At The Motley Fool, we understand that it often pays to zig when the rest of Wall Street zags. Like us, hedge funds and other institutional investors rarely move in lockstep with the broader market. By tracking these little-followed funds' buy and sell decisions, we can often gain valuable insights into opportunities the market might be missing.

Every quarter, any money managers overseeing more than $100 million must publicly disclose their quarter-end holdings in the Securities and Exchange Commission's Form 13-F. It lists all U.S.-traded securities the fund's manager held at the end of the quarter. Although the form doesn't disclose short positions or intraquarter trades, it can illuminate long stock bets.

To better decipher this 13-F data, we turned to Motley Fool partner AlphaClone, a research and investment-management firm that develops investment strategies based on hedge funds' public disclosures.

Meet Berkshire Hathaway
Warren Buffett is the CEO of Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B). He believes in value investment -- buying stocks at less than their intrinsic value. The total market value of Berkshire Hathaway's disclosed equity holdings as of March 31 -- the latest quarter for which data is available -- was $53.6 billion across 26 holdings.

Why should you care? Because according to AlphaClone's backtest simulation, if you'd invested in Berkshire's 20 top holdings as they were disclosed publicly each quarter, you would have earned a total return of 147.0% between January 2000 and now, versus just 7.7% for the S&P 500.

The fund's 10 largest positions (by value) and associated share-count changes as of March 31 were:

  1. Coca-Cola (NYSE: KO) -- no change
  2. Wells Fargo (NYSE: WFC) -- no change
  3. American Express (NYSE: AXP) -- no change
  4. Procter & Gamble (NYSE: PG) -- no change
  5. Kraft Foods (NYSE: KFT) -- no change
  6. Johnson & Johnson (NYSE: JNJ) -- no change
  7. ConocoPhillips (NYSE: COP) -- no change
  8. Wesco Financial (AMEX: WSC) -- no change
  9. Wal-Mart (NYSE: WMT) -- no change
  10. U.S. Bancorp (NYSE: USB) -- no change

Selected Q1 2011 commentary
Berkshire Hathaway has a reasonably diversified portfolio, with consumer and financial stocks making up more than three-quarters of its publicly disclosed holdings. Here's where the firm is winning and losing, and making new bets, at the moment:

  • Current winner: ConocoPhillips did well, increasing 18% in the first quarter. The stock comprises fully 4.3% of the total portfolio.
  • Current loser: Procter & Gamble and Johnson & Johnson both fell between 3% and 4% during the first quarter.
  • New bets: The only new addition is MasterCard, which makes up a minuscule 0.1% of the total portfolio.

So there you have it -- the blow-by-blow of Berkshire Hathaway’s latest moves. Tell us what you think in the comments section below.

Company data provided by AlphaClone LLC, a San Francisco-based research and investment-management firm that tracks hedge-fund public disclosures. For more information on the firm's investment approach, visit AlphaClone.


Backtesting is the process of evaluating a core strategy by applying it to historical data. Backtested performance results are provided for purposes of illustrating historical performance had a core strategy had been available during the relevant period. Backtested performance results are hypothetical and have inherent limitations. AlphaClone makes no representation that any core strategy will achieve performance similar to any backtested performance results. Actual results could differ materially from backtested performance, and future results could differ materially from backtested performance. Past performance is no indication or guarantee of future results.

The Motley Fool owns shares of Wells Fargo, Berkshire Hathaway, Wal-Mart, Coca-Cola, and Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Procter & Gamble, Johnson & Johnson, Berkshire Hathaway, Wal-Mart, and Coca-Cola, and creating a diagonal call positions in Johnson & Johnson and Wal-Mart. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.