Tuesday, August 10, 2010

Buffett: Net Buyer of Equities in 2Q 2010

From looking at Berkshire Hathaway's (BRKa) last two quarterly cash flow statements, it's clear Buffett was buying significantly more equities in the 2nd quarter than he was selling.

The cash flow statement in the most recent 10-Q, specifically the 2nd quarter cash flows from investing activities section, shows that Buffett bought $ 3.282 billion in equities and sold $ 2.710 billion in equities ytd. That's no big deal in itself but the 2nd quarter 10-Q only gives a ytd look at cash flows. So you need to look at the 1st quarter cash flows from investing activities and subtract the difference. If you subtract the equities bought & sold in the 1st quarter from the 2nd quarter, you get a clean look at the equities bought in 2Q alone. Doing this simple math reveals:

Equities Bought: 1.638 billion
Equities Sold: .427 billion
Net Buying: 1.211 billion

We should find out when the 13F-HR is released the specific equities he was buying and selling. A couple reasons why we may not find out what he bought/sold is that: 1) the SEC allows Buffett to hold back from the 13F-HR what he is buying/selling under certain circumstances (building a large position), or 2) the equities bought/sold do not trade on a US exchange.

The latest 10-Q revealed a minor further drop in the cost basis of Procter & Gamble (PG), so that was some of the selling in the 2nd quarter.

Adam

Long BRKb and PG

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