Warren Buffett has definitely started investing in the last few days and weeks, although the oracle of Omaha has made some smaller investments. especially the Bank of America was on the purchase list. Or Barrick Goldwhat made waves in the media world. And that, although Buffett and Berkshire Hathaway (NASDAQ: NASB) only invested a little over half a billion dollars in gold producers.
But its sales to other major US banks are also making waves: the Omaha Oracle, for example, has taken advantage of its existing shares Goldman Sachs completely separated. At Wells Fargo Buffett, however, reduced his stake by 61% last quarter. That is anything but little.
But what is Warren Buffett now about bank stocks: skeptical or confident? A question that is sure to burn under the nails of many investors. Possibly also to be able to better assess Berkshire Hathaway overall.
Not an easy question!
Basically, this question is not that easy to answer. It is true that essential comparisons initially suggest that Warren Buffett is rather skeptical about bank stocks. For example, the Omaha Oracle sold about $ 3 billion in bank shares and bought new shares in Bank of America for just about $ 2.1 billion. The bottom line is that the sales volume was greater than the purchase volume.
The number of purchases and sales also suggests a similar picture: With Goldman Sachs and Wells Fargo, two US banks were on the sales list, while only Bank of America was on the buy list. A clear trend can be deduced from this: Warren Buffett is definitely not in a positive mood for the entire banking sector. No, not even for the US banking sector.
The fact that Bank of America is now the second largest holding with a share of around USD 28 billion cannot be interpreted as a direct positive signal for the entire segment. However, and we can at least say this, Warren Buffett does not see the risk / reward ratio as negative as in the overall market. Or at least a little less bad in terms of risk. Otherwise Warren Buffett would hardly have increased his stake here.
Bet against America? Bet on Biden?
Overall, the issue of bank stock sales, the backing of the US economy, as some have called it, has attracted a lot of attention. Yes, there was even talk of betting against America. However, given the sales volume and overall portfolio of Berkshire Hathaway, that seems like nonsense. With its multi-billion dollar skin in the game, the oracle of Omaha continues to prove that it is convinced of the US prospects for the long term.
However, it could be that Buffett is now mutating into a political investor in the short term. His sale of bank stocks could be related to the approaching US election and the possibility of Joe Biden taking over from US President Trump. This could mean that the financial sector could again be regulated much more strictly.
Interesting portfolio cosmetics!
All in all, Warren Buffett is showing an exciting portfolio of cosmetics these days, whereby a clear core remains recognizable: the USA is still the leading region in the ranks of the oracle of Omaha. Smaller movements indicate trends, possibly also in the context of the approaching US election. Overall, however, Berkshire Hathaway has remained largely the same.
Warren Buffett may have become a little more skeptical about bank stocks. At the same time, however, he has increased his stake at Bank of America. His investments are therefore not really clear on this issue.
The post Bank Stocks: Is Warren Buffett Skeptical Or Confident Now? appeared first on The Motley Fool Deutschland.
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Vincent owns shares in Berkshire Hathaway. The Motley Fool owns and recommends shares of Berkshire Hathaway (B shares) and recommends the following options: short September 2020 $ 200 call on Berkshire Hathaway (B shares), short January 2021 $ 200 put on Berkshire Hathaway (B shares) and long January 2021 $ 200 call on Berkshire Hathaway ( B shares).
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