Warren Buffett (Berkshire Hathaway) Stock Portfolio – Update 2009 Q4


Warren Buffett’s Berkshire Hathaway (BRK.A / BRK.B) stock updates & stock activity for the fourth quarter of 2009 (Q4 End of 12/31/2009):

New Additions:

None.

.

Added to:

BDX [Becton Dickson & Co.]
– Berkshire added 300,000 shares of the company, increasing its holding to 1,500,000.  Becton, Dickinson & Co (BD) is a medical technology manufacturer of medical supplies, devices, lab equipment, and diagnostic products.

IRM [Iron Mountain]
– This quarter, Berkshire more than doubled its holdings in the company, increasing its position by 107.58% with 3,627,800 shares.  This brings its total to 7,000,000 shares.

Republic Services Inc. [RSG]
– This was a new stake purchased in Q3 2009.  Republic Services Inc., one of the largest solid waste service providers merged with Allied Waste Industries in Dec 2008.  Berkshire significantly added to its shares of this holding by 128.7% or 4,665,500 shares, to 8,290,500 shares total.

WMT [Walmart Stores Inc.]
– Again, Berkshire added to the discount retailer.  Last quarter, Berkshire increased its position by 89.71%.  This quarter a small increase of 3.17% was made, or 1,200,500 shares.  Berkshire held 39,037,142 shares at the end of Q4.

WFC [Wells Fargo Co.]
– Berkshire increased its holdings for the 3rd time in 2009 (Q1, Q3, Q4).  This quarter 6,732,728 shares were added, an increase of 2.15%, bringing the total to 320,088,385 shares.  In Q3 Berkshire added 10,746,445 shares (3.55%).  In Q1 Berkshire also increased its holdings of WFC by around 4.26%.  There were very few times in history when Buffett publicly named a stock, and during the most feared days of the financial crisis in 2009, this was one of them!  He put his money where his mouth was, and made a significant purchases this year.

.

Reduced:

KMX [CarMax Inc.]
– For the 3rd time this year (2009), the retailer of used cars was reduced.  Holdings were reduced by 12.5% or 1,000,000 shares, down to 8,000,000 shares total.  In Q2, the holding was reduced by 3,000,000.  In Q1, the holding was reduced by 5,636,000 shares.

COP [Conoco Phillips]
– As Buffett has mentioned in his 2008 annual report and in Q1, Berkshire will continue to reduce its stake in the oil giant. This quarter, Berkshire reduced its holdings significantly by 34.34% or 19,718,838 shares.  Its remaining share total was 29,711,330 at the end of the quarter.  Berkshire had been reducing its holdings of the oil company since Q4 2008.

XOM [Exxon Mobil Corp.]
– Interestingly, this was a new addition in 2009.  The Q2 SEC filing was amended to reveal 854,490 shares were purchased in its initial stake.  In Q3, 421,800 shares were purchased.  But in this quarter (Q4) Berkshire’s stake was reduced significantly by 66.95%, or 854,490 shares.  This brings the total holdings to 421,800 shares.

GCI [Gannett Inc.]
– Berkshire reduced its holdings of the media company by 36.12% or 1,245,400 shares, down to 2,202,200 shares total.  Gannett has interests in newspapers (including USA Today), TV, and the internet.

JNJ [Johnson & Johnson]
– Berkshire reduced its holdings of the diversified healthcare/pharmaceutical products manufacturer by 26.5% or 9,782,166 shares, down to a total of 27,132,467 shares.  It’s likely that this may be tied to freeing up capital to help pay for the railroad takeover.  In 2009 we saw large media & analyst “selling America” criticism when it was revealed for Q4 2008 that Berkshire reduced its stake considerably.  In both Q1 and Q2 2009, Berkshire added shares without making headlines.

IR [Ingersoll-Rand Company Ltd.]
– Shares in Ingersoll-Rand was reduced by 27.57% or 2,146,000, down to 5,636,600 shares total.  This is the same level the company held at the end of Q2 2008.

MCO [Moody’s Corp.]
– By the end of this quarter Q4, Berkshire had reduced its stake to a total of 31,814,610 shares.  Earlier filings in Q4 indicated that Berkshire has further reduced its holdings. Prior to the release of the Q4 filing it had 35,357,393 shares.
http://www.sec.gov/Archives/edgar/data/109694/000118143109055868/xslF345X03/rrd259207.xml
– Berkshire had been continually reducing its holdings in Moody’s since Q2 2009.  At the end of Q3, the 3rd quarter filing indicated that during the entire third quarter it sold 8,780,688 shares.

