To say Warren Buffett has done well for himself would be an
understatement. That's why from time to time, I like to check in on
what the "Oracle of Omaha" is doing with
Berkshire Hathaway's (NYSE: BRK-B)
I came across a neat resource if you also like to keep tabs on
Buffett. CNBC.com has a page that tracks the common stocks in
Berkshire's portfolio in real-time.
visit it here
Looking at that page, it's very evident Warren and I invest a
little differently. He's the most famous value investor in the
world. I'm more than happy to let the dividends roll in month after
month -- even if the checks aren't in the billions or millions.
So while I understand he isn't on the prowl for high-income
securities, the holdings still left me a little astonished. Poring
over the names, I recognized every stock -- Berkshire owns some of
the most well-known companies in the world.
But I also recognized that it doesn't own many stocks I would even
look at twice for income. The closest one is
, which yields 4.9%.
To its credit, Berkshire does own some securities throwing off nice
income. The company acquired some
Goldman Sachs (
General Electric (
preferreds in late 2008 that pay a niceyield of 10%. However, that
was a special deal not available to retail investors.
Digging a little deeper into Berkshire's holdings, I found the
roughly 40 common stock holdingsyield an average of only about
2.0%. Even so, thanks to the massive size of its portfolio,
Berkshire will rake in an astonishing $1.2 billion from dividends
alone in the next year if you project the annual payments of the
current holdings forward. Certainly $1.2 billion is nothing to
But Buffett's disinterest in income is costing Berkshire.
On a whim, I calculated the averageyield of the 27 holdings in my
portfolios (I like to be able to watch my holdings like a hawk --
that's why my portfolio isn't larger than it is). It comes out to
7.4% -- more than five full points above Berkshire's 2.0%
In actual dividends paid, the difference between theyield on my
portfolio and Berkshire's would be staggering. Berkshire's
portfolio totals $50.9 billion (which is more than the
of Panama, Iceland and Bulgaria, among others). If the entire
portfolio earned 7.4% in dividends annually, payments would total
$3.8 billion -- over $2.6 billion more than it does right now, and
enough to purchase nearly twenty Boeing 747s.
Action to Take -->
Of course, we don't all have the portfolio of Berkshire Hathaway,
and I think Warren Buffett has done OK for himself with his value
focus. But the same principles that are leaving billions on the
table for Berkshire could be leaving thousands on the table for
your portfolio if you aren't making dividends a priority
-- Carla Pasternak
Carla Pasternak has nearly 30 years of income investing
experience, including serving as the Director of Research for
High-Yield Investing and High-Yield International. Read More...
P.S. -- My High-Yield Investing newsletter is one of the most
popular advisories devoted to income investing. In my
just-published November issue, I highlight a little known asset
class that is paying some big yields. In fact, my favorite find
yields 9.7%! To learn more about High-Yield Investing, including
how to subscribe with zero risk (thanks to a money-back guarantee)
and receive my November issue, simply click here.
Disclosure: Neither Carla Pasternak nor StreetAuthority, LLC
hold positions in any securities mentioned in this article.