Bank Stocks, Once a Buffett Favorite, Take a Back Seat at Berkshire Hathaway Amid Recession Worries

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While the pandemic is finally receding in the U.S., Buffett hasn’t given the all-clear signal on banks. Why is that?

"They're very good investments at sensible prices, based on my thinking, and they're cheaper than other businesses that are also good businesses by some margin," he said.-led JPMorgan, telling Quick that he was"dumb" for not buying shares earlier.After the onset of the coronavirus pandemic in early 2020, however, lenders began setting aside tens of billions of dollars for an expected deluge of loan defaults.

Actions by the Federal Reserve to flood the country with money and support markets averted the worst financial impacts of pandemic-induced lockdowns, and the surge of defaults the industry had expected didn't arrive. His remaining roster of financials — including a massive $40 billion-plus position in Bank of America and a far smaller holding in— show that Buffett wants to focus on basic U.S. retail and business banking as a safer place to park his money.

 

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