Even though the majority of Warren Buffett’s $63 billion is tied up in Berkshire Hathaway stock, he does own shares of other companies that the media doesn’t typically know about.
There’s no question that Warren Buffett is a phenomenal investor. The book value of Berkshire Hathaway has grown nearly 20% annually for the last 50 years. It makes perfect sense that Buffett will make excellent investments in his personal portfolio too.
Over the last few years, one particular sector where Buffett has found enormous value is in the banking sector. Berkshire Hathaway’s number one stock holding is Wells Fargo, and Berkshire actually owns 8.8% of the bank. During 2011, Berkshire shelled out $5 billion and invested it in Bank of America in exchange for owning preferred shares of the company.
Back in 2012, on a CNBC interview, Buffett mentioned that he personally owned shares of J.P. Morgan Chase Bank, even though Berkshire Hathaway does not own shares of the company. Buffett has had a lot of praise for Jamie Dimon, Chase’s CEO, saying he writes the best annual reports in the business.
It’s impossible to know if Buffett still own shares in J.P. Morgan Chase, but every indication tells us that he still loves the big banks.
Since 2012, Berkshire Hathaway continues to buy up more and more shares of Wells Fargo. In the beginning of this year, the firm locked in to owning the preferred Bank of America shares until 2019.
Regardless of the fact that the bank stocks have rebounded quite nicely from their lows at the end of the financial crisis, please understand that there’s still potential further upside. Over the last year, all of the major bank stocks have underperformed. J.P. Morgan Chase shares were only up 5.1%. Compare this to the S&P 500 index which is up 17.2% and the Financial Select Sector SPDR, which is up 10.9%, respectively.