No. of Recommendations: 3
Good morning, I don't have much interest in posting against my own book, but, once Buffett passes, does anyone seriously expect Brk to benefit from the Buffett bounce, which t and t currently enjoy? ''Berkshire Stock Buys Still Get a Buffett Bounce'but Maybe Not the Expected Results
By Andrew Bary
May 19, 2023 7:24 pm ET
ILLUSTRATION BY ELIAS STEIN
Warren Buffett is justifiably renowned as a stockpicker. But following Berkshire Hathaway into new equity holdings is no sure thing. This past week, Berkshire disclosed it had bought $900 million of Capital One Financial shares. Capital One rose 13.5% to $98 on the week'a 'Buffett bounce.'
Capital One may be a winner'or not. In early 2022, Berkshire bought Paramount Global , Citigroup , and HP . All three now are likely below Berkshire's cost, Barron's estimates'particularly Paramount, off some 50% from early 2022 levels. Berkshire bought $8 billion of Verizon Communications in late 2020, then sold it at a loss in 2022. In contrast, Berkshire is ahead on its $20 billion Chevron and $12 billion Occidental Petroleum stakes.
Berkshire has recently seen more rapid trading in its $350 billion portfolio. In late 2020, it acquired shares in Merck , Bristol Myers Squibb , and AbbVie . Those were reasonably well timed, but Berkshire sold them. It also bought and quickly ditched a stake in Taiwan Semiconductor ; Buffett wasn't comfortable with Taiwan's geopolitical risk. Berkshire has scored with five Japanese trading companies that Buffett began accumulating in 2020.
Another issue: Who's buying? Buffett runs some 90% of the portfolio, with managers Todd Combs and Ted Weschler handling the rest. Berkshire doesn't disclose holdings by manager, but the largest and longest-standing ones are probably mostly Buffett's. Positions under $3 billion go to Combs and Weschler. While Buffett likes to say his favorite holding period is forever, few new investments besides Apple seem to qualify.''
