Warren Buffett's Berkshire Hathaway has scored a $12 billion gain on American Express and Bank of America this year

• Warren Buffett has racked up a $12 billion gain on two stocks this year.
• Berkshire Hathaway has made $4 billion on American Express and $8 billion on Bank of America.
• American Express has leapfrogged Coca-Cola to become Berkshire's third-biggest holding.
• See more stories on Insider's business page.

Warren Buffett's Berkshire Hathaway has scored a $12 billion gain across just two stocks this year, American Express and Bank of America.

The famed investor's conglomerate owned 152 million shares in American Express at the end of 2020, regulatory filings show. The financial-services group's stock has surged by over 20% since then, boosting the value of Berkshire's stake by about $4 billion to $23 billion.

Bank of America's stock price has soared by over 20% this year too, valuing Berkshire's 1 billion shares at almost $40 billion today - an $8 billion gain in under five months.

American Express has now overtaken Coca-Cola as Berkshire's third-biggest holding after Apple and Bank of America, assuming Buffett hasn't tweaked his portfolio in recent weeks.

Berkshire has owned American Express stock for more than 25 years, and hasn't touched the position since 1998. Yet the credit-card company's stock buybacks have boosted Berkshire's ownership from about 11% to nearly 19% over that period. Berkshire spent about $1.3 billion to establish the position, so it has notched a roughly 18-fold gain on its investment to date.

Buffett bet big on Bank on America in 2011, when he handed it $5 billion in exchange for preferred shares and stock warrants. The investor exercised the warrants in 2017, immediately making the lender one of Berkshire's biggest holdings.

Berkshire doubled down on Bank of America last fall, plowing $2.1 billion into the stock over 12 straight trading days - despite dumping shares in JPMorgan, Wells Fargo, and other banks in the same quarter.

Overall, Buffett's company spent $14.6 billion on its Bank of America stake, meaning it has produced a gain of roughly $25 billion or 170%.

The Berkshire chief will undoubtedly welcome a $12 billion increase across two of his signature holdings. However, he might not expect the outperformance to last, given the numerous red flags and warnings from top investors of a looming stock-market crash.