While it’s widely known that October was a cataclysmic month for most hedge funds and asset managers, what their positions were as of September 30, or just as the S&P hit an all time high is hardly indicative of their holdings today, some 45 days later. Alas, thanks to the avalanche of 13-Fs filed this week, and mostly on Wednesday afternoon, the best we can do is observe holdings as of the end of last quarter.
Here we can make one observation: the holdings of most hedge funds today vs 45 days ago are vastly different, with perhaps one exception: the stickiest money of all, Berkshire Hathaway.
Which is why of all 13-Fs filed this afternoon, the one that was if not most interesting, the most representative of their current holdings, is that belonging to Warren Buffett.
So looking at his latest holdings as of today’s 13F, here is what we find:
Buffett added 2 new banks to his portfolio, JPMorgan and PNC Financial, adding some 35.7 million shares of the former and 6.1 million shares of the latter, amounting to $4 billion and $829 million as of Sept. 30, respectively.
As Bloomberg notes, the JPMorgan stake deepens the ties between the two companies as Todd Combs, one of Buffett’s top deputies, is already on JPM’s board, and Berkshire has teamed up with JPMorgan and Amazon.com Inc. for a health care venture.
Why the bank additions? Buffett may be hoping that a stronger U.S. economy and rising interest rates will benefit the nation’s biggest banks. In fact, Berkshire is now a major shareholder in four of the five biggest U.S. banks – only Citi is not on the list – and he boosted his investments in Bank of America Corp. by 29 percent and Goldman Sachs Group Inc. by 38 percent (more below).
Berkshire entered new stakes in Oracle in the third quarter (41.4 million shares, or $2.1BN as of Sept 30) and put on a new bet on insurer Travelers (3.5 million shares, amounting to $460MM), which is somewhat surprising as it competes with Berkshire’s own Geico unit. These new positions were offset by exits in his smallish positions in Walmart and Sanofi.
Buffett also boosted his stakes in Apple by 523K shares, bringing his total to 252.5MM shares, amounting to $57 billion as of Sept. 30, a number which is about 20% lower today, when the world’s most valuable entered a bear market. Berkshire also added to its stakes in Bank of America, US Bancorp, Goldman, Bank of New York Mellon – in fact his 77.8 million stake makes him BoNY’s top shareholder with a 7.9% stake in the custody bank – as well as Delta, and General Motors.
With these latest additions, Buffett is now the biggest shareholder in Bank of America, Bank of New York, Wells Fargo and US Bancorp.
Buffett also unexpectedly cut stakes in what was formerly his favorite bank, Wells Fargo, which is now his 3rd most valuable position at $23.2BN as of Sept 30, after top holding Apple and dropping behind Bank of America, his 2nd largest holding at the end of Q3 at $25.8BN as of Sept 30. Berkshire also cut stakes in Phillips 66, as well as several airlines including American Airlines, United Continental, and Southwest.
Of course, what Buffett may have done with one or more of these stakes in the wildly turbulent period that followed Sept 30 will be unveiled some time around Valentine’s Day 2019.
The full breakdown of Berkshire’s holdings as of Sept 30 is below.