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-A ) (NYSE: BRK-B ) is required to periodically report some of its investments.
What's he been up to lately? Here's a rundown of Berkshire's latest buys and sells.
|
Company
|
Shares Purchased in Q2
|
Shares Now Owned by Berkshire
|
|
Johnson & Johnson (NYSE: JNJ )
|
4.4 million
|
36.9 million
|
|
Becton Dickinson (NYSE: BDX )
|
1.2 million
|
1.2 million
|
Becton Dickinson, a manufacturer of medical and laboratory equipment, is an entirely new postion for Berkshire. Before you get too excited, it's important to note that the 1.2 million shares that Berkshire owns are worth about $79 million -- rounding-error money in Berkshire's world, and about what it earns from its Goldman Sachs and General Electric dividends every five weeks.
The position is so small, it's almost irrelevant. In fact, and this is important, the size of the Becton investment makes it probable that it came from one of Berkshire's smaller, offshoot portfolios, such as the GEICO portfolio independently run by Lou Simpson, rather than Buffett himself.
The Johnson & Johnson purchases are no surprise. Last fall, Berkshire "reluctantly" sold a substantial amount of the company's shares to raise cash to buy the aforementioned Goldman and GE preferred-stock stakes. The recent buys are likely nothing more than an attempt to get its J&J stake back up to previous levels. I wouldn't read too much into it.
And now, the sells:
|
Company
|
Shares Sold in Q2
|
Shares Now Owned by Berkshire
|
|
ConocoPhillips (NYSE: COP )
|
6.7 million
|
64.5 million
|
|
UnitedHealth (NYSE: UNH )
|
1.1 million
|
3.4 million
|
|
CarMax
|
3 million
|
9 million
|
|
Home Depot (NYSE: HD )
|
0.9 million
|
2.76 million
|
|
Eaton
|
1.2 million
|
2 million
|
|
WellPoint
|
1.3 million
|
3.5 million
|
|
Constellation Energy
|
14.8 million
|
0
|
The ConocoPhillips sales are the most intriguing here. Buffett's been all over the map on this one, admitting to a "major mistake" in buying shares last summer right before oil tanked. As recently as last fall, Berkshire was still buying tens of millions of shares.
Just months later, Berkshire sold a substantial chunk at a loss, but said it was doing so for tax advantages, locking in losses it could write off to offset gains in other investments. This led some to believe Buffett would jump right back into shares in the ensuing months -- gaining the tax advantage and repurchasing shares far below his original, and self-admitted ill-timed, price.
But that hasn't happened. This quarter's sales raises the question of whether Berkshire continues to pare its postion to gain tax benefits, or is slowly but permanently backing away from its foray into Big Oil. That shares have been shed for two consecutive quarters leads me to believe it's the latter. No one knows for sure, but it's safe to say the lumps have been taken on this one, and Buffett's moving on.
What do you think? Have your thoughts on Berkshire's latest moves? Feel free to share 'em in the comment box below.
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