Does Buffett's Selling of JPMorgan Show His True Feelings About the U.S. Economy?
In my opinion, the biggest shock about Warren Buffett and Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) recent 13F quarterly report was the decision to trim their stake in JPMorgan Chase (NYSE: JPM) by nearly 62%. For a guy who says never to bet against America, Buffett just pulled a lot of his support from America's largest bank. However, I think the question to ask here is whether Buffett is really concerned about JPMorgan or more about the economy in general?
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I can certainly understand some of Buffett's bank reductions in the second quarter. Buffett heavily trimmed his position in regional banks like M&T Bank (NYSE: MTB) and PNC Financial Services Group (NYSE: PNC), which makes a certain amount of sense because the low-rate environment is going to reduce these banks' ability to make interest income on loans -- a heavier part of their business model than it is for larger banks in the U.S. That could make it difficult to offset future reserve builds they may need to cover potential loan losses down the road.
Source Fool.com
