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April 2, 2020, 8:05 a.m. EDT

What Did Warren Buffett Buy in Q1 as US Stocks Crashed?

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  • Earlier this year, Warren Buffett, Berkshire Hathaway's chairman, said that the coronavirus wouldn't have a big influence on his investments. However, he said that he might add more shares as stock prices fall.

  • US stock markets crashed in the first quarter. The Dow Jones had its worst first quarter ever, while the S&P 500 had its worst quarter since the fourth quarter of 2008.

Warren Buffett versus the S&P 500

US stock markets crashed in the first quarter. The crash led to the quickest bear market on record. US stock markets breached several dubious records in March. The Dow Jones eventually had the worst first quarter ever. Meanwhile, Berkshire Hathaway wasn't spared in the US stock market crash. Berkshire Hathaway fell 19.2%, which was in line with the fall in the S&P 500. Last year, Warren Buffett said that Berkshire might be able to only modestly outperform the S&P 500 . However, 2019 was the worst year for Buffett in a decade.

What did Warren Buffett buy in Q1?

Several market participants speculate what Warren Buffett bought shares in the first quarter. So far, we only know that Berkshire added more Delta Airlines shares. The exact picture will be revealed next month when Berkshire Hathaway /zigman2/quotes/200060694/composite BRK.B +0.26% files its first-quarter 13F. In February, Buffett did an interview with CNBC. The interview might offer insights into what Buffett could have bought in the first quarter. In the interview, Buffett suggested that he might add more shares of companies that he was already buying. He sounded positive about bank stocks. Warren Buffett said , "I feel very good about the banks we own. They're very attractive compared to most other securities I see."

Berkshire Hathaway's Q4 13F

In the fourth quarter of 2019, Berkshire Hathaway took new stakes in Kroger and Biogen. The company also added RH, General Motors, and Occidental Petroleum shares. Warren Buffett trimmed stakes in banks and sold shares of Wells Fargo and Goldman Sachs. He also sold some Bank of America shares. Kroger stock is in the green this year, while Biogen is trading flat. Meanwhile, Buffett might have added some shares in these companies. Usually, he slowly increases stakes in companies after taking the initial stake.

RH /zigman2/quotes/200286355/composite RH +3.15% , which Buffett only brought in the third quarter of 2019, has fallen almost 60% year-to-date. In my view, Buffett might have added more RH shares in the first quarter. GM stock also fell sharply in the first quarter. Buffett might have taken a look at the company. He might have added airline stocks as well due to the sharp fall in their share prices.

Did Warren Buffett buy banks?

While Warren Buffett sounded positive on bank stocks, he sold bank shares in the fourth quarter. That said, bank stocks fell sharply in the first quarter. Buffett tries to limit his holdings in banks below 10%. Berkshire held an 8.5% stake in U.S. Bancorp and an 8.6% stake in Bank of New York Mellon at the end of the fourth quarter. Meanwhile, Berkshire holds less than 2.0% of J.P. Morgan Chase. Warren Buffett has admired J.P. Morgan and its CEO Jamie Dimon. So far, J.P. Morgan shares have fallen almost 40% in 2020. I think that Warren Buffett might have added more J.P. Morgan shares in the first quarter.

Meanwhile, Bill Ackman of Pershing Square Capital kept his faith in Warren Buffett and added Berkshire Hathaway shares in the first quarter. Read What Are Ackman and Tepper Doing as US Stocks Fall? to learn more.

COMTEX_364117565/2648/2020-04-02T08:05:05

/zigman2/quotes/200060694/composite
US : U.S.: NYSE
$ 185.58
+0.48 +0.26%
Volume: 10.63M
May 29, 2020 4:00p
P/E Ratio
46.46
Dividend Yield
N/A
Market Cap
$450.97 billion
Rev. per Employee
$637,113
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/zigman2/quotes/200286355/composite
RH
US : U.S.: NYSE
$ 216.89
+6.63 +3.15%
Volume: 1.57M
May 29, 2020 4:00p
P/E Ratio
23.79
Dividend Yield
N/A
Market Cap
$4.17 billion
Rev. per Employee
$481,742
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