Tuesday, November 17, 2009

Berkshire Hathaway 3rd Quarter 2009 13F-HR

In yesterday's Berkshire Hathaway 13F-HR filing some meaningful changes to the $ 61 billion equity portfolio were disclosed:

- Nearly doubled exposure to Wal-Mart
Value of Holding = ~$ 2 billion (9th largest holding)

- Continued to add to Wells Fargo investment
Value of Holding = ~$ 8.8 billion (2nd largest holding in the portfolio after Coca-Cola.)

- Established new position in Exxon Mobil
Value of Holding = ~$ 100 million (Within the context of a $ 61 billion portfolio...pretty small.)

- Established new position in Nestle
Value of Holding = ~$ 161 million (Again...relatively small.)
Buffett now has exposure to every major global confectionary company except Hershey. His investments in this area include: Mars-Wrigley, Kraft-Cadbury (assuming the deal happens), and Nestle. Guess he likes the chocolate and gum biz.

- Established small new position in Republic Services
Value of Holding = ~$ 101 million

- Continued to reduce exposure to ConocoPhillips
Value of Holding = ~$ 3.1 billion (Still the 7th largest holding. Though a position in Exxon was established...ConocoPhillips remains a 30x bigger investment.)

It will be interesting to see how this changes in the coming quarters. So far approximately 1/3 of the shares in ConocoPhillips have been trimmed since the beginning of the year. Buffett announced earlier this year they would be selling a portion of the ConocoPhillips shares at a loss for tax reasons as explained in this news release.

We sold 13.7 million shares of ConocoPhillips during the first quarter and additional shares were sold subsequent to the end of the quarter. Although we expect the market price of ConocoPhillips to increase over time to levels that exceed our original cost, we are likely to sell some additional shares prior to that time and generate additional capital losses that we can carry back to prior tax years when we generated net capital gains. - Berkshire Hathaway News Release

- Reduced exposure to Moody's
Value of Holding = ~$ 900 million (still a medium size position but it appears Buffett is committed to steadily reducing exposure to Moody's.)

There are several other minor changes to the portfolio including: establishing a very small new position in Travelers, completely selling out of small positions in Eaton and Wabco, selling almost all shares of Ingersoll-Rand, and a small reduction in exposure to Suntrust.

Adam

Long positions in Berkshire Hathaway, Wells Fargo, and Moody's.

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