Warren Buffett has given up his long-held conviction against buying gold — and he’s meanwhile getting out of Goldman Sachs. The totemic tycoon revealed in filings late last week that he has scooped up more than 20 million shares of mining giant Barrick Gold Corp. even as he unloaded nearly all of his nearly 2 …
Warren Buffett has given up his long-held conviction against buying gold — and he’s meanwhile getting out of Goldman Sachs.
The totemic tycoon revealed in filings late last week that he has scooped up more than 20 million shares of mining giant Barrick Gold Corp. even as he unloaded nearly all of his nearly 2 million shares in Goldman Sachs.
The 89-year-old investing icon’s sudden embrace of the precious yellow metal — which has has previously derided as “useless,” saying that “anyone watching from Mars would be scratching their head” at the idea of investing in it — took many on Wall Street by surprise.
But it’s what the Oracle of Omaha did with his other bank stocks that have top analysts talking. In addition to dumping Goldman, Buffett cut his position in JPMorgan Chase by more than 61 percent and sold off more than a quarter of his remaining stake in Wells Fargo.
At the same time, Buffett didn’t touch his 245 million shares in Bank of America, which he has lately beefed up in stock purchases that have left him holding roughly 12 percent of the company.
“Bank of America is a franchise that can be held for the next 100 years,” Wells Fargo analyst Mike Mayo told The Post. “Goldman is in the middle of a revamping from Wall Street to Main Street, and the jury on that will remain out for a while.”
Mayo was referring to Goldman CEO and part-time DJ David Solomon’s plan to reorganize the megabank to focus less on trading, and more on investment banking and its nascent commercial lending business. That revamp, however, has been hampered by the 1MDB bribery scandal in Malaysia. Goldman’s stock is down over 12 percent this year.
Bank of America chief Brian Moynihan, meanwhile, has been a winner in the pandemic, as BofA saw deposits grow by roughly $135 billion in the second quarter alone, which appeals to a long-term investor like Buffett.
“One CEO is grinding out deposit growth while the other is grinding out tunes as a DJ, and also rethinking his entire firm,” quipped Mayo, comparing the perceptions of the two CEOs.
But even Mayo was left a little adrift by Buffett’s decision to cut his JPMorgan Chase stake by almost two-thirds. If Buffett is a fan of Moynihan’s work, he should be even more excited by what JPMorgan CEO Jamie Dimon is doing at the nation’s largest lender.
“JPMorgan has deeper and wider moats around its businesses than even Bank of America,” mused Mayo. “That’s a head scratcher.”