Hello there! Ever wondered about the inner workings of one of the world's most successful investment powerhouses, Berkshire Hathaway, and its long-standing relationship with a financial titan like American Express? You're in for a detailed exploration!
Step 1: Unveiling the Berkshire-Amex Connection
Let's dive right into the heart of the matter: how much of American Express does Berkshire Hathaway own? As of the latest available filings (March 31, 2025), Berkshire Hathaway owns 151,610,700 shares of American Express Company (AXP). This stake is valued at approximately $40.79 billion, making it a significant portion of Berkshire's overall equity portfolio. In fact, it constitutes close to 17% of Warren Buffett's portfolio, and Berkshire Hathaway holds roughly 21.64% of the outstanding American Express stock. This isn't just a casual investment; it's a cornerstone of Berkshire's holdings.
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| How Much Of American Express Does Berkshire Own |
Step 2: A Look Back - The Genesis of a Long-Term Investment
To truly appreciate the current ownership, we need to understand its origins. This isn't a recent acquisition; it's a testament to Warren Buffett's enduring investment philosophy.
The "Salad Oil Scandal" and Buffett's Bold Move
The story begins in 1964, when American Express faced a major financial crisis known as the "Salad Oil Scandal." A subsidiary of American Express, American Express Field Warehousing, had issued receipts for massive amounts of salad oil that turned out to be largely nonexistent. This scandal rocked the company, leading to a significant loss of confidence and a sharp decline in its stock price.
While others panicked, Warren Buffett saw an opportunity. He conducted his own due diligence, visiting merchants and American Express cardholders to gauge the brand's resilience. What he found was an incredibly strong brand loyalty and a fundamental business model that remained robust despite the temporary setback.
Building the Position
Tip: Keep your attention on the main thread.
Buffett, through Berkshire Hathaway, began building his initial position in American Express in 1991, continuing purchases through 1999. It was a classic "be greedy when others are fearful" moment. He saw the underlying value and the enduring "moat" that American Express possessed. Over the decades, without significant additional share purchases, Berkshire Hathaway's stake in American Express grew from nearly 10% to its current impressive percentage, largely due to American Express's own share repurchases, which reduced the total number of outstanding shares.
Step 3: Understanding Buffett's Investment Philosophy Behind Amex
Why has American Express been such a long-standing and significant holding for Berkshire Hathaway? It perfectly aligns with Warren Buffett's core investment principles.
A. Focus on "Economic Moats"
Buffett is famous for seeking companies with "economic moats" – sustainable competitive advantages that protect their long-term profits and market share. American Express possesses several:
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Strong Brand Recognition and Prestige: American Express has cultivated a premium brand image, appealing to affluent customers and businesses who value its perceived prestige, exclusive perks, and superior customer service. This allows them to charge higher fees.
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Closed-Loop Network: Unlike Visa and Mastercard, which primarily operate as payment networks, American Express operates a "closed-loop" network. This means they are both the card issuer and the payment processor, giving them greater control over the customer experience and allowing them to capture revenue from both cardholders (through annual fees and interest) and merchants (through transaction fees).
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Loyal Customer Base: American Express's focus on high-income clients and its robust rewards programs lead to high customer retention and significant lifetime value.
B. Consistent Earnings and Capital Returns
Buffett favors companies that consistently generate strong earnings and return capital to shareholders. American Express has demonstrated consistent profitability and has a history of share buybacks and dividends, which further enhances shareholder value. Over the last decade, American Express has reduced its shares outstanding by approximately 30% through buybacks.
C. Management and Simplicity
QuickTip: Keep going — the next point may connect.
Buffett prefers businesses that are easy to understand and have competent, shareholder-oriented management. American Express, despite its global reach, operates a relatively straightforward business model in the financial services sector, which falls within Buffett's "circle of competence."
Step 4: Current Standing and Significance in Berkshire's Portfolio
As of recent data (Q1 2025), American Express remains one of Berkshire Hathaway's top holdings. While Apple is currently the largest, American Express consistently ranks among the top two or three, alongside Bank of America and Coca-Cola.
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Value: Its value of over $40 billion makes it a significant contributor to Berkshire's overall market value.
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Portfolio Diversification (within financial services): While Berkshire holds other financial stocks like Bank of America, American Express offers a unique exposure to the premium credit card and payment processing segment.
This long-term, substantial investment underscores Buffett's conviction in American Express's enduring business model and its ability to adapt and thrive in a dynamic market.
10 Related FAQ Questions
How to calculate Berkshire Hathaway's percentage ownership in American Express?
To calculate the percentage ownership, you would divide the number of American Express shares held by Berkshire Hathaway by the total outstanding shares of American Express, then multiply by 100. For example, if Berkshire owns 151.61 million shares and American Express has 700.59 million shares outstanding, Berkshire's ownership is approximately (151.61 / 700.59) * 100 = ~21.64%.
How to find Berkshire Hathaway's latest holdings in American Express?
QuickTip: Focus on what feels most relevant.
You can find Berkshire Hathaway's latest holdings in American Express by looking up their 13F filings with the Securities and Exchange Commission (SEC). These filings are typically released within 45 days after the end of each quarter. Financial news websites and investment data platforms also aggregate this information.
How to invest in American Express stock?
To invest in American Express stock (AXP), you can open a brokerage account with a reputable online broker. Once your account is funded, you can place an order to buy AXP shares. You can buy individual shares or consider investing in exchange-traded funds (ETFs) or mutual funds that include AXP in their portfolio.
How to understand Warren Buffett's investment strategy?
Warren Buffett's investment strategy is primarily focused on value investing. He looks for companies with strong competitive advantages (moats), consistent earnings, good management, and that are trading at a reasonable price relative to their intrinsic value. He emphasizes long-term holding and investing in businesses he understands.
How to track the historical performance of American Express shares?
You can track the historical performance of American Express shares by using financial websites like Yahoo Finance, Google Finance, or Bloomberg. These platforms provide historical stock prices, charts, and key financial data.
How to interpret Berkshire Hathaway's 13F filings?
Tip: Look out for transitions like ‘however’ or ‘but’.
Berkshire Hathaway's 13F filings list their equity holdings at the end of each quarter. These filings show the number of shares held for each stock and their market value. They are a valuable resource for understanding Buffett's and Berkshire's investment decisions.
How to identify companies with "economic moats" like American Express?
Identifying companies with "economic moats" involves looking for sustainable competitive advantages such as strong brands, network effects, high switching costs for customers, cost advantages, or proprietary technology. Analyzing financial statements for consistent profitability and high returns on capital can also indicate a moat.
How to differentiate American Express from Visa and Mastercard?
The primary difference is that American Express operates a closed-loop network, acting as both the card issuer and payment processor. Visa and Mastercard, on the other hand, typically operate as open-loop networks, primarily facilitating transactions between banks (issuers) and merchants (acquirers), with banks issuing their branded cards.
How to assess the long-term prospects of a company like American Express?
Assessing long-term prospects involves analyzing factors like the company's market position, competitive landscape, growth opportunities (e.g., new customer segments, international expansion), technological innovation, and its ability to adapt to changing consumer preferences and economic conditions.
How to learn more about Warren Buffett's investments?
To learn more about Warren Buffett's investments, you can read his annual letters to Berkshire Hathaway shareholders, which offer invaluable insights into his thinking. There are also numerous books, documentaries, and academic studies dedicated to his investment philosophy and specific holdings.
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