Whether it’s a bull or a bear market is still up for debate, with the economy still in a recession. What is not up for debate is whether the investing community cares what Warren Buffett is saying and doing. The biggest voice that can be made is through action, and that is why the investing community tracks the routine changes in the investment portfolio of Berkshire Hathaway Inc. (NYSE: BRK-A).
Berkshire Hathaway Inc. (NYSE: BRK-B) has filed its 13F report with the U.S. Securities and Exchange Commission. The equity holdings are as of June 30, so there is always a bit of a look-back in the report. Some additional filings have been made about securities since the June 30 cutoff date, and this, along with the recent earnings report, will be given special attention as needed.
24/7 Wall St. has tracked the buying and selling from Buffett and his portfolio managers for years. The portfolio of equity investments matters greatly because it was estimated at close to $200 billion, before getting to see the numbers. The first quarter’s earnings report included almost $143 billion in cash and short-term Treasury investments, and it showed a total of $207.45 billion in equity securities, before factoring in $17.1 billion in “equity method investments.”
Berkshire Hathaway is the largest conglomerate of them all, with a $504 billion market cap. With the latest earnings report already out, we have yet to see any so-called whale of a deal in some time. Buffett claims that the premium that it takes to buy and own entire businesses is just too great, and he also said after the panic selling that valuations were not cheap just because the stock prices were battered.
Before getting into the portfolio changes and his big sale in banks and financials, the stock market recovery gains in the second quarter’s snap-back rally contributed to the $26.3 billion in earnings for the quarter alone. The investment gains were shown as about $34.5 billion. Perhaps the biggest news for the Buffett cash use and investing in the June-ending quarter was that he spent a record $5.1 billion repurchasing Berkshire Hathaway’s own common stock. Buffett’s total stock repurchases came to $6.7 billion during the first half of 2020.
To show how volatile the investments have been in 2020, note that the gains of $34.5 billion in the second quarter were still showing a loss of $19.7 billion over the first half of the year. Buffett indicated that the investment gains and losses in 2020 also included after-tax realized losses (sales of investments) of $3.5 billion during the second quarter and losses of $2.6 billion in the first six months. Those losses were likely from Buffett’s disastrous airline stock sales.
Apple Inc. (NASDAQ: AAPL) has been Buffett’s biggest bet, and it may have turned into one of his greatest moves ever. Apple’s market cap is nearing $2 trillion, and the recently announced stock split ahead of the coming iPhone 12 launch has catapulted Apple’s value above what the consensus of analysts had given as a fair value target. The Berkshire Hathaway stake remained at 245.155 million shares at the end of June. Amazingly, Berkshire Hathaway is only the third-largest holder of Apple.
Buffett also has continued making big stock purchases in shares of Bank of America Corp. (NYSE: BAC). Buffett’s stake was 925 million shares at the end of June, but the latest SEC filing showed a total beneficial ownership of more than 1.03 billion shares. The last filing as of August 4, 2020, was long after the June 30 cut-off date.
Amazon.com, Inc. (NASDAQ: AMZN) may be the same 533,300 share stake as last quarter, but the value had surged from barely $1 billion in March to almost $1.5 billion by the end of June and to nearly $1.7 billion on last look.
Barrick Gold Corp. (NYSE: GOLD) was a new position for Team Buffett, and frankly Buffett and his team are not known for talking about the endless value of gold. As of June 30, 2020, that was a stake of 20.918 million shares. One of the portfolio managers must have decided that it was time to ride the gold train higher, or maybe it was just a bet that cash flows were set to surge with higher gold prices.
JPMorgan Chase & Co. (NYSE: JPM) was down to 22,208,427 shares as of June 30, which appears to be down more than 35.5 million shares from just the prior quarter. The PNC Financial Services Group Inc. (NYSE: PNC) stake was lowered by about 3.8 million shares, cutting its position to 5,350,586 shares.