The latest filing revealing the stocks that Warren Buffett's
has bought and sold during the last three months is officially
in. But it turns out the media may tell you one thing, while the
truth may be something altogether different.
In the second quarter, we learned there was a sizable shakeup in
the stock holdings of Berkshire Hathaway, as it unloaded more
than 30% of its stake in
nearly 90% of the
stock it held. Combined, these moves were worth around $1.5
In addition, we learned of new positions in cable company
, which is an oil and gas distributor, worth $365 million and $66
million, respectively. There was also the aggressive addition of
, where the shares that Berkshire owns rose by 36%. Its total
value now stands at nearly $750 million, making it the
16th largest holding in the portfolio. And there was even a
roughly $100 million addition -- about a 10% growth -- of
for good measure.
Yet, all of this news -- the information itself, not the
rationale behind it -- likely comes as no surprise. After all,
the following headlines were all posted just last week:
- "Warren Buffett buys more GM stock" (CNNMoney)
- "Warren Buffett Sends A Mixed Message To John Malone As He
Buys Into Charter But Unloads Starz" (Deadline Hollywood)
- "Warren Buffett Buys These 8 Dividend Stocks" (Seeking
But the problem is, that isn't exactly true.
The thing to remember
You see, the reality is, we don't know whether or not Buffett
himself bought or sold these smaller positions. He himself once
remarked: "When our quarterly filings report relatively small
holdings, these are not likely to be buys I made (though the
media often overlook that point) but rather holdings denoting
purchases by Todd or Ted."
Todd Combs and Ted Weschler are the two men who, at the end of
last year, each managed $7 billion of the roughly $120 billion
portfolio of stocks Berkshire Hathaway held. So the reality is,
any of these smaller positions are likely the work of either Todd
or Ted, not Buffett himself.
While that doesn't mean we should discount the various
purchases that are made by Berkshire Hathaway, we must understand
that it isn't Buffett himself who is making them. The reality is,
while Todd and Ted just came onboard a few years ago, Buffett has
done nothing but heap praise on them for the work they've done.
Consider his remarks when he introduced them in his letter
released in the spring of 2012:
As 2011 started, Todd Combs joined us as an investment
manager, and shortly after yearend Ted Weschler came aboard.
Both of these men have outstanding investment skills and a deep
commitment to Berkshire. Each will be handling a few billion
dollars in 2012, but they have the brains, judgment and
character to manage our entire portfolio when Charlie and I are
no longer running Berkshire.
And last year he said:
Todd Combs and Ted Weschler, our new investment managers,
have proved to be smart, models of integrity, helpful to
Berkshire in many ways beyond portfolio management, and a
perfect cultural fit. We hit the jackpot with these two.
Buffett clearly wants us to understand these are two
individuals who have a remarkable ability to find great
The Foolish bottom line
Am I suggesting we no longer should pay attention to these
smaller moves -- yes, a $365 million move is considered small at
Berkshire -- that we learn of each quarter? Of course not. The
fact that Buffett trusts them means that we should, too.
It does mean, however, that when we see these moves made and
the portfolio begin to change, we can no longer simply say
Buffett did it. Because that just wouldn't be true.
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What You Need to Know About Warren Buffett
originally appeared on Fool.com.
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