Wednesday, July 13, 2011

Buffett Invests $ 4 Billion in Equities

Late last week, Warren Buffett was interviewed by Bloomberg.

In this Bloomberg article Buffett says they've spent something like $ 4 billion on equities since February.

Bloomberg Video: Interview With Warren Buffett

Buffett received a bunch of coverage earlier this year when, in the annual letter to shareholders, he said that the "elephant gun has been reloaded, and my trigger finger is itchy". He was referring to a future large acquisition which he shortly thereafter delivered on with the $9 billion acquisition of Lubrizol. The admission now that $4 billion has already been invested in common stocks this year reveals he clearly wanted to put some more of that cash on the balance sheet to work.

Berkshire Hathaway's (BRKa) two largest equity investments remain soft drink maker, Coca-Cola Co. (KO), and the largest U.S. home lender, Wells Fargo (WFC). Buffett has added substantially to the Wells position in the past five years or so. In fact, many of the purchases were at higher prices that Wells is selling at now.

The number of Coca-Cola shares that Berkshire owns has not changed for a very long time.

Here's a quick summary of Berkshire's top ten U.S. holdings as of the end of 1Q 2011.

Berkshire's Largest U.S. Holdings
Coca-Cola (KO): $ 13.5 billion
Wells Fargo (WFC): $ 9.3 billion
American Express (AXP): 7.4 billion
Procter & Gamble (PG): 4.9 billion
Kraft (KFT): $ 3.7 billion
Johnson & Johnson (JNJ): $ 2.8 billion
Conoco Phillips (COP): $ 2.2 billion
Wal-Mart (WMT): $ 2.1 billion
US Bancorp (USB): $ 1.7 billion
Moody's (MCO): $ 1.0 billion

In addition to these holdings, other large non-U.S. holdings* include Munich Re, Sanofi-Aventis (SNY), Posco (PKX), Tesco (TSCDY), and BYD.

What Buffett has been doing when it comes to common stocks in 2011 is a shift compared to last year. In 2010, Buffett actually sold more equities than he purchased. In fact, last year Berkshire purchased $ 4.3 billion in equities while selling roughly $ 5.9 billion.

Adam

Long positions in BRKb, KO, WFC, AXP, PG, KFT, JNJ, COP, WMT, USB, MCO, SNY, and PKX

* Berkshire owns a small amount of Sanofi's ADR but most of the shares are not in the form of ADR's.
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