Warren Buffett: investments in Apple, Bank of America and American Express are expensive

The S&P 500 remains on track for one of its worst half-year starts since 1970. Only five times since 1932 has it lost 15% or more in the first six months of a year; and so far, it has lost just under 18%. A fall cemented above all in this second quarter about to end, in which the penalty has been almost 14%.

Few Wall Street investors have been able to weather the storm, and this time among them there has been no Warren Buffett. His large investments in Apple, Bank of America or American Express have led to the stock portfolio of the Oracle of Omaha to record losses on paper of about 50,000 million dollars.

Still, these unrealized losses (and it doesn’t look like the mogul intends to sell right now) are manageable for Berkshire Hathaway, with a balance sheet that had over $100 billion in cash and equivalents at the end of March, and expected net income of $30 billion this year.

Apple accounts for most of the losses on paper, with shares of the iPhone maker down about 18% so far in the second quarter to around $140. Taking into account that Berkshire Hathaway owned more than 911 million shares of Apple at the end of the first quarterWarren Buffett’s vehicle has seen more than $30 billion worth of value evaporate from his stake in the company with the bitten apple.

However, in the long term, the tycoon’s favorite, the investment is being more than lucrative, since Apple shares have multiplied their value by four from the average of 34 dollars to which they were bought by Berkshire. Apple is also Buffett’s main investment, representing 39.8% of his portfolio.

Berkshire’s other big bet is Bank of America, representing 10.3% of its portfolio. The bank has not had a good second quarter either, with an accumulated fall of just over 20% to 32 dollars. Taking into account that it controls more than 1,000 million shares, a stake of 12.8%, the losses on paper in the last three months are around 10,000 million.

Behind are the holdings in Coca-Cola Co (7.8% of the portfolio) and Chevron (7.1% of the portfolio), which have hardly changed this quarter. Worse has gone to the fifth largest bet, the one that maintains in American Express. The financial entity has fallen more than 20%, so the 151.6 million shares that Buffett owns are worth about 6,000 million euros less than three months ago.

Berkshire Hathaway’s stock portfolio stood at $390 billion at the end of the first quarter, and about $400 billion including a stake in Kraft Heinz, which receives a different accounting treatment.

It will be interesting to see if Buffett continued his stock-buying policy in the second quarter, having shelled out more than $50 billion worth of stock in the first. Another point of interest when the quarter is over will be to see if the holding company stepped up the share buyback program, after it slowed in the first quarter to about 3,000 million dollars – less than half the quarterly pace of 2021 -.

Buffett told Berkshire’s annual meeting in April that the company was not buying back, but that may have changed with the stock’s slide in recent weeks. The Oracle of Omaha has already said that Berkshire Hathaway will be price sensitive in its buybacks.