PG [Procter & Gamble Co.]
– Holdings of the consumer products manufacturer was reduced by 9.1% or 8,812,599 shares, down to 87,503,411 shares total.

UNH [UnitedHealth Group Inc.]
– The stake in the health insurer was reduced by 65.44% or 2,225,000 shares, to 1,175,000 shares total.

STI [SunTrust Banks Inc.]
– Berkshire reduced its holdings in this bank significantly by 50% or 1,541,572 shares, down to 1,538,206 shares.   In Q3 the holding was reduced by 3.90%, to a total of 3,079,778 shares.

WLP [WellPoint Inc.]
– For the 3rd time this year, Berkshire reduced its holdings in the health benefits company.  This time with a 3.175% reduction or 1,200,500 shares, down to 39,037,142 shares.  In Q3 Berkshire held 3,394,213 shares.  In Q2 it held 3,500,000 shares.
– On an interesting side note in 2007 when Buffett tripled its stake, speculators speculated that he might “might want to acquire WellPoint outright”.  At the time the stake represented less than 1% of the company.  When Buffett wants to acquire a company, he follows typical Buffett behaviour.  He usually talks about the company or industry quite frequently, and often publicly.  He also takes on huge positions or continually increases them to a very significant point (up to the 20% mark).  The last example was with the railroad, which followed his typical buy-out behaviour.  The book “The Snowball” has many examples of his buy out behaviour.

.

Sold Out:

NSC [Norfolk Southern Corp]
– At the end of Q4 Berkshire held 0 shares.

UNP [Union Pacific Corp.]
– At the end of Q4 Berkshire held 0 shares.

Although there were no changes were reported in the Q3 filing regarding the railroads, but Buffett had already sold them according to an interview on The Charlie Rose Show, that was broadcast on 11/13/2009.  He stated that Berkshire “done that just to facilitate the transaction”.  The change is reflected in the Q4 filing.

SEC Form 425 filed on 11/16/2009 containing statements from The Charlie Rose Show can be found here:
http://www.sec.gov/Archives/edgar/data/934612/000119312509235940/d425.htm

On 2/12/2010, Berkshire Hathaway announced that the Burlington Northern Santa Fe Corp (BNI) merger had closed, becoming a subsidiary of Berkshire.  The deal was Buffett’s largest acquisition for Berkshire Hathaway Inc.

.

SEC Filing:
You can view the 2/16/2010 SEC filing which discloses Berkshire Hathaway stock holdings here:
http://www.sec.gov/Archives/edgar/data/1067983/000095012310013409/v55243a1e13fvhrza.txt

The filing does not differentiate between investments Berkshire Hathaway makes and investments its subsidiaries make, or investments Warren Buffett himself makes as the chairman and chief executive of the company.  Buffet usually makes his stock investments for Berkshire Hathaway through his insurance arms (Berkshire Hathaway Life Insurance Co. of Nebraska, Columbia insurance Co, GEICO, National Indemnity Co, Wesco, etc.).

.

Learning To Invest Like Warren Buffett:

As usual, I remind all investors who are tracking Warren Buffett’s stock purchases/sales, that it is easy to blindly follow and copy his investment moves.  However, his actions are made public months after it has already been done (SEC filing is always later for Berkshire Hathaway), and the exact reason behind each move is unknown.

Buffett has always been a teacher at heart, like his own mentor Benjamin Graham.  But you don’t have to sit in a classroom to listen to his lectures.  He publishes them and makes them available to his shareholders in his company reports & letters, where he explains investment/business principles & knowledge.

Investment decisions depend largely on each investor’s plan, situation, temperament, knowledge, and other unique characteristics related to the individual. That is why each investor must learn, rather than blindly copy, in order to be successful.  Rather than copy Warren Buffett, an investor who follows him should have the goal of attaining the same knowledge, principles, & mindset that have made him successful. The investor should then incorporate those aspects, to become their own unique & successful investor.

Remember, Buffett wasn’t given money and was not always wealthy.  Make no mistake, he earned his money through hard work. When he was young he worked a paper route, and even at the local grocery store.  He also bought old pinball machines with his earnings, fixed them, and then rented them out for profit.  Buffett once also collected golf balls from water traps, cleaned them, and sold them in buckets at a discount.  None of these things are considered easy money.

Buffett recommends investors who want to learn, to read his current and past annual reports from the Berkshire Hathaway website. They have a huge amount of information in them.  He also suggests to read books that he specifically endorses & recommends. The following is list of those books:
Thanks & Happy Investing! — The Investment Blogger © 2010

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