It might feel like no one’s making money in the S&P 500. But there’s a raging bull market — and five investors including Warren Buffett have found it.
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Buffett and four other big investors are the top holders of the 10 S&P 500 companies that generated more stock market wealth this year than any others. They own big stakes in 10 companies, like Exxon Mobil (XOM), Berkshire Hathaway (BRKA) and Bank of America (BAC), which together minted more than $322 billion in wealth this year as the rest of the market falls, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
And talk about a streak. Buffett and his Berkshire Hathaway own the largest stakes in three of the top 10 money-makers in the S&P 500 this year so far.
These investors, including Vanguard, BlackRock, Capital Research and BMO Global, show you can find opportunities, just not in places you might expect. “Wall Street has an inflation hangover as higher rates continue to drag tech stocks down,” said Edward Moya, market analyst at Oanda. “Stock traders quickly hit the sell button.'”
‘Nobody Is Making Money’ In The S&P 500?
Making hundreds of billions of dollars in this S&P 500 is quite a feat. All four FANG tech stocks are down this year. Smaller stocks are crashing. And crypto trades aren’t working either.
All told, more than two-thirds of the companies in the S&P 500 are down this year. And many by large amounts. The average decline of stocks in the S&P 500 is more than 11%. And the S&P 500 itself is off more than 7%.
That means investors are now down more than $4 trillion in the past three months, says Wilshire Associates. But some investors, like Buffett, are side-stepping the pain.
Revenge Of Buffett Vs. S&P 500
Just a year ago, it was looking like speculative investors like Cathie Wood would run circles around Buffett. Now the tables are turned.
Shares of Buffett’s Berkshire Hathaway are up more than 6% this year. And that rise boosted the market value of the holding company by more than $44 billion. Buffett’s 16% stake in the company alone climbed nearly $7 billion.
Why? Buffett’s lean toward S&P 500 value stocks is paying off. His Berkshire Hathaway is still the No. 1 holder of shares of Bank of America (BAC) with a 12.5% stake. Shares of BofA are up nearly 8% this year, adding more than $23 billion in market value. And that’s put more than $3.4 billion in wealth just in Berkshire’s portfolio.
Buffett’s hot hand goes beyond just Berkshire Hathaway and BofA this year. His giant 20% position in American Express makes Berkshire Hathaway the largest owner of that financial company. And it’s paying off now. American Express shares are up more than 17% this year. That adds more than $19 billion in market value. Berkshire’s shares claim $4.3 billion of that.
Want To Make Money? Skip ESG
If you’re looking to make money as the S&P 500 sinks, think oil and tobacco. Right now, big dividend yields are trumping worries about clean energy or societal benefits.
A few investors are profiting from this anti-ESG movement.
Activist investors are challenging Exxon Mobil’s carbon future. But Vanguard, for now, is gaining big time on its No. 1 8.3% stake in the energy giant. Shares are up nearly 32% this year. The price of oil is spiking, most recently due to threats of war in Ukraine. Exxon Mobil’s value vaulted up more than $80 billion this year. That’s a larger jump than any S&P 500 company. And of that, $6.7 billion flowed into the pockets of Vanguard investors. And that doesn’t even include Exxon’s giant 8% dividend yield.
Meanwhile, Capital Research, home of American Funds, is scoring on both energy and tobacco. Capital holds a massive 14% stake in Philip Morris (PM). And that’s paying off nicely this year. Shares of Philip Morris are up more than 13% this year, and they pay a nearly 5% dividend yield on top of that. Investors scored nearly $20 billion just this year on Philip Morris. And of that, nearly $3 billion wafted into Capital’s portfolios.
Similarly, Capital owns a mega 16% position in EOG Resources (EOG). That energy stock is up nearly 30% this year, adding more than $15 billion into investors’ portfolios.
Making money is tough in this market. And it’s important to buy at the right times. But if you look hard enough, you can still find opportunity.
Top S&P 500 Market Value Gainers
All are up big this year, while the S&P 500 sinks more than 7%
| Company | Symbol | Stock YTD % ch. | Gain in market value this year ($ billions) | Sector | Top investor | % owned |
|---|---|---|---|---|---|---|
| Exxon Mobil | (XOM) | 31.1% | $80.9 | Energy | Vanguard | 8.33% |
| Berkshire Hathaway | (BRKA) | 6.4% | $44.8 | Financials | Warren Buffett | 16.02 |
| Chevron | (CVX) | 18.3% | $41.4 | Energy | Vanguard | 8.39 |
| Wells Fargo | (WFC) | 21.5% | $35.3 | Financials | Vanguard | 8.56 |
| ConocoPhillips | (COP) | 29.6% | $26.6 | Energy | BlackRock | 8.53 |
| Bank of America | (BAC) | 7.7% | $23.0 | Financials | Berkshire Hathaway | 12.5 |
| Philip Morris International | (PM) | 13.6% | $20.2 | Consumer Staples | Capital Research | 13.95 |
| American Express | (AXP) | 17.2% | $19.3 | Financials | Berkshire Hathaway | 19.92 |
| EOG Resources | (EOG) | 31.4% | $16.3 | Energy | Capital Research | 15.69 |
| Visa | (V) | 3.7% | $14.4 | Information Technology | Vanguard | 6.87 |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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Source: https://www.investors.com/etfs-and-funds/sectors/sp500-investors-like-warren-buffett-show-ways-to-gain-in-this-market/?src=A00220&yptr=yahoo