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| Buffett Loses Billions on Bank Stocks Amid Banking Crisis |
Warren Buffett's holding company, Berkshire Hathaway, is feeling the heat of the ongoing banking crisis as it suffers a $12.6 billion loss on 15 of its worst-performing U.S.-listed stocks this year. Six out of the 15 worst performers are from the financial sector, which has been particularly affected by the market volatility. One of Buffett's major holdings, Bank of America, is the costliest loss due to the massive amount of shares owned by Berkshire Hathaway. The current position's value is down $4.3 billion this year, as the bank stock is down 12.8%. Other financial holdings such as Ally Financial, Bank of New York Mellon, and U.S. Bancorp are also hurting Berkshire Hathaway's portfolio.
The banking crisis has caused the market value of banks around the world to plunge by over $500 billion in just a week and a half, according to Bespoke Investment Group. The financial sector is particularly vulnerable, and banks' reassurances about their liquidity and solvency have not been able to calm investors' concerns. Buffett's long-standing preference for financials, which has served him well in the past, is now costing him a fortune.
Berkshire Hathaway's reduction of its holdings in some banks has been a smart move in light of the crisis. It sold off most of its shares in U.S. Bancorp and reduced its position in Bank of New York Mellon, resulting in only a $28.5 million loss on the latter's shares this year. However, the current situation has shown that banks are not easy stocks to hold, and even an investor like Warren Buffett is not immune to the market volatility caused by the ongoing banking crisis.
