Warren Buffett's stock portfolio took a $1.6 billion hit from Bank of America and Wells Fargo in a single day
- Warren Buffett's
Berkshire Hathawaytook a $1.6 billion hit to its portfolioafter Bank of Americaand Wells Fargoshares dropped more than 5% on Wednesday.
- Shares slumped after the
banksreported double-digit declines in revenue and net income for the third quarter.
- Berkshire boasted an almost 12% stake in Bank of America — the second-biggest holding in its portfolio after Apple — and owned more than 3% of Wells Fargo at the last count.
- Buffett's company plowed $2.1 billion into Bank of America over 12 straight trading days to August 4, while it has slashed its Wells Fargo position by more than 60% this year.
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Warren Buffett's Berkshire Hathaway suffered a $1.6 billion blow to its portfolio from just two
The slump in Bank of America stock on Wednesday wiped $1.4 billion off the value of Berkshire's increased position, reducing it to $24.4 billion. The bank's stock price is down by more than a third this year.Berkshire took a smaller hit from Wells Fargo as it has a smaller position in the troubled lender.
The conglomerate has been a shareholder for more than 30 years, and counted the bank among its five most-valuable holdings for most of that period. It owned more than 500 million shares valued at north of $27 billion in 2016.Read More: UBS says investors need to diversify away from Big Tech — and shares 3 strategies that will them stay on top of the next phase of the market's recovery However, it gradually trimmed the holding over the next few years, then slashed it by more than 60% this year. As a result, it held fewer than 140 million shares in September, representing 3.3% of the total shares outstanding — its smallest stake in the bank 17 years.
Wells Fargo's stock slump on Wednesday cut the value of Berkshire's position by about $205 million, to $3.2 billion. The bank's shares are down 57% this year.
The $1.4 billion hit from Bank of America and the $205 million blow from Wells Fargo meant Berkshire saw a total of $1.6 billion in value erased from its stakes, assuming their size hasn't changed since it last updated investors.
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