Warren Buffett’s Berkshire Hathaway – a single Class A share of which is now worth $215,865 – invests in just 45 publicly-listed stocks, as well as a raft of unlisted investments, but the majority of the equity investments are held in just four stocks.
Berkshire Hathaway (BRK)
Source: Yahoo!7 Finance, 2 February 2015
As of September last year, Wells Fargo & Company, The Coca Cola Company, International Business Machines Corporation (i.e. IBM) and American Express Company accounted for approximately 58% of the aggregate fair value of Berkshire’s funds in equity securities.
It’s possible to find out what the Oracle of Omaha, and his sidekick Charlie Mungo, invest in through Berkshire Hathaway filings with the US Securities and Exchange Commission. What’s a little harder to guess is how long Berkshire Hathaway has held these shares.
Here is a list of the top 10 holdings in order of the size of the investment. All of them are relatively well known on our shores as well. The last three are lesser known and are diversified financial services holding company US Bancorp, kidney care company DaVita Healthcare Partners and DirectV.
Wells Fargo & Company
Coca Cola Company
IBM
American Express
Wal Mart Stores
Procter & Gamble
Exxon Mobil
US Bancorp
DaVita Healthcare Partners
DirectV
Berkshire has been acquiring DaVita since 2011 and has just over an 18% stake in the company. But it hasn’t been pushing for board seats or control.
And although we all worship at the altar of Warren, it’s actually some recent recruits – fund managers Ted Weschler and Todd Combs – who are responsible for some of the company’s more recent holdings like DaVita.
Healthcare is a sector that is growing globally, fuelled by increasing longevity and the better quality of living that we now all expect. DaVita excels in its field, recently announcing that it ranked first in outcomes according to reports issued by the Center for Medicare and Medicaid Services (CMS).
You can see the rise in its share price over the past five years in the chart below.
DaVita (DVA)
Source: Yahoo!7 Finance, 2 February 2015
Buffett has long avoided the technology sector, or investing in things he says he doesn’t understand, but he broke this mantra in 2011 when he added IBM, which is now Berkshire’s third largest listed company holding. However there is no Facebook, no Google, no Apple and definitely no Twitter in the company’s top 45 holdings.
This makes it harder to use the list for IT ideas, which is arguably one of the main reasons to invest offshore for Australian investors looking for diversity, as there is a paucity of companies in the IT sector here.
That may be so, but Buffett has always been in it for the ‘buy and hold’ strategy, which is exactly what self managed super fund investors should be doing.
As well as the guru’s eagerly awaited “letter to shareholders”, which comes out every March, the company is required to release details of its holdings to the SEC within 45 days of the end of a calendar quarter.
It’s the most recent Form 13F that we’ve gained the above details from, but the next one needs to be to the market by early February and if you’re thinking of investing in international shares this year, keeping an eye out for what Warren and Charlie are up to can be a very helpful guide.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
