No. of Recommendations: 2
HOLD IT BREAKING NEWS,
This guy in Barrons isn't clueless, well-done brother!
"Sometimes what you don’t do speaks louder than what you do.
With a net worth of about $140 billion, there’s a reason Warren Buffett is considered the ultimate investment guru by so many. As he prepares to step away from his CEO role at Berkshire Hathaway by the end of the year, his followers are running out of time to imitate his moves.
The latest Berkshire trades reveal the house is still on the lookout for cheap shares. It bought a stake in UnitedHealth, the insurer that has dropped 50% over the past 12 months, probably because it sees the selloff as overdone.
And for what it’s worth, David Tepper’s Appaloosa also bought UNH stock in the second quarter. So did Michael Burry, the investor who famously made billions in the 2008-09 financial crisis as dramatized in the movie “The Big Short.” Given the stock’s continued declines before Friday, they may have all lost money so far.
Buffett also snapped up beaten-down house-building shares including Lennar and D.R. Horton. He leaned into a tariff trade with purchases of steel maker Nucor, which is a bet in part that taxes on imports will bolster U.S. producers.
But the biggest takeaway is how little Buffett’s firm bought. Its purchases totaled less than $2 billion, yet it sold more than $4 billion in Apple shares alone. Even the investments the company did make were so small they might have been directed by Buffett’s lieutenants, rather than the Oracle of Omaha himself.
We also know Berkshire was sitting on a cash pile of $344 billion at the end of last quarter. That’s extraordinary—more than a third of the company’s market value of $1 trillion.
Buffett’s caution doesn’t mean stocks won’t keep going up. It’s just that he doesn’t see many bargains right now. Unfortunately it’s not just a ticking clock that his copycats face—it’s a lack of opportunities to mimic.
—Brian Swint
