REUTERS/Rick Wilking
- Warren Buffett likely took a $5 billion hit on just five stocks during Monday's market sell-off.
- His stakes in Apple, Bank of America, American Express, Coca-Cola, and Kraft Heinz fell in value.
- Buffett's Berkshire Hathaway has made over $150 billion on those five investments.
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Warren Buffett likely took a $5 billion hit across only five stocks on Monday, as investors dumped equities in response to the news that Chinese real estate developer Evergrande could default on up to $300 billion of debt.
Buffett's Berkshire Hathaway saw $2.8 billion wiped off the value of its Apple stake, as the iPhone maker's stock price slid 2% on Monday. The market downturn cut Bank of America's stock price by 3%, erasing $1.3 billion from Berkshire's position in the lender. Berkshire's American Express, Coca-Cola, and Kraft Heinz stakes also dropped in value by a combined $800 million.
Those declines are based on Berkshire's positions at the end of June, when the company last disclosed the contents of its stock portfolio. Assuming Buffett hasn't touched those five holdings since then, Berkshire suffered a combined $4.9 billion blow to their total value on Monday. However, that decline won't be realized unless Berkshire sells the shares.
Buffett won't be too concerned about the recent market action, as he's made a fortune on his five biggest positions. Berkshire's unrealized gain on Apple is over $90 billion, and over $20 billion for each of Bank of America, American Express, and Coca-Cola. Buffett has admitted overpaying for his Kraft Heinz stake, but even that investment is worth about $2 billion more than what he paid for it.
Buffett famously concentrates his money in a few choice stocks instead of spreading it across hundreds of positions. As an example, Apple has accounted for over 40% of his portfolio's total value in recent months, while Berkshire's top five positions have made up around 75% of it. The investor's strategy supercharges his returns when his bets pay off, but also exposes his portfolio to sharp declines, as shown on Monday.