;"data-reactid =" 12 "> And if there is one thing to remember from the company's last 13-F filing, the quarterly publication of its holdings in shares, it's that Warren Buffett n & # 39; He does not hesitate to invest in an industry he knows well and sees himself as well positioned to make big profits, according to his most recent 13-F, Berkshire Hathaway has invested $ 94.9 billion in financial services companies, or almost. half of the $ 199 billion equity portfolio.

Source of the image: Getty Images.

Banks dominate Berkshire portfolio

At the end of the first quarter, there were 16 businesses in the financial services sector. Here's the size of Berkshire's stake at the end of the quarter:

Data Source: Berkshire Hathaway Ranking 13-F. Berkshire shares are recorded as at March 31, 2019. Market value at closing prices on May 17, 2019.

Of the $ 95 billion that Berkshire invested in financial services, the vast majority of that – $ 85.6 billion at recent prices – was held in banks. In addition, three of Berkshire's five largest investments and six of its ten largest individual holdings are banks.

Why does Berkshire have so many bank stocks?

Buffett has had an interesting relationship with the banking sector over the decades. On one side, he pointed out the inherent risk of banks – they are highly indebted, generally lending about 90% of their capital, potentially exposing them to the slightest risk of financial problems.

The global financial crisis of 2009-2010 was an example of how much bank debt could escape terribly. It was by far the worst banking crisis in nearly a century, but history tells us that banks tend to experience a kind of crisis almost every decade. a bad actor becomes, well, creative with their practices and a handful of others will follow soon. However, the best managed and capitalized banks can also make excellent long-term investments. Wells Fargo and American Express, two of the largest holdings in Berkshire, are proof of this.

Buffett launched a call for heavy investment in both cities more than 20 years ago, spending less than $ 10 billion to buy his stake in Wells and $ 1.29 billion for American Express. At the time of writing these lines, the $ 11 billion and the change that Buffett spent on these investments represent nearly $ 37 billion, while Berkshire has paid more than $ 1 billion in dividends. Last year.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Similarly, its stake in Bank of America – a much more recent investment from the financial crisis – & nbsp; cost $ 11.7 billion, but its value now exceeds $ 25 billion and has generated dividends of $ 551 million in 2018. "data-reactid =" 44 "> Similarly, its stake in Bank of America – a Much more recent investment from the Financial Crisis cost $ 11.7 billion, but its value now exceeds $ 25 billion and has generated $ 551 million in dividends in 2018.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Moreover, these big banks have a lot in their After having spent most of the last decade at unprecedented levels, interest rates began to rise two years ago, which is already an advantage.increase the profits of the largest US banks. "data-reactid =" 45 "> Moreover, these big banks have a lot to their advantage in the coming years.After spending most of the last decade at unprecedented levels, interest rates started to to increase a few years ago already increases the profits of the largest American banks.

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