Warren Buffett's investments in financial firms

Warren Buffett has made several investments in financial firms throughout his career. Some of his notable investments in this sector include:

American Express: In 1964, Buffett bought $13 million worth of American Express stock, which at the time was reeling from the “Salad Oil Scandal”. The investment paid off as the company rebounded, and today, it is one of Berkshire Hathaway's largest holdings.

Wells Fargo: In 1989, Buffett started purchasing shares in Wells Fargo, one of the largest banks in the US. Berkshire Hathaway is now the largest shareholder in Wells Fargo, with a stake worth over $20 billion as of 2021.

Goldman Sachs: During the 2008 financial crisis, Goldman Sachs was struggling and needed an infusion of capital. Buffett stepped in and invested $5 billion in the company, which helped restore confidence in the firm and the broader financial markets.

Bank of America: In 2011, Buffett invested $5 billion in Bank of America, another struggling financial institution at the time. The investment helped shore up the bank's balance sheet and has since earned Berkshire Hathaway billions of dollars in profits.

JPMorgan Chase: In 2018, Berkshire Hathaway invested over $4 billion in JPMorgan Chase. This investment was seen as a bet on the strength of the US economy, as well as on JPMorgan's ability to weather any future financial storms.

Overall, Buffett's investments in financial firms have been a key driver of Berkshire Hathaway's success over the years, and he is known for his ability to spot undervalued companies with strong long-term prospects.

What're Warren Buffet portfolio's value and top holdings?

Louisiana-Pacific Corp. (LPX)

Berkshire boosted its position in Louisiana-Pacific by more than 20 percent during the quarter to more than 7 million shares. Louisiana-Pacific is a building solutions company that serves new home construction, repair and remodeling markets. The Nashville-based company operated 25 plants across the U.S., Canada, Chile and Brazil as of Dec. 31, 2021.

Paramount Global (PARA)

Berkshire added slightly to its existing position in Paramount Global, which operates film and television studios, cable networks such as MTV and Nickelodeon, and the CBS Network. Berkshire held 93.6 million shares at the end of 2022, up from 91.2 million shares in September.

Apple (AAPL)

Berkshire increased its stake in Apple, its largest position, by a small amount during the quarter. Berkshire now holds more than 895 million shares of the iPhone maker, which it first began buying in the first quarter of 2016. Berkshire’s Apple stake was worth more than $100 billion at the end of 2022.

Berkshire Hathaway’s portfolio holdings: Where Buffett & Co. are selling

Taiwan Semiconductor (TSM)

Berkshire slashed its stake in Taiwan Semiconductor by about 86 percent during the quarter. The position had only just been disclosed in the company’s third-quarter filing. The Taiwan-based company makes advanced computer chips for a global customer base including Apple, in which Berkshire holds a major stake. Berkshire held about 8.3 million shares of Taiwan Semiconductor at the end of 2022.

Chevron (CVX)

Berkshire slightly reduced its Chevron holdings during the fourth quarter, selling about 2.4 million shares to bring its stake to about 163 million shares at the end of December. The company is one of Berkshire’s five largest holdings and comes with a dividend yield above 3 percent.

U.S. Bancorp (USB)

Berkshire cut its position in U.S. Bancorp by more than 90 percent, reducing its stake from 77.8 million shares at the end of the third quarter to 6.7 million at the end of 2022. Berkshire has held a stake in the bank for more than 15 years.

Activision Blizzard (ATVI)

Berkshire reduced its stake in video game maker Activision Blizzard, which has agreed to be acquired by Microsoft for $95 per share in cash. Berkshire now holds 52.7 million shares, down from 60.1 million at the end of the third quarter. Buffett said at Berkshire’s annual meeting in April that he established the position as an arbitrage bet on the deal’s closing. Activision recently traded for around $76 per share, but the Federal Trade Commission sued to block the deal in December, arguing it would be anti-competitive.

Bank of New York Mellon (BK)

Berkshire cut its position in Bank of New York Mellon by nearly 60 percent during the fourth quarter, cutting its stake by more than 37 million shares. The investment was worth about $1.1 billion as of the end of December.

