Six out of the top-10 holdings of the renowned investor are in banks, with several of them players in the private banking and wealth sector in the US and wider world.

Financial firms account for more than half (six) of the top-10 businesses measured by the stakes in percentage terms held by Warren Buffett’s Berkshire Hathaway, with American Express top at 18.7 per cent, according to the investment tycoon’s annual shareholders’ letter.

The letter highlights how the methodology of the renowned investor, famed for his value-based approach to picking companies, is a major owner of several top US financial firms, including several that engage in private banking and wealth management. 

Other names in the top-10, ranked by 2019 year-end ownership, are Bank of America (10.7 per cent); Bank of New York Mellon (9 per cent); JP Morgan (1.9 per cent), US Bancorp (9.7 per cent) and Wells Fargo (8.4 per cent). The four other holdings are Apple, Coca-Cola, Delta Airlines and Moody’s.

As far as its 15 largest holdings are concerned, including organizations such as Southwest Airlines and Visa, among others, they had a total market capitalization of $248.027 billion at the end of last year.

Buffett’s letter, which also dwelled on issues such as why companies’ retaining earnings are an important measure, reflects on his own advanced age and that of his right-hand man and vice chairman, Charlie Munger, who has worked at the Omaha-based business since 1978.

The 89-year-old Buffett, and Munger (95) are at an age where they need to plan for succession. Buffett said his two key operating managers, Ajit Jain and Greg Abel, would be given more exposure in the future. 

“Charlie [Munger] and I have very pragmatic reasons for wanting to assure Berkshire’s prosperity in the years following our exit: The Mungers have Berkshire holdings that dwarf any of the family’s other investments, and I have a full 99 per cent of my net worth lodged in Berkshire stock. I have never sold any shares and have no plans to do so,” he said.

“My only disposal of Berkshire shares, aside from charitable donations and minor personal gifts, took place in 1980, when I, along with other Berkshire stockholders who elected to participate, exchanged some of our Berkshire shares for the shares of an Illinois bank that Berkshire had purchased in 1969 and that, in 1980, needed to be offloaded because of changes in the bank holding company law,” Buffett added.

The investor co-founded The Giving Pledge three years ago with Microsoft founder and philanthropist Bill Gates. Ultra-high net worth individuals involved in the group pledge to give at least half of their wealth to various causes.