The World Still Needs Goldman Sachs, Even If Warren Buffett Doesn’t

The World Still Needs Goldman Sachs, Even If Warren Buffett Doesn’t

Warren Buffett, until last year a devoted shareholder of big US banks, has moved on to their challengers. Does that spell the end of his faith in the traditional financial sector?

This week, Berkshire Hathaway Inc. poured $500 million into Brazil's Nubank “” the fintech company's largest single investment “” giving it a valuation of $30 billion. Nubank is one of the world's biggest so-called neobanks, or all-digital lenders, with 40 million users in Latin America.

For decades, financial institutions were Buffett's bread and butter, with stakes in lenders, insurers and credit-card companies. That changed last year, when Berkshire dumped 84% of its holdings in Goldman Sachs Group Inc., initially picked up during the global financial crisis, and pared its stakes in Wells Fargo & Co. and JPMorgan Chase & Co. Berkshire's investment portfolio 1 had just over 23.6% of its fair value concentrated in financial firms, including banks, at the end of 2020, down from 41% in 2019.

Berkshire watchers were shocked and worried as they tried to decipher Buffett's moves. He compared the coronavirus crisis to 2008, noting there were a lot of unknowns given large swathes of society were shut down.

Now it's worth asking whether Buffett is going a step