At The Motley Fool, we understand that it often pays to zig when Wall Street zags. Still, we keep an eye on how leading fund managers buy and sell -- especially if they don't work in lockstep with the larger market.
Every quarter, money managers overseeing more than $100 million must disclose their quarter-end holdings publicly by filing Form 13-F with the SEC. The form lists all U.S.-traded securities the manager held at the end of the quarter. Although it doesn't disclose the manager's short positions or intraquarter trades, it can shine a bright light on his or her "long" stock bets. To help us make use of 13-F data, we turned to Motley Fool partner AlphaClone, a research and investment-management firm that tracks hedge fund public disclosures and develops investment strategies based on them.
Q2 2011 update
Warren Buffett is a familiar name to anyone who follows the investment world. His company, Berkshire Hathaway
Why should you look at Berkshire's moves? According to AlphaClone's backtest simulation, anyone who invested in Berkshire Hathaway's 10 largest holdings at the time they were disclosed publicly each quarter would have returned 143.8% since 2000, versus a loss of 4.5% for the S&P 500 (including dividends) as of Aug. 19, 2011.
The total market value of Berkshire Hathaway's disclosed equity holdings as of June 30, 2011 -- the latest quarter for which data is available -- was $52 billion across 27 holdings. Since Buffett is famous for his patience and commitment to his investments, and for not trading terribly often, it's not surprising that Berkshire's sector weightings haven't changed much over recent quarters.
Berkshire's 10 largest positions (shares held) and associated changes as of June 30, 2011 were:
(NYSE: KO)-- unchanged.
(NYSE: WFC)-- increased 2.8%.
(NYSE: AXP)-- unchanged.
Procter & Gamble
(NYSE: PG)-- unchanged.
(NYSE: KFT)-- reduced 5.5%.
Johnson & Johnson
(NYSE: JNJ)-- unchanged.
(NYSE: COP)-- unchanged.
(NYSE: WMT)-- unchanged.
(NYSE: USB)-- unchanged.
(NYSE: MCO)-- unchanged.
Berkshire is Wells Fargo's largest shareholder, and Buffett has praised the bank for its low-cost funding base. Buffett's love of great companies at good prices likely explains the additional shares, since the stock sank in recent months. The decrease in Kraft shares may be tied to Buffett's lack of love for the company's purchase of Cadbury, though he's reportedly supported the company's plan to split up.
During the quarter, Berkshire Hathaway also increased its position in MasterCard
Selected Q2 2011 commentary
Within Berkshire's holdings, consumer staples and financial stocks dominate, combining to make up about 80% of the overall portfolio. Here's where the firm is winning and losing currently and making new bets:
American Express was a big winner in the quarter, with gains of more than 14% for the stock. Shares may have risen during the quarter on bullishness over AmEx's plans to introduce a prepaid electronic wallet, or its decision to wring more money out of its popular Blue Cash card via smaller rewards and annual fees. With a market capitalization around $53 billion, the company has a three-star (out of five stars) rating at Motley Fool CAPS.
Drywall and sheet rock giant USG
Two new holdings for Berkshire are Verisk Analytics
That's the latest from Berkshire Hathaway and its latest investment moves. Tell us what you think in the comments below.
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