McKesson Corp. (MCK)

Berkshire cut its stake in healthcare distributor McKesson by about 10 percent during the quarter. The position was first established in the first quarter of 2022 and was increased during the second quarter. The stake in the Irving, Texas-based company was worth about $1.1 billion at the end of 2022.

Kroger (KR)

Berkshire further reduced its holdings in the large grocer Kroger, paring its stake by a little over 0.53 percent. Berkshire trimmed more than 268,000 shares from its position during the fourth quarter, leaving a stake that was valued at about $2.2 billion. Kroger announced in October its plan to acquire rival Albertsons in a $24.6 billion deal it said would help it better negotiate with vendors.

Ally Financial (ALLY)

Berkshire reduced its position in Ally Financial by less than 1 percent during the quarter. The stake was established in the first half of 2022, but the stock declined through the end of the year. Berkshire sold 200,000 shares during the fourth quarter and its position was worth about $730 million at the end of 2022.

Top stock holdings:

Apple (AAPL) – $116.3 billion

Bank of America (BAC) – $33.5 billion

Chevron (CVX) – $29.3 billion

Coca-Cola – $25.4 billion

American Express (AXP) – $22.4 billion

Buffett spent about $5.2 billion repurchasing Berkshire stock in the first nine months of 2022. This is an indication that he believes the shares are undervalued and continuing shareholders will benefit from the buybacks.

Information on Berkshire’s fourth quarter share repurchases will be available when the annual report is released later this month.

Warren Buffett's long-term investing strategy

Warren Buffett is widely regarded as one of the most successful long-term investors of all time. He has built his fortune by making long-term investments in solid companies with strong fundamentals, and has famously said that his favorite holding period for a stock is "forever."

Here are some key principles of Warren Buffett's long-term investing strategy:

Invest in companies with strong fundamentals: Buffett looks for companies that have a strong competitive advantage, a durable business model, and a long-term track record of profitability. He also likes companies that are easy to understand and have a clear and sustainable business model.

Focus on the long-term: Buffett believes in the power of compounding, and so he takes a long-term approach to investing. He is willing to hold onto a stock for years, or even decades, if he believes in the company's long-term prospects.

Buy when others are fearful: Buffett is famous for saying that "be fearful when others are greedy, and greedy when others are fearful." He looks for buying opportunities when the market is in a panic and stocks are trading at a discount to their intrinsic value.

Don't try to time the market: Buffett doesn't believe in trying to time the market, and instead focuses on buying quality companies at a fair price. He has said that "the stock market is a device for transferring money from the impatient to the patient."

Avoid speculation: Buffett avoids speculative investments, such as cryptocurrencies and penny stocks, and instead focuses on investing in companies with a solid track record and a proven business model.

Overall, Warren Buffett's long-term investing strategy is based on a disciplined approach to investing in quality companies with strong fundamentals, and holding onto them for the long term

5 Tips From Morningstar to Invest Like Warren Buffett

Morningstar is a respected financial research and investment firm that provides insights and analysis on investment strategies. Here are five tips from Morningstar to invest like Warren Buffett:

Invest in high-quality companies:

Warren Buffett is known for investing in high-quality companies that have a competitive advantage and a long-term growth potential. To identify such companies, look for those with strong brand recognition, a history of steady earnings growth, and a competitive moat that sets them apart from their peers.

Look for undervalued stocks:

Buffett has built his fortune by buying stocks when they are undervalued and holding onto them for the long-term. To find undervalued stocks, look for companies with low price-to-earnings ratios, solid balance sheets, and a history of consistent earnings growth.

Focus on the long-term: Buffett is a proponent of a long-term investment approach. He advises investors to hold onto their stocks for years or even decades, rather than trying to time the market. When investing for the long-term, you should focus on the fundamentals of the company and its potential for growth over time.

Do your own research:

Buffett is known for his meticulous research and analysis of companies before making an investment. To invest like Buffett, it's important to do your own research and not rely solely on the opinions of others. This includes reading annual reports, financial statements, and other relevant information about the company.

Be patient and disciplined:

Buffett's success is due in part to his patience and discipline when it comes to investing. He advises investors to stay disciplined, avoid impulsive decisions, and focus on the long-term prospects of the company. This means being willing to wait for the right opportunity to invest, and not getting caught up in short-term market fluctuations.