Warren Buffet’s Berkshire Hathaway Increases Amazon Stake by 11%

Written By
G. Dautovic
August 15,2019

Berkshire Hathaway announced on August 14 that it is increasing its stake in Amazon by 11%. Warren Buffet’s holding company had first announced intentions to boost its stake in Amazon in May, but the legendary investor was not the person making the pick.

“One of the fellows in the office that manage money” did it on behalf of Berkshire, Buffett said upon announcement of the $923 million investment.

Buffet himself handles only the largest of Berkshire’s investments, stakes like Coca-Cola, Apple, and Wells Fargo. Investments under $1 billion are handled by the company’s other two investment managers, Todd Combs and Ted Weschler.

Securities and Exchange Commission filings show that Berkshire now owns 537,300 Amazon shares worth $947 million, up from the 483,300 shares that it reported in June.

Buffet has historically avoided making large investments in tech companies, especially after a rough chapter with IBM, but he did express his regret for not investing in Jeff Bezos’s company earlier: “I’ve been a fan of Amazon, and I’ve been an idiot for not buying.”

Berkshire’s Amazon stake remains much smaller than the company’s investment in Apple, which totals more than $49 billion, even though there were no shares purchased in the second quarter. Berkshire also slightly increased its stake in bank shares, more specifically its stake in Bank of America, which was raised by 3.5%, and its holding in US Bancorp, which grew by 2.4%.

Buffet’s bank holdings in Wells Fargo and J.P. Morgan Chase have remained the same this quarter after Berkshire disclosed an 18% increase in J.P. Morgan Chase last quarter. The company has also been selling, as well as attracting new investors during the past few months.

Berkshire sold its 31% stake in USG, a wallboard maker that was acquired by the German company Knauf KF in April, after Buffet labeled it a disappointing two-decade investment. It also cut investment in Charter Communications by 5%, even after the cable company’s stock surged 14% during the quarter.

Berkshire’s stock price is more than 12% below the record high set in October, mostly due to troubles with the Kraft Heinz investment. This is the company’s fourth-largest holding, and it recently hit a record low after management announced a $1.22 billion write-down upon missing revenue expectations. Buffet told CNBC in June that the Kraft investment was a “mistake in terms of paying too much.”

William Ackman, the billionaire owner of Pershing Square Capital Management, capitalized on lower share prices of Berkshire by purchasing 3.5 million B shares. This is the first big investment that his company made since buying a $900 million stake in Starbucks last year.

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I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.

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