Warren Buffett’s Berkshire Hathaway has notched a $9 billion gain on American Express this year – and made $26 billion on the stock overall

Warren buffett
Warren Buffett. Bill Pugliano/Getty
  • Warren Buffett’s Berkshire Hathaway has made about $US9 ($AU12) billion on American Express this year.
  • The investor’s company has racked up a total unrealized gain of $US26 ($AU35) billion on the stock.
  • Berkshire owns 19% of American Express and hasn’t touched its stake since 1998.

Warren Buffett’s Berkshire Hathaway has made almost $US9 ($AU12) billion on American Express this year, lifting its total unrealized gain on the stock to about $US26 ($AU35) billion.

The famed investor’s conglomerate owned 152 million shares of the credit-card company at the last count, a position worth $US27 ($AU36) billion as of Tuesday’s close. Buffett and his team only spent $US1.3 ($AU2) billion on the holding, so they’ve made about 20 times their money on paper, excluding dividends.

American Express stock closed at $US177 ($AU237) on Tuesday, just shy of its record intraday high of $US180 ($AU241) in July. It has surged by 50% this year as the US economy has rebounded from the pandemic, and the risk of a wave of loan defaults has faded. The stock’s ascent has increased the value of Berkshire’s stake by $US8.6 ($AU11) billion this year.

Berkshire has been an American Express shareholder for more than 25 years, and hasn’t touched its current position since 1998. Yet its stake has ballooned from 11% to over 19% in that period, thanks to the lender’s share buybacks.

Buffett is a longtime fan of American Express, and has repeatedly underlined the value of its brand and customer relationships. He plowed 40% of his investment partnership’s capital into the business in the mid-1960s, after its stock price halved following the Salad Oil scandal. He also described it as a “one-of-a-kind” company in his 1980 letter to shareholders.

American Express is the third-largest holding in Berkshire’s US stock portfolio, after Apple and Bank of America. Those two stocks have climbed 15% and 55% each this year, boosting Berkshire’s unrealized gains on them to $US100 ($AU134) billion and $US33 ($AU44) billion respectively, based on the cost bases detailed in its latest annual report.