Warren Buffett Sours on Banks and Likes (Gulp!) Gold
Berkshire Hathaway’s only new purchase in the second quarter was Barrick Gold, which doesn’t indicate confidence in a quick economic recovery.
Folding on banks.
Photographer: Houston Cofield/Bloomberg
Dumping bank shares and investing in a gold miner? It certainly doesn’t sound like a Warren Buffett move, but that’s exactly what the investing guru’s company did in the second quarter, according to a regulatory disclosure Friday. It’s not a good sign for markets.
Buffett, the fifth-richest person in the world, has loved few things more in his life than sweets, soda and compound interest — but banking stocks have come pretty close. Buffett was there to boost them during and after the last crisis, and he’s remained a top shareholder in most of the big U.S. banks. That’s why it’s so jarring that Buffett’s Berkshire Hathaway Inc. sold 62% of its stake in JPMorgan Chase & Co. and cut 26% of its Wells Fargo & Co. holdings last period amid the Covid-19 crisis. The conglomerate also pared back positions in other financial-services firms including PNC Financial Services Group Inc., M&T Bank Corp., Bank of New York Mellon Corp., Mastercard Inc. and Visa Inc. Berkshire all but exited Goldman Sachs in the first quarter — in the first of Buffett’s worrying signals — and finished the deed in the second.