Warren Buffett’s Berkshire Hathaway reworked its financial-sector bets amid regional bank turmoil, exiting US Bancorp and Bank of New York Mellon, even as it placed a wager on Capital One Financial. Capital One surged as much as 9.6 per cent.
Berkshire’s move out of several financial stocks and into Capital One in the first quarter, detailed in a regulatory filing, comes after Buffett said publicly he was cooling on the sector. Bank failures earlier this year and concern about liquidity at various regional lenders have shaken finance.
This is far from Berkshire’s first revamp of its financial stock picks. In May of last year, the conglomerate disclosed it had fully cut its position in Wells Fargo & Co, which once ranked as its biggest common-stock bet. Berkshire unveiled new positions in auto-lender Ally Financial and Wall Street titan Citigroup in that same filing, and still holds those firms.
Berkshire had been trimming US Bancorp and BNY Mellon holdings as far back as the third quarter of last year. In an interview with CNBC in April, Buffett said he decided to adjust his exposure to the sector after noticing some firms prioritising earnings over “basic banking principles.”
The conglomerate was a net seller of equities in the quarter, pocketing $10.4 billion from stock sales after deducting purchases. While the sale of financial names played a part in that, Berkshire took the opportunity to adjust its exposure to industrial firms. It closed out its position in TSMC after Buffett said he was worried about the stock’s exposure to geopolitical risk.