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What Did Buffett Buy: American Express or Wells Fargo?

by: Todd Sullivan August 25, 2008 | about stocks: AXP / BRK.A / WFC    
Todd Sullivan

Todd Sullivan

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After Buffett teased the investing world Friday saying he bought more of either Wells Fargo (WFC) or American Express (AXP), folks are speculating as to which one he bought. I was under the impression Buffett and Bekshire (BRK.a) had virtually tapped out their ability to buy more American Express shares.

After buying 13% of the outstanding total, in 1995 Buffett agreed to the following in a letter to the Chairman Harvey Golub. The letter said Berkshire would not:

(1) acquire or retain shares that would cause its ownership of
American Express** voting securities to equal or exceed 15% of the amount outstanding (if at such time Berkshire Hathaway has a representative on the Board of Directors of American Express as allowed by section 4 hereof), or otherwise acquire or retain shares that reflect ownership or more than 17% of the amount outstanding; _provided_ that for the purposes of this commitment shares held by officers or directors of Berkshire Hathaway shall be aggregated with shares held by Berkshire Hathaway;

Now, Berkshire does not currently have board representation on Amex (unless I missed a recent change) so if Buffett bought more, it would only be less than 2% of the total outstanding in order to comply with the agreement. I do not think that this agreement has been altered or changed, it may have been but I do not see where. If anyone knows where it as, please let me know.

We know Buffett bought more Wells Fargo this spring at prices higher than current ones saying he saw value at those prices. If he thinks there is value there, he must logically see more now.

Of course Amex shares did plunge earlier this summer, presenting a great buying opportunity, it is just that there isn't much more buying Warren can do under the agreement.

We'll find out in short order what he added, my bet is more Wells Fargo.

Disclosure: Long WFC

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This article has 20 comments:

  •  
    Aug 25 09:24 AM
    He already told it was AXP,what are you talking about????
    Reply
  •  
    Aug 25 09:25 AM
    Logical explanation to me
    Reply
  •  
    Aug 25 10:34 AM
    235322: Where and when did he say it was AXP. Answer is, he did not. But I'd like to hear where you think you heard it.
    Reply
  •  
    Aug 25 10:37 AM
    He laughed when was asked if it was AXP moving the head!
    Reply
  •  
    Aug 25 01:24 PM
    So... laughing = acknowledgment?

    It's gonna take more than that to convince skeptics.
    Reply
  •  
    Aug 25 02:36 PM
    Why do you care what he says? If you think he is a great investor, and most do, you just have to shut up and buy Berkshire stock.
    Reply
  •  
    Aug 25 06:43 PM
    In fact i was right,analyst on Cnbc just told Buffet bought more Axp shares!Lol
    Reply
  •  
    Aug 25 09:33 PM
    I saw that interview twice and he made no acknowledge of AXP-not sure what you were looking at but you can probably find it on youtube
    Reply
  •  
    Aug 26 02:22 AM
    It was not during that unterview!!!It was after,when was asked to him about it!Lol!Ok,let's agree with you,Mr. Buffet bought more Wfc shares!Now i hope you are happy and Wfc will go up to the moon!!!Not!!!!!!!!!!Wf... will go down like a stone!
    Reply
  •  
    Aug 26 09:01 AM
    Finally we got to know Buffett added AXP!!!!!!So who is the liar here??????????
    Reply
  •  
    Aug 26 10:22 AM
    Children it's nap time.
    Reply
  •  
    Aug 26 11:11 AM
    Agreed with Derwent. Well said!
    Reply
  •  
    Aug 26 02:20 PM
    Both have serious troubles. AXP credit card debt is the next shoe to fall. WFC, oh those lousy loans.
    Reply
  •  
    Aug 26 07:32 PM
    Buy silly putty. It's funnier.
    Reply
  •  
    Aug 27 06:36 AM
    So, split your investment funds into both.
    Reply
  •  
    Aug 27 02:40 PM
    I say this as a Berkshire holder for over 10 years: WHO CARES. Do your own homework and pick either AXP or WFC or pick something different altogether. Warren would never follow someone blindly and neither should any other investor.
    Reply
  •  
    Aug 27 09:49 PM
    WELLS FARGO - I bet 100% on it.
    Reply
  •  
    Aug 27 11:08 PM
    Emerald, nice slam. (and appropriate)
    Reply
  •  
    Sep 01 09:50 AM
    Hey Todd:
    Can I get your permission to post this article on my website? Thanks. Here is the link if you want to check it out before giving me your permission.
    www.lanaslines.com/com...
    Reply
  •  
    Sep 04 08:41 AM
    Who is Warren Buffett?
    Reply
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