Warren Buffett likely took a $6 billion hit on just 4 stocks during Monday’s painful sell-off

warren buffett
Warren Buffett.

  • Warren Buffett probably took a $6-billion hit on four stocks during Monday’s sell-off.
  • The investor’s Apple, Bank of America, Coca-Cola, and American Express stakes fell in value.
  • Buffett’s Berkshire Hathaway has made over $150 billion in total gains on those positions.
  • See more stories on Insider’s business page.

Warren Buffett likely suffered a $6 billion blow to his stock portfolio on Monday, as four of his biggest holdings slumped in value during the painful market sell-off.

The investor’s Berkshire Hathaway conglomerate counts Apple, Bank of America, American Express, and Coca-Cola among its largest positions. Those four stocks fell between 1% and 4% on Monday, wiping about $5.9 billion off the combined value of Buffett’s stakes in those companies.

Berkshire boasted 887 million Apple shares at the last count. Assuming he hasn’t touched that holding, it slid in value by $3.5 billion on Monday. The conglomerate also took a $1 billion hit on Bank of America, a $2.7 billion hit on Coca-Cola, and a $1.1 billion hit on American Express.

Buffett won’t be too bothered, as he famously focuses on long-term performance, and has already made a fortune on those stocks. For example, Berkshire spent $36 billion to build an Apple stake worth $126 billion today, more than tripling its money on paper.

The investor’s company also spent $1.3 billion for Coca-Cola stock worth $22 billion today – a roughly 17-fold gain. Moreover, its $25 billion stake in American Express has a cost base of $1.3 billion, and it spent about $15 billion to amass a Bank of America position worth $37 billion today.

Overall, Buffett’s total unrealized gains on those four stocks exceed $150 billion – more than the market capitalizations of Starbucks ($136 billion), IBM ($123 billion), or Goldman Sachs ($120 billion).

Buffett concentrates his money in a few key investments instead of spreading it across hundreds of them, boosting his returns when his bets pay off, but also exposing him to sharper declines. Apple has made up 45% of the total value of Berkshire’s stock portfolio in recent weeks, and the conglomerate’s top five holdings have accounted for 75%.

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Kraft Heinz employees say their budget was cut so much they had to bring their own coffee to work and could only spend $5 a year on office supplies

Kraft Heinz logo on a black background, fading to black with cracks leading into food products from Heinz and Kraft brands.
  • Kraft Heinz employees told Insider about the scant resources and high turnover.
  • Cuts backed by private equity firm 3G Capital have forced employees to bring in their own coffee.
  • Subscribe to read Insider’s full story on Kraft Heinz’s corporate culture.
  • See more stories on Insider’s business page.

The merger of Kraft and Heinz brought lots of changes to the food company. But one of the most immediate was to employees’ food options at the company’s Chicago headquarters.

Within a month of the merger closing in 2015, Kraft Heinz also removed fridges that held snacks for company employees. While it provided Keurig machines, the company did not supply the pods.

“You had to make the coffee yourself, and you had to bring in your own Keurig pods from home,” one former employee told Insider.

That was only the beginning of the cuts at Kraft Heinz, the company behind Oscar Mayer hot dogs and Kool-Aid drink mixes.

In the six years since the merger, the food giant has left few stones unturned to save money, raiding budgets for new products, employee travel, and everything in between. One employee who recently left the company said that when she was in the office she was limited to spending $5 a year on pens, notepads, and other office supplies.

Nine current and former employees spoke with Insider. They described a company that has fallen behind many of its peers in the food industry. They also said the deep cuts have caused morale to plummet and turnover to soar. And though Kraft Heinz got a sales lift during the pandemic as many consumers ate more at home, many said they expect the effect to fade as life returns to normal.

You can read our full story if you’re an Insider subscriber: 3G’s merger of Kraft and Heinz is killing morale, causing burnout, and choking innovation, some employees say. Now, the company could get left behind as the economy reopens

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Warren Buffett commands a $270 billion stock portfolio – and 5 holdings make up 75% of its total value

warren buffett
Warren Buffett

  • Warren Buffett has a $270 billion stock portfolio, and five stocks make up 75% of its value.
  • Berkshire Hathaway disclosed $203 billion of Apple, Bank of America, and three other stocks.
  • Buffett concentrated his portfolio last quarter by slashing and exiting several holdings.
  • See more stories on Insider’s business page.

