Berkshire Hathaway Inc., which is the investment company run by none other than Warren Buffett, happens to also be the biggest investor in Wells Fargo and Company which is ticker symbol WFC. It is also a large holder of Bank of America Corp. preferred shares which is ticker symbol BAC. Berkshire Hathaway’s stock has reached a 13 month high this afternoon, and it hits this level because the major lenders made a big rally today.
The Class A shares of Berkshire went up about 1% on the day when the closing bell rang at 4 PM. The current shares are valued at $124,440. This is the highest price the shares have reached since April 2011. Wells Fargo made a 1.5% gain in share price today, and Bank of America gained 4.5% which is the main reason why Berkshire was able to reach their 13 month high.
To quote Warren Buffett, he mentioned last month that the US banks have “liquidity coming out of their ears” and he also commented that the US banks are also in much better shape than their European rivals. If you don’t know this already, the European banks are also struggling with a major debt crisis at this point in time.
Berkshire Hathaway, based out of Omaha, Nebraska, has been adding to their holdings of Wells Fargo since they literally opened the position four years ago, and they have been adding more shares even more recently. They’ve also invested $5 billion into Bank of America Corp., and they were granted warrants and preferred shares as part of their investment.
Tom Lewandowski, who is an analyst for Edward Jones and Co. based out of St. Louis, said that Berkshire gets a “bump when you see risk rally” for their financial holdings. He also stated in a phone interview that the investors “who can deal with the succession risk that comes along with Warren Buffett in owning Berkshire shares, I think it’s still a good long-term investment opportunity.”
Warren Buffett is the person who built Berkshire Hathaway and did so by taking over a failing textile maker which he then turned into a company worth $200 billion. This company sells a wide variety of products which range all away from ice cream to insurance.
He is actually in the process of preparing for his eventual retirement. It is said that his son Howard, who is also a Berkshire director, will be guarding the company as a non-executive chairman. This is going to take place as the Board of Directors makes their final decision on the successor CEO as well as two back up candidates. The company has not publicly identified any of the potential candidates just yet.