"Buy American. I am."
That was the title of Warren Buffett's Oct. 16 New York Times op-ed, which described why he and his personal loot were diving headfirst into American stocks. "If prices keep looking attractive," Buffett said, "my non-Berkshire net worth will soon be 100 percent in United States equities."
So Berkshire Hathaway
Berkshire slashed its positions in Procter & Gamble
At first glace, the puzzlement seems valid, but let's remember a few important details:
- Just because Buffett's selling doesn't mean he's necessarily bearish. It simply means he's found better use of the capital elsewhere.
- Where might he have found better use of the capital? In the credit market, where he spent billions of dollars scooping up debt in iconic American companies.
Those deals -- such as Berkshire's recent debt purchases in Tiffany and Harley-Davidson -- are often offered only to high-profile investors like Buffett. One deal last fall, to purchase Goldman Sachs
Just because Berkshire's been selling the common shares that average Joes consider the backbone of the market doesn't mean that Buffett isn't putting his money where his mouth is. Most of the debt deals he's scored in recent months come with double-digit yields and significant equity upsides -- far better returns than he could hope to receive holding common stocks.
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Fool contributor Morgan Housel owns shares in Berkshire Hathaway and Procter & Gamble. US Bancorp and Johnson & Johnson are Motley Fool Income Investor picks. UnitedHealth and Berkshire Hathaway are Motley Fool Inside Value selections, as well as Motley Fool Stock Advisor recommendations. The Fool owns shares of UnitedHealth Group, Berkshire Hathaway, and Procter & Gamble. The Motley Fool is investors writing for investors.