The banking crisis is costing most S&P 500 investors serious money. Even Warren Buffett is taking his lumps.
Berkshire Hathaway is suffering a $12.6 billion loss on 15 of its worst-performing U.S.-listed stocks this year based on the dollar value of current holdings, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. And the sector giving him trouble now? Financials like Bank of America, Ally Financial, Bank of New York Mellon and U.S. Bancorp.
Buffett's long-standing penchant for financials is costing him now. Six of his 15 worst performers this year, on a dollar amount, are in the financial sector. The market value of banks about the world has plunged more than $500 billion in the past week and a half, says Bespoke Investment Group. And Berkshire Hathaway is a large owner of some of them.
"From March 6th to March 15th, total market cap (of banks) fell 11.4%," Bespoke said. "For that span, only periods during the global financial crisis in 2008, the 2011 debt ceiling chaos, the floating of the Chinese yuan in 2015, and the Covid shock have seen larger drops. In short, this is a historic decline in the market value of banks albeit one that is far from unprecedented."
Bank of America Is Buffett's No. 1 Loser
Buffett's commitment to Bank of America stock is costing him now. How much? More than $4 billion just this year.
The stock, which Berkshire Hathaway has steadily accumulated since 2017, is down 12.8% this year. That's not the biggest percentage drop in Berkshire Hathaway's portfolio of roughly 50 U.S.-listed stocks (that's Liberty SiriusXM). But Bank of America is the costliest loss because Berkshire Hathaway is such a massive owner. The current position's value is down $4.3 billion this year.
Keep in mind that Buffett is now the No. 1 owner of BofA stock. Berkshire Hathaway owns 12.6% of the bank, outranking even ETF giant Vanguard with its 7.6% stake. The only stock Berkshire Hathaway is down nearly as much on as Bank of America, in dollars, is Chevron. Berkshire Hathaway is also the top holder of the oil giant, with an 8.8% stake. Falling oil prices knocked the value of Chevron down 14.1% this year.
Other S&P 500 Financials Hurting Buffett
Other bank holdings are hitting Berkshire Hathaway, too. Berkshire Hathaway still owns nearly 10% of Ally Financial, a bank with a large auto loan business. Shares are down 4.4%, erasing $31 million in value this year.
Berkshire Hathaway, though, has fortuitously lightened its holdings on some banks. Those moves are paying off now. Buffett's holding company now only owns less than 1% of U.S. Bancorp, one of the many dogs it's been unloading. Berkshire Hathaway started selling shares of the bank mid-last-year and dumped nearly all the shares in late 2022. It's a good thing. Shares are down nearly 17% this year, erasing nearly $48 million off Berkshire Hathaway's tiny remaining position.
Similarly, Berkshire Hathaway now only owns 3.1% of Bank of New York Mellon. Berkshire Hathaway has been reducing its position in the bank since 2018. That means it's only down $28.5 million on the position this year on the stock, which is off 2.5% this year. Bank of New York Mellon is known as one of the banks with the highest percentages of uninsured deposits.
Banks aren't easy stocks to hold as this crisis unfolds. "While not superlative, only a few other events have seen larger drops," Bespoke says.
Buffett's Biggest Dollar-Value Losers This Year
Based on Berkshire Hathaway's current positions
| Company | Symbol | Sector | Year-t0-date % ch. | Berkshire loss ($ billions) |
|---|---|---|---|---|
| Bank of America | Financials | -12.8% | $4.3 | |
| Chevron | Energy | -14.1% | 4.2 | |
| Coca-Cola | Consumer Staples | -5.2% | 1.3 | |
| Kraft Heinz | Consumer Staples | -6.3% | 0.8 | |
| Occidental Petroleum | Energy | -6.4% | 0.8 | |
| Liberty SiriusXM | Communication Services | -31.9% | 0.5 | |
| VeriSign | Information Technology | -5.3% | 0.1 | |
| McKesson | Health Care | -9.4% | 0.1 | |
| Globe Life | Financials | -9.9% | 0.07 | |
| U.S. Bancorp | Financials | -16.5% | 0.05 | |
| RH | Consumer Discretionary | -7.5% | 0.05 | |
| Markel | Financials | -5.8% | 0.03 | |
| Ally Financial | Financials | -4.4% | 0.03 | |
| Snowflake | Information Technology | -3.4% | 0.03 | |
| Bank of New York Mellon | Financials | -2.5% | 0.03 |
Sources: IBD, S&P Global Market Intelligence based on current holdings
Follow Matt Krantz on Twitter @mattkrantz
