Halls of Shrewd'm / Shrewdsmith
No. of Recommendations: 6
Not sure why any of them would have received confidential treatment but the most interesting purchase is the $5 billion of UNH. I don't think that WEB, who hopefully is still actively discussing companies with Greg, T & T, is buying anything. Think he is following the same blueprint used when Lou Simpson retired which was to liquidate his portfolio. Lou's portfolio was much smaller so could be done all at once. My guess is that the UNH buy is either a combination of T&T or it is the first capital allocation decision to stocks made by.....Greg.
No. of Recommendations: 0
“ My guess is that the UNH buy is either a combination of T&T or it is the first capital allocation decision to stocks made by.....Greg.“ It’s a riot listening to the pathetic financial press report this news every quarter. After Buffett passes the headlines might still read, Buffett buys xyz, buy, bi, bye. What a country.
No. of Recommendations: 12
Not sure why any of them would have received confidential treatment but the most interesting purchase is the $5 billion of UNH. I don't think that WEB, who hopefully is still actively discussing companies with Greg, T & T, is buying anything. Think he is following the same blueprint used when Lou Simpson retired which was to liquidate his portfolio. Lou's portfolio was much smaller so could be done all at once. My guess is that the UNH buy is either a combination of T&T or it is the first capital allocation decision to stocks made by.....Greg.
UNH wasn't one of the stocks that received complementary treatment, those were D.R. Horton, Lennar and Nucor. UNH and Lamar were Q2 purchases.
I don't think Warren's "portfolio" will be liquidated, as that would include throwing away huge tax deferrals in long-held positions like AXP, KO and MCO. We'll see what they do with AAPL and BAC, but so far this looks like trimming not liquidating.
I would assume UNH is an investment by Todd Combs. I doubt Greg Abel is making common stock investments of his own at this point but I assume that come next year he will have the authority to make decisions about how much capital is allocated to each of Combs and Weschler and what he wants to do with the legacy positions he inherited from Warren.
Wholesale liquidations, Lou Simpson Portfolio -style, would incur a huge amount of cash tax, increase the cash level, increase the re-investment risk - generally it would not make things easier for Greg at the beginning of his tenure.
No. of Recommendations: 1
**confidential** , not "complementary" auto-correct or mis-typed? who knows
No. of Recommendations: 3
Totally agree, nola. Greg doesn’t want or need a clean slate & will have Plenty of cash to allocate in time.
I imagine WEB’s decisions were primarily the cont’d AAPL & BAC trimming. I was a wee bit surprised at the AAPL trim after we had sold 2/3 of the position. As usual, lots of Patience & Discipline in Omaha. Net sellers for nearly 3 years.
No. of Recommendations: 6
UNH wasn't one of the stocks that received complementary treatment, those were D.R. Horton, Lennar and Nucor. UNH and Lamar were Q2 purchases.
That is correct: In fact, in Q2, DR Horton was (very slightly) reduced, whereas the Lennar and Nucor positions initiated in Q1 were increased, Lennar by 265% and Nucor by 15%.
But talk about a wet firecracker - despite the requests for confidential treatment, the Nucor and Lennar positions acquired now represent 0.33% and 0.30%, respectively, of the US stock portfolio reported in the 13-F. I think we already knew that it had to be a small addition, but I didn't expect it would be THAT small.
Given the very high market prices of stocks, I guess it's not surprising that the changes are very much in line with recent quarters, generally involving selling, not buying. The only moderately big moves were selling 20m of the 300m Apple shares, buying 5m shares of United Health, and selling 4% of the #3 and #10 positions (Bank of America and, thankfully, Da Vita). In total, the stocks sold were worth 2.7% of the portfolio and the stocks bought were worth 1.5% of the US portfolio, so this is fine tuning, not liquidation.
DTB
No. of Recommendations: 15
No idea what happens to the Berkshire portfolio in 2026 when Mr Buffett completes his handover but can think of a few considerations:
1. It’s hard to sell out of such large positions and get into new similar size positions
2. Deferred taxes are a very material reason to hold
3. A new manager can’t reasonably expect to have the conviction in a former manager’s picks. This is particularly pronounced with such extreme concentration and the issue grows over time. Conviction is extremely important in managing the portfolio
4. Full valuations make selling easier
5. Berkshire has too much cash already
6. Perhaps some of the Buffett picks are forever holdings for any manager
7. Maybe some picks like Occidental have strategic importance and would not be sold
Not surprising Berkshire is a net seller of stocks of late.
Maybe all things considered, the new manager puts their mark down during the next market crash and Buffett’s picks become less significant over time. That could easily happen during the next 5 years, given everything that is going on.
Posted to learn something, so let me know.
No. of Recommendations: 13
1. It’s hard to sell out of such large positions and get into new similar size positions
2. Deferred taxes are a very material reason to hold
3. A new manager can’t reasonably expect to have the conviction in a former manager’s picks. This is particularly pronounced with such extreme concentration and the issue grows over time. Conviction is extremely important in managing the portfolio
4. Full valuations make selling easier
5. Berkshire has too much cash already
6. Perhaps some of the Buffett picks are forever holdings for any manager
7. Maybe some picks like Occidental have strategic importance and would not be sold
I have been known to say that whoever follows the CEO, even a legendary one, won’t do the same things the last one did. Or as one person who saw several come and go said to me “Every new dog wants to pee on the bush to mark his territory.” [Worst one ever was the one who insisted on changing USAir to USAirways at a cost of tens of millions to repaint all the planes, gates, equipment, signage, etc. Seriously?]
That said, I don’t think there will be a lot of volatility once Warren leaves for a few reasons. Most of the biggest positions are “conviction” and “forever”, and the new guys aren’t really “traders” in the conventional sense. Just under 70% of the portfolio is in just five stocks: Apple, AmEx, Bank of America, Coke, and Chevron. I would think BoA, AmEx, and Coke are forever (absent malfeasance or gross ineptitude), Apple has already been trimmed but only because it became so outsized (with associated risk) not because of lack of confidence, and that leaves Chevron, which may or may not be played with as the industry waxes & wanes.
I would certainly think #1 is inapt: these guys can surely have conviction in those things which have existed for so long (again, excepting crazy outliers).
I’d surely agree with #5, and the rest are eh, maybe so, maybe not. Warren has mostly *not* sold at full valuations (although he has publicly regretted a few of them later).
I count 3 or 4 issues between 3% and 5%, the rest don’t really matter - if/until they grow and do. I mean yeah, selling or combining Kraft will be something and newsworthy, but who cares what happens with Chubb? So I don’t expect much volatility afterwards, especially considering the extra-close kind of scrutiny the newest picks are bound to get (yeah, sure get some press now, but nothing like those that will follow the headline: “Now that Buffett’s Gone….”
No. of Recommendations: 2
Buffett sold all of Lou Simpson's portfolio.
If Todd and Ted want a free leash, they will (and maybe should) pee on Buffett's bushes and "salt the earth" so to speak.
Personally I have no clue why these people think they can pick stocks.
Pretty sure any broad market index has beaten BofA, Amex or Coke silly over the years. This is not 1970s or 80s anymore. But whatever. Intrinsic value blah blah. Neros fiddling while the American empire burns to the ground.
No. of Recommendations: 4
Berkshire's cost basis though on these stocks are hard to beat .
