What Does Bank of America Mean for Berkshire Hathaway's Stock?
CEO Warren Buffett and his company Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) have long invested in bank stocks. Of the 10 top holdings in Berkshire's portfolio, four of them are banks. But as the coronavirus pandemic has struck the economy and the banking sector has been hit hard, Bank of America (NYSE: BAC) has emerged as Buffett's clear favorite among his bank stocks, and among his portfolio holdings. Here is what Bank of America means to Berkshire's portfolio.
The Oracle of Omaha seemed to go negative on bank stocks in the second quarter of the year, eliminating his position in Goldman Sachs (NYSE: GS), and significantly trimming his positions in other large banks like JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC). Banks are closely linked to the economy, so Buffett's moves could be tied to his belief that the economy is going to suffer over the next several years, which is not an unreasonable view.
Image source: Bank of America.
Source Fool.com