Warren Buffett’s stock portfolio was worth $270 billion at the last count, making it more valuable than Exxon Mobil or Comcast. Around $203 billion, or 75% of that figure, was parked in just five stocks.

The investor’s Berkshire Hathaway conglomerate owned $108 billion of Apple stock as of March 31, regulatory filings show. That single holding accounted for 40% of the total value of its portfolio.

Berkshire’s increased stake in Bank of America was worth $39 billion, or 14% of the portfolio. The next-biggest holding was American Express ($21 billion or 7.9% of the total), followed by Coca-Cola ($21 billion or 7.8%) and Kraft Heinz ($13 billion or 4.8%).

“Wow is that concentrated,” Paul Lountzis, a longtime Berkshire shareholder and the president of Lountzis Asset Management, told Insider. “But that has always been his way.”

Indeed, Buffett has repeatedly trumpeted the power of a concentrated portfolio, and warned investors against spreading their bets too much.

“Diversification is a protection against ignorance,” he said at Berkshire’s annual shareholder meeting in 1996. “It makes very little sense for those who know what they’re doing.”

Buffett added that if someone can analyze and value businesses, it would be “madness” for them to own scores of stocks and put money into their 35th-favorite business instead of their top pick. Diversifying to that extent would most likely hurt their results and increase their risks, he cautioned in his 1993 shareholder letter.

Berkshire’s top five holdings accounted for 74% of its portfolio’s total value at the end of December. That proportion climbed to 75% last quarter after the company slashed its Wells Fargo and Chevron stakes, trimmed its pharmaceutical and financial bets, and exited a couple of positions.

Buffett might concentrate his portfolio even more in the coming months. “He is going back to making very large commitments to stocks he likes the most,” Lountzis told Insider.

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Warren Buffett’s Berkshire Hathaway scores $17 billion gain across 5 stocks as value stages a comeback

warren buffett
Warren Buffett.

  • Warren Buffett has racked up $17 billion in gains across just five stocks this year.
  • Berkshire Hathaway’s Bank of America stake has soared in value by $9 billion.
  • Buffett is up more than $1 billion on Kraft Heinz, GM, and US Bancorp in 2021.
  • See more stories on Insider’s business page.

Warren Buffett is winning big from the flight to value stocks ahead of the global economy reopening this summer. The famed investor’s Berkshire Hathaway conglomerate has notched an astounding $17 billion in gains across only five stocks this year.

Buffett’s company is up $9 billion on Bank of America alone. The banking group’s stock price has surged 30% since the start of January, boosting the value of Berkshire’s enlarged stake from $30 billion to $39 billion.

Moreover, Berkshire has scored a $3.7 billion gain on American Express, as the financial-services group’s stock has jumped 30% this year. It has also made $1.5 billion on Kraft Heinz, $1.4 billion on General Motors, and $1.3 billion on US Bancorp in under three months.

Buffett’s bets on five Japanese trading houses last fall are delivering too. Itochu, Mitsui, Marubeni, Mitsubishi, and Sumitomo shares have gained an average of 26% this year, lifting the combined value of Berkshire’s holdings by $1.6 billion.

Other Berkshire investments are outperforming as well. Chevron, Suncor Energy, and Synchrony Financial have all climbed more than 20% this year, while Wells Fargo – previously one of Berkshire’s biggest holdings – has rallied 37%. Meanwhile, the benchmark S&P 500 index is up 5.8% this year.

However, Berkshire’s gains have been partly offset by the recent exodus from tech stocks. Apple – which makes up more than 40% of Buffett’s US stock portfolio – has slumped 7% this year. The decline has wiped close to $8 billion off the value of Berkshire’s stake.

Berkshire has also taken a hit from Coca-Cola, leaving its shares worth about $900 million less today than at the start of January. The company’s also down about $400 million on both Snowflake and Verizon.

Buffett’s signature approach of sniffing out high-quality, undervalued businesses and investing for the long term is finally paying off. Yet if growth stocks do take off again, his Apple wager will likely flourish. It appears Buffett’s found a way to have his cake and eat it too.

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