Warren Buffett

Warren Buffett

Last Update: 02-15-2017

Number of Stocks: 47
Number of New Stocks: 3

Total Value: $147,985 Mil
Q/Q Turnover: 10%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Warren Buffett Watch

  • What Makes a Stock Risky?

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  • What Makes You Put a Stock in the 'Too Hard' Pile?

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  • Warren Buffett on Airlines, ETFs and Bank Valuation

    Two days after sharing his Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) shareholder letter with the world, Warren Buffett (Trades, Portfolio) spoke with CNBC's Becky Quick in a broad-ranging interview.

    In their Monday morning conversation, Buffett discussed some of investors' most pressing and questions based on his recent comments and stock choices: his pro-ETF stance, why he is buying airlines and how he values banks.  


  • Warren Buffett Comments on Bank of America

    Excluded from the table – but important – is our ownership of $5 billion of preferred stock issued by Bank of America (NYSE:BAC). This stock, which pays us $300 million per year, also carries with it a valuable warrant allowing Berkshire to purchase 700 million common shares of Bank of America for $5 billion at any time before September 2, 2021. At yearend, that privilege would have delivered us a profit of $10.5 billion. If it wishes, Berkshire can use its preferred shares to satisfy the $5 billion cost of exercising the warrant.


    If the dividend rate on Bank of America common stock – now 30 cents annually – should rise above 44 cents before 2021, we would anticipate making a cashless exchange of our preferred into common. If the common dividend remains below 44 cents, it is highly probable that we will exercise the warrant immediately before it expires.

      


  • Are You Wasting Money on Walmart?

    The press likes to say that Warren Buffett is a hold-forever investor, but in his 2016 letter, Buffett specifically addresses this misinterpretation.


      


  • Warren Buffett's 2016 Annual Shareholder Letter - Part 2

    “The Bet” (or how your money finds its way to Wall Street)


    In this section, you will encounter, early on, the story of an investment bet I made nine years ago and, next, some strong opinions I have about investing. As a starter, though, I want to briefly describe Long Bets, a unique establishment that played a role in the bet.

      


  • Key Takeaways from the Latest Warren Buffett Shareholder Letter

    This morning Warren Buffett (Trades, Portfolio) released his 2016 shareholder letter. To read the complete letter, please go here. These are the takeaways by Dr. Charlie Tian, the founder of GuruFocus.com. Most of the texts are excerpts from the shareholder letter.

    Book Value:  


  • Warren Buffett's 2016 Annual Shareholder Letter - Part 1

    To the Shareholders of Berkshire Hathaway Inc.:


    Berkshire (NYSE:BRK.A)(NYSE:BRK.B)’s gain in net worth during 2016 was $27.5 billion, which increased the per-share book value of both our Class A and Class B stock by 10.7%. Over the last 52 years (that is, since present management took over), per-share book value has grown from $19 to $172,108, a rate of 19% compounded annually.*

      


  • Some Highlights From Warren Buffett’s Annual Letter 2016

    “Money is always there, but the pockets change.” Gertrude Stein 


    Interesting quotes

      


  • Tech Most Popular Sector for Investment Fund Managers in 2017

    Data show that Silicon Valley darlings once again captured the interest of stock fund managers looking to cash in on the sector’s growth and dreams in the fourth