Updated Mar 15, 2020
Warren Buffett is consistently one of the wealthiest people in the world, coming in with a net worth of $80.8 billion in Oct. 2019. This makes him the third-richest person in the world. Buffett keeps his net worth predominantly in Berkshire Hathaway and Berkshire Hathaway stock, the investment company he founded. Berkshire Hathaway acts as his investment vehicle and invests in such things as equities, real estate, and renewable energy.
However, Buffett came from modest beginnings, which has shaped the way he views money management. He was born in Omaha, Nebraska, in 1930, and the town has been his home ever since. Working as an investment salesman, he had a knack for investing and eventually built Berkshire Hathaway into the company it is today. He still lives in the home he purchased in 1958 for $31,500.
KEY TAKEAWAYS
- Billionaire Warren Buffett's wealth is held almost entirely in his Berkshire Hathaway investment portfolio.
- Berkshire Hathaway is a holding company comprised of a multitude of companies and subsidiaries, including GEICO Insurance, Duracell Batteries, and See's Candies.
- Berkshire Hathaway's investment portfolio includes such well-known companies as Apple Inc., Bank of America, and Coca-Cola Company.
- Buffett's value approach to investing has enabled him to grow Berkshire Hathaway's share price exponentially over the decades.
- In 2006, Buffett pledged to give away over 99% of his wealth to charitable causes.
Berkshire Hathaway
The majority of Warren Buffett’s wealth is tied up in Berkshire Hathaway’s investment portfolio. Reports from 2004 through 2019 show Buffett’s stock stake as high as 350,000 Class A shares of Berkshire Hathaway and 2,050,640 Class B shares. In recent years Buffett has been gifting a considerable amount of his shares to charity. His most recent 13-D filings show his stake in class A shares at 259,394 shares and his class B shares at 65,129. As of March 13, 2020, BRK.A traded at $289,000 and BRK.B traded at $196.40.
Buffett's net worth was a mere $1 million when he was 30, consisting largely of Berkshire Hathaway stock. Through smart institutional investments, he increased the company's stock from $7.60 in the 1960s to today's level. This exponential increase in share price is the main driver of Buffett's increase in net worth over the past decades.
Equity Portfolio
In addition to acting as chairman and chief executive officer (CEO) of Berkshire Hathaway and being one of its largest shareholders, Buffett uses the company as his main investment vehicle, conducting many of his equity sales and purchases as business transactions. This portfolio makes up the lion's share of his equity investments.
The investor is well-known for his income and value approaches to investing, and his portfolio reflects his ideology. As of Dec. 31, 2019, the Berkshire Hathaway portfolio had a value of approximately $194.91 billion. The portfolio’s greatest weights were in Apple (AAPL), Bank of America Corp (BAC), and Coca-Cola Company (KO). Combined, these three companies totaled 56% of the equity holdings.
As a percentage of equity investments, Berkshire Hathaway is most heavily invested in the financial sector at 38%, followed by 26% in technology, and 15% in consumer defensive. Other sectors in the portfolio include industrials, consumer cyclical, health care, energy, communication services, basic materials, and real estate.
Financial Sector
As of Dec. 31, 2019, Berkshire Hathaway’s portfolio is substantially in the financial sector at 38%. Berkshire has 14 financial holdings at the following portfolio weights:
| BERKSHIRE HATHAWAY FINANCIAL SECTOR HOLDINGS | |
|---|---|
| Bank of America Corp | 11.4% |
| American Express Company | 7.7% |
| Wells Fargo & Co | 5.1% |
| JPMorgan Chase & Co | 3.2% |
| Moody's Corporation | 2.7% |
| U.S. Bancorp | 2.5% |
| Bank of New York Mellon Corp | 1.4% |
| Goldman Sachs Group Inc | 1.1% |
| Visa Inc | 0.97% |
| Mastercard Inc | 0.67% |
| PNC Financial Services Group | 0.48% |
| M&T Bank Corporation | 0.31% |
| Synchrony Financial | 0.26% |
| Globe Life | 0.23% |
Subsidiary Companies
In addition to equities, Berkshire Hathaway is also well known as a holding company. The company has 65 subsidiaries with a focus on insurance and real estate. Some of its subsidiaries include GEICO Auto Insurance, Clayton Homes, and See's Candies.