A Rebound in Travel and Entertainment Is Fueling This Longtime Warren Buffett Stock
Legendary investor Warren Buffett first purchased the credit card and payments company American Express (NYSE: AXP) in 1964 on his own, but his company Berkshire Hathaway would later make the company a large position in its equities portfolio in 1994.
Buffett and Berkshire have long loved the stock, which is likely one of the reasons it hung onto American Express as it was dumping many other bank and credit card companies in early 2020 at the onset of the pandemic. When the pandemic first hit, consumers and businesses tightened their belts and prepared for the worst. Many activities were canceled and public entertainment venues closed for months on end, while flying anywhere became a nightmare. Because its business is a large beneficiary of travel and entertainment (T&E) activity, American Express' stock took a hit as a result. But Buffett and Berkshire, who have long believed in the company's strong brand power for many years, decided to sit tight with the belief that the company could weather the storm.
It's taken some time, but travel and entertainment spending finally returned in a big way in the second quarter of 2022 and is now absolutely fueling this longtime staple of Berkshire's portfolio.
Source Fool.com
