American business magnate Warren Buffett’s Berkshire Hathaway are extremely bullish on banks lately, Buffett said in a recent interview “They’re a business I understand, and I like the price at which they’re selling relative to their future prospects, I think, ten years from now, that they’ll be worth more money. And I feel there’s a very high probability I’m right.”
During the third financial quarter of 2018 Buffett’s Berkshire Hathaway bought into a substantial position into JPMorgan Chase, purchasing almost 36 Million shares. Buffett then continued to add to his Portfolio by purchasing up another 14.5 million shares during the final quarter, making it the 9th largest stock holding for Berkshire with over 50 million shares held. When asked about how he thinks the investment will turn out in the long run Buffet went on to say “I don’t think that it will turn out to be the best investments at all, of the whole panoply of things you could do, but I’m pretty sure that they won’t disappoint me.”
Buffett, the eighty eight year old investor and philanthropist has always publicly praised JPMorgan’s CEO Jamie Dimon, he has done for years, however Buffett has not owned or invested into the company until late last year. Recently Buffett made comments regarding his investment, stating that he had made a big mistake by not buying JPMorgan stock previously.
In recent months, Berkshire Hathaway has been extremely bullish on bank stocks, Buffett has been buying up large positions for Berkshire, in many large names, including Bank of America, Bank of New York Mellon, PNC Financial and Goldman Sachs. These recent positions have joined Buffett’s long term holding of Well’s Fargo stock, which he purchased back in 2001. Although Buffett has been seen to trim his position in Well’s Fargo, it is still in the top three largest positions held by Berkshire.
This move into the banking industry has investors wondering what exactly Buffett plans to do, as in his most recent note to investors in February, he did make claims he wants to make an ‘elephant sized’ acquisition.
Richard Davis – Middleton Associates