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.
This site does not provide investing recommendations as that comes down to individual circumstances. Instead, it is for generalized informational, educational, and entertainment purposes. Visitors should always do their own research and consult, as needed, with a financial adviser that's familiar with the individual circumstances before making any investment decisions. Bottom line: The opinions found here should never be considered specific individualized investment advice and never a recommendation to buy or sell anything.
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Applying Newton's Fourth Law
Origin of Newton's 4th Law?
"Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac's talents didn't extend to investing: He lost a bundle in the South Sea Bubble, explaining later, 'I can calculate the movement of the stars, but not the madness of men.' If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases." - Warren Buffett
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Find good businesses; buy at nice discounts to value; stay within limits & stick to what's understandable (necessarily unique for each investor); minimize trading, frictional costs, & errors of all kinds.
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This site's emphasis? Put simply, it's on finding and buying -- with the long-term in mind -- good businesses at a plain discount to conservatively estimated value; it's on selling shares of those well-bought high quality business reluctantly. The view here is that selling makes sense only when core economics become permanently impaired, prospects have been misjudged, market price not just somewhat but, instead, meaningfully exceed per share intrinsic value, or opportunity costs are high. Buy/sell decisions aren't just an opportunity to increase returns; they're also an opportunity to make mistakes. It's easy to overemphasize the former and forget the latter. The focus here is on minimizing trading, frictional costs, and errors of all kinds; it's on staying comfortably within realistically assessed limits. First and foremost is the view that an investor should never make a specific investment based upon what someone else thinks. In other words, what makes sense to own is necessarily unique for each investor and it'd be unwise to not act accordingly. So, more generally, this site simply attempts to better understand some useful principles and ideas in context of investment. It's about, in a practical sense, what tends to work over the long haul as well as what, at times, gets the investor into trouble. It's not about grand theories in finance and economics. These too often distract from what matters or, worse yet, lead to costly misjudgments. As a result, they are mostly viewed with a healthy dose of skepticism here. Otherwise, the best thinking across disciplines should be learned well then put to good use in a way that's uniquely suitable.
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Notable Quote
"Warren and I have not made our way in life by making successful macroeconomic predictions and betting on our conclusions.
Our system is to swim as competently as we can and sometimes the tide will be with us and sometimes it will be against us. But by and large we don't much bother with trying to predict the tides because we plan to play the game for a long time.
I recommend to all of you exactly the same attitude.
It's kind of a snare and a delusion to outguess macroeconomic cycles... ...very few people do it successfully and some of them do it by accident. When the game is that tough, why not adopt the other system of swimming as competently as you can and figuring that over a long life you'll have your share of good tides and bad tides?" - Charlie Munger
Our system is to swim as competently as we can and sometimes the tide will be with us and sometimes it will be against us. But by and large we don't much bother with trying to predict the tides because we plan to play the game for a long time.
I recommend to all of you exactly the same attitude.
It's kind of a snare and a delusion to outguess macroeconomic cycles... ...very few people do it successfully and some of them do it by accident. When the game is that tough, why not adopt the other system of swimming as competently as you can and figuring that over a long life you'll have your share of good tides and bad tides?" - Charlie Munger