Berkshire Hathaway, the Omaha, Nebraska conglomerate owned by Warren Buffett, spent $4 billion in the third quarter for a stake in JPMorgan Chase, giving it big stakes in three of the four largest U.S. banks.
According to a report in the Wall Street Journal, Berkshire has around 9 percent stakes in Bank of America and Wells Fargo and is the top investor in both companies. With the JPMorgan investment, Berkshire owns about 1 percent stake in the company and isn’t among the biggest shareholders, noted the Wall Street Journal, citing Factsheet. The Wall Street Journal noted that during the third quarter, Berkshire acquired a new stake in PNC Financial Services Group and increased its investments in Goldman Sachs, Bank of America, Bank of New York Mellon and U.S. Bancorp. The paper cited a Securities and Exchange Commission filing.
Earlier in 2018, Buffett told Yahoo Finance that he has a small personal stake in JPMorgan and that Berkshire should have acquired shares in the company, saying it is a “terrifically run operation.” The investment on the part of Berkshire does come amid partnerships between the two companies. The paper pointed out that Berkshire portfolio manager Todd Combs sits on the JPMorgan board and JPMorgan CEO James Dimon is a friend of Buffett. In June the two wrote a joint op-ed calling for companies to stop giving quarterly earnings forecasts. They also teamed with Jeff Bezos of Amazon to create a health care initiative to lower the cost for the employees of the three large enterprises. The investment also comes as JPMorgan is expected to have a record year in 2019. For the third quarter alone it had a profit of $8.38 billion. Shares have tripled during the past decade, noted the WSJ.
The WSJ noted that Berkshire has more than $100 billion in cash, and with pressure mounting to use the cash, Berkshire repurchased more than $900 million worth of shares during the third quarter.