Warren Buffett’s Berkshire Made $12 Billion Bet on Trump’s Stocks Rally

Buffett was skeptical of some of Trump's claims about how fast he can grow the economy.

After Donald Trump’s unexpected win in the U.S. presidential election, one of Hillary Clinton’s biggest billionaire supporters bought $12 billion of stock in his company. Warren Buffett revealed in an interview with talk show host Charlie Roseth that he added large investments to his stock portfolio at Berkshire Hathaway to capitalise on the “Trump rally”.

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The stocks market’s rally should have helped make Buffett even wealthier. Investors have been betting that Trump will seek to cut back on regulation of banks and other industries and also spend more to repair highways, bridges and other parts of the nation’s infrastructure.

An earlier regulatory filing disclosed that Berkshire Hathaway bought $5.2 billion and sold or redeemed roughly $20 billion worth of stocks in the first nine months of 2016. In the year earlier, Berkshire bought about $10 billion of equity securities.

“We’ve, net, bought $12 billion of common stocks since the election,” Buffett said. “The guys that work with me, the two fellows, they probably bought a little bit or sold a little bit too,” said Buffett without disclosing the securities he bought.

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Meanwhile, Buffett was skeptical of some of Trump’s claims about how fast he can grow the economy. He said nobody can grow the economy 4% in real terms over time. But Buffett thinks that even 2% annual growth over a period of a few years will lead to wage growth and gains in the stock market.

“That’s pretty high. Two percent will produce miracles,” Buffett said, referring to the Trump campaign promise.

Speaking of stocks, Buffett said he was not surprised to see the market rally after Trump won. He thought concerns the market would tank due to Trump were silly.

Buffett demurred on whether Berkshire has added to its stakes in the U.S. airlines. Back in November, Berkshire disclosed that it bought shares in the four biggest U.S. airlines: American Airlines Group Inc, Delta Air Lines Inc, Southwest Airlines Co and United Continental Holdings Inc.

Earlier this month, people familiar with billionaire George Soros’ trading told the Wall Street Journal that he lost nearly $1 billion as a result of the stock-market rally, while the 85 year-old investor doubled his bets that stocks would fall. However, because of his generally bearish outlook on world markets, the legendary hedge fund manager did profit from other investments in different sectors, both financial and industrial.

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