Berkshire Hathaway Inc. Chairman and CEO Warren Buffett
Scott Eells/Bloomberg
Berkshire Hathaway Inc. chairman and chief executive officer Warren Buffett.
Berkshire Hathaway Inc. chairman and chief executive officer Warren Buffett. Photographer: Scott Eells/Bloomberg
Aug. 16 (Bloomberg) — Bloomberg’s Olivia Sterns reports on Berkshire Hathaway Inc.’s recent stock purchases and Chief Executive Officer Warren Buffett’s call for higher taxes on the most wealthy Americans.
Buffett, 80, is spending on stocks and takeovers as near-record low interest rates limit returns in fixed income. Buffett spoke in an interview with Charlie Rose yesterday. Bloomberg’s Linzie Janis also speaks. (Interview excerpts. Source: Bloomberg)
Aug. 8 (Bloomberg) — Alice Schroeder, a Bloomberg View columnist and author of “The Snowball: Warren Buffett and the Business of Life,” discusses the change in the outlook for Berkshire Hathaway Inc.’s debt rating to negative from stable by Standard Poor’s and Buffett’s investment strategy.
Schroeder speaks with Tom Keene on Bloomberg Television’s “Surveillance Midday.” (Alice Schroeder is a Bloomberg View columnist. The opinions expressed are her own. Source: Bloomberg)
Warren Buffett’s Berkshire Hathaway
Inc. (BRK/A) increased its stake in Wells Fargo Co. (WFC), building equity
holdings amid a markets decline that the billionaire investor
said provided an opportunity for buying stocks “on sale.”
Buffett’s firm added 9.7 million shares of the biggest U.S.
home lender in the three months ended June 30, boosting the
holding by 2.8 percent, Omaha, Nebraska-based Berkshire said
yesterday in a filing that listed its U.S. stockholdings.
Berkshire accelerated purchases on Aug. 8 as the Standard
Poor’s 500 Index plunged 6.7 percent, its steepest decline since
December 2008.
“I like buying on sale,” Buffett, Berkshire’s chief
executive officer and head of investments, said in a television
interview with Charlie Rose to be broadcast on PBS. “Last
Monday, we spent more money in the stock market buying than any
day this year.”
Buffett, 80, is spending on stocks and takeovers as near-
record low interest rates limit returns in fixed income. Banks,
facing tighter regulation, can “still be plenty profitable,”
Buffett said last month. San Francisco-based Wells Fargo, which
counts Berkshire as its biggest shareholder, fell 12 percent in
the three months ended June 30 and has slipped 11 percent in the
current quarter.
The increase in the Wells Fargo stake cost Berkshire about
$277 million, assuming purchases came at the bank’s average
trading price for the second quarter of $28.53 a share.
Stay Tuned
“It looks to me that he couldn’t resist topping up,” said
Thomas Russo, a partner at Berkshire investor Gardner Russo
Gardner. “Stay tuned. If he liked it at the quarter’s end, and
he has as much cash as he had, there’s no reason to think he
might not have liked it more in the early half of August.”
Wells Fargo rose 89 cents, or 3.7 percent, to $25.02
yesterday in New York Stock Exchange composite trading, valuing
Berkshire’s stake at $8.8 billion. Wells Fargo, led by Chief
Executive Officer John Stumpf, has slid 19 percent since Dec.
31, better than the 25 percent decline in the KBW Bank Index.
Berkshire Class A shares have fallen 9.8 percent this year.
Berkshire added a stake in retailer Dollar General Corp. (DG) in
the second quarter and increased holdings in MasterCard Inc. (MA) by
88 percent. Buffett’s firm cut its stake in Kraft Foods Inc. by
about 5.5 percent to 99.5 million shares.
Buffett, Berkshire’s chairman and CEO, is reshaping the
equity portfolio with Todd Combs, who was hired as an investment
manager last year. Combs was assigned to oversee as much as $3
billion with a focus on equities and can make trades without
consulting Buffett. It was Combs, 40, who in the first quarter
added a stake in MasterCard, a firm that he had bet on while
managing hedge fund Castle Point Capital Management LLC.
Dollar General
The Dollar General stake, valued at about $48 million as of
yesterday, may also have been taken by Combs, said Russo, citing
the size relative to larger Buffett bets. The addition of
Goodlettsville, Tennessee-based Dollar General expands
Berkshire’s holdings of discount retailers. Buffett’s firm owns
stock in Wal-Mart Stores Inc. and Costco Wholesale Corp.
Berkshire’s Dollar General investment “is almost like a
bet on a declining economy,” said Mark Montagna, senior analyst
following retailers at Avondale Partners LLC.
Berkshire’s biggest holdings, including Wells Fargo and
Coca-Cola Co. (KO), have slipped in the last three weeks as global
equity markets retreated. Buffett has reiterated his view that
the U.S. would avoid a second recession in three years.
“Financial markets create their own dynamics, but I don’t
think we’re facing a double dip,” Buffett told Bloomberg
Television’s Betty Liu in an interview on Aug. 6.
Confidential Trades
Berkshire omitted information about its portfolio for the
second straight quarter. The U.S. Securities and Exchange
Commission sometimes allows companies to withhold data from the
public to limit copycat investing while a firm is building or
cutting a position.
Berkshire’s equity portfolio was valued at $67.6 billion as
of June 30, with 40 percent in consumer-products firms and 37
percent in financial companies such as banks and insurers. The
rest was in a group Berkshire labels “commercial, industrial
and other.”
Buffett agreed in March to spend $9 billion on engine
additives maker Lubrizol Corp., and this month offered to buy
reinsurer Transatlantic Holdings Inc. for about $3.25 billion.
Berkshire held $47.9 billion of cash as of June 30.
Yesterday’s filing by Berkshire includes U.S. holdings.
Equity investments abroad are reported to local regulators.
To contact the reporter on this story:
Andrew Frye in New York at
afrye@bloomberg.net.
To contact the editor responsible for this story:
Dan Kraut at dkraut2@bloomberg.net.