Warren Buffett Goes Shopping
By
Morgan Housel
November 17, 2008
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If you can't beat 'em, join 'em.
It's not surprising that mimicking Warren Buffett's moves over the years would leave you well ahead of the pack. That's why it's great news that as an elephant-sized investment vehicle, Buffett's Berkshire Hathaway (NYSE: BRK-B) is required to periodically report some of its investments.
Even better, Buffett's recently been both vocal and active about how he feels about the market, penning an op-ed in the New York Times last month to announce that he's shifting the bulk of his non-Berkshire net worth from Treasury bonds to U.S. stocks, and swarming in on Goldman Sachs (NYSE: GS) and General Electric (NYSE: GE) as markets tumbled. "Fears regarding the long-term prosperity of the nation's many sound companies make no sense." Buffett said last month.
What's the Oracle been up to lately? In the past quarter, Berkshire purchased about 24 million shares of ConocoPhillips (NYSE: COP), upping its existing stake to 84 million shares -- currently worth just less than $4 billion. As of the filing date of Sept. 30, ConocoPhillips stood as Berkshire's fourth-largest common stock holding, behind Wells Fargo (NYSE: WFC) , Coca-Cola, and Procter & Gamble (NYSE: PG).
That's a pretty serious vote of confidence. Conoco shares have crashed more than 40% in the past three months, as global economies screech to a halt. In the short term, that pullback is probably justified -- energy was getting ahead of itself for a while. So did Buffett buy at the peak? Nah. For long-term investors who want to make the bold assumption that energy isn't just a passing fad, there are some serious, serious bargains being made right now.
Berkshire's other purchases in the quarter included a new 2.9 million-share investment in electrical goods manufacturer Eaton, as well as a 1.8 million-share increase in its existing stake in NRG Energy (NYSE: NRG).
It's important to remember that those are the stocks that Berkshire bought, not necessarily what Buffett bought for the personal portfolio he discussed in the New York Times op-ed. They may have been the same; we just don't know.
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