Here's what Warren Buffett has been buying and selling

About Latest Posts Motley Fool StaffThe articles listed on this page are compiled by our team of Foolish Writers and …

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

At The Motley Fool, we understand that it often pays to zig when professional investors zag, but that doesn't mean we don't pay attention to what leading fund managers are buying and selling. And funds that aren't always in lockstep with the broader market can be a particularly valuable source of insight.

The big picture

Warren Buffett is a familiar name to anyone who follows the investment world, with his Berkshire Hathaway (NYSE: BRK-A, BRK-B) company increasing its per-share book value by an annual average of 20% between 1965 and 2010, leaving the S&P 500 in the dust with its 9%. Clearly, the guy has a knack for making smart investments.

Buffett isn't your typical fund manager – in fact, he doesn't run a fund at all, but rather a large conglomerate most accurately described as an investment company. He owns many businesses in their entirety, from See's Candies to car insurer Geico and clothing company Fruit of the Loom as well as having tens of billions of dollars invested in the shares of listed public companies.

Berkshire Hathaway's stock portfolio totalled a massive US$66 billion in value (around one and a half times the entire market value of Telstra (ASX: TLS)) as of Dec. 31, up 12% over just last quarter.

The company's biggest holdings range from familiar long-time positions such as Coca-Cola (NYSE: KO) and Wells Fargo (NYSE: WFC) to newer names, including IBM (NYSE: IBM) and digital television provider DIRECTV (Nasdaq: DTV).

Before we delve into changes in the portfolio, it's important to note that the collection of stocks and its management is not handled entirely by Mr Buffett. For many years, Lou Simpson managed the 0069nvestments of Berkshire subsidiary Geico, and now there are two newcomers in the fold, one or both of whom may end up succeeding Buffett at the company's investment helm. They're Todd Combs and Ted Weschler, and some of Berkshire's investment moves reflect their thinking.

Interesting developments

So what does Berkshire's latest disclosure tell us? Here are a few interesting details:

A new holding is dialysis service provider DaVita (NYSE: DVA), representing less than half a percentage of the portfolio. Many health-care stocks are compelling long-term investments, due to our growing and aging population. This is likely a Weschler buy. It generates a lot of cash flow, but it has also recently been accused of wasting medicines in order to collect more money from Medicare. That news set the stock back, presenting a buying opportunity for those with faith in the company.

Berkshire's stakes in IBM and Intel (Nasdaq: INTC) increased by 11% and 23%, respectively, though the IBM position is far larger, at $11.8 billion, versus less than $300 million for Intel. Still, it's big news to see technology companies in the portfolio at all, as Buffett has long avoided them, explaining that it's hard for him to know how they will be doing in 10 years. But he highlighted IBM's five-year plan as an outstanding roadmap for him as an investor.

Berkshire sold out of its position in ExxonMobil (NYSE: XOM) entirely over the quarter. The stock's valuation may have played a part, as the price surged 17% during the quarter, but its departure is more likely tied to some of the issues it faces, such as a slowdown in production, falling prices for natural gas, and its operations in not-so-stable Iraq and tension-ridden Russia.

The number of Johnson & Johnson (NYSE: JNJ) shares held shrank by 22% during the quarter. Long revered and admired as a giant in consumer products, pharmaceuticals, and medical devices, J&J has seen its reputation tarnished somewhat lately, on news of various mishaps and questionable decisions such as selling artificial hips overseas that were not approved by the US Food andDrug Administration. Berkshire's stake in the company is still sizable, though, at roughly $2 billion.

Foolish take-away

We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart people are doing – especially people with the track record of Buffett.

If you are looking for ASX investing ideas, look no further than "The Motley Fool's Top Stock for 2012." In this free report, Investment Analyst Dean Morel names his top pick for 2012…and beyond. Click here now to find out the name of this small but growing telecommunications company. But hurry – the report is free for only a limited period of time.

A version of this article, written by Selena Maranjian, originally appeared on It has been updated by Scott Phillips.

Scott is The Motley Fool's feature columnist. Scott owns shares in Berkshire Hathaway, Telstra, Coca-Cola and Johnson & Johnson. You can follow him on Twitter @TMFGilla . The Motley Fool's purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.


More on ⏸️ Lessons From Investing Greats

a child dressed as businessperson looking sad and dejected at desk with pile of papers and old fashioned telephone.
⏸️ ASX Shares

Here are 3 ASX shares with high debt levels

Too much debt can catch up with companies when tides turn for the worse.

Read more »

Green piggy bank with covid mask on
⏸️ Lessons From Investing Greats

10 incredible quotes that sum up investing in 2020

Here are the quotes that defined what investing in 2020 was really like, from Warren Buffett to Howard Marks.

Read more »

following famous investors in shares represented by pair of men's business shoes
⏸️ Lessons From Investing Greats

Want to make a million in the next market crash? I'd use these 3 Warren Buffett tips today

Following Warren Buffett’s methods may lead to higher long-term returns in my view. They may even allow an investor to…

Read more »

a dog sleeping with cucumbers on his eyes
⏸️ Famous Investors

I'd follow Warren Buffett's tips to retire on a growing passive income

I think that following Warren Buffett’s tips could lead to a larger retirement portfolio, from which a generous passive income…

Read more »

berkshire hathaway owner warren buffett
⏸️ Lessons From Investing Greats

Don't waste the stock market crash! I'd use Warren Buffett's strategy to profit from it

Following Warren Buffett’s strategy after the stock market crash could lead to relatively high long-term returns in my opinion.

Read more »

three reasons to buy asx shares represented by man in red jumper holding up three fingers
Share Market News

3 reasons why I'd start preparing for the next stock market crash today

The next stock market crash could provide buying opportunities for investors in my opinion. Preparation may help an investor to…

Read more »

Black swan figurine on top of pile of coins started to topple over
⏸️ Lessons From Investing Greats

How Warren Buffett's strategy can help investors to capitalise on a market crash

Following Warren Buffett’s logical approach could lead to improving long-term returns after a stock market crash, in my opinion.

Read more »

asx shares investing experts represented by blocks spelling the word expert
⏸️ Lessons From Investing Greats

I'd use Warren Buffett's tips to survive a second stock market crash

The potential for a second stock market crash means that following Warren Buffett’s tips could be a sound move. It…

Read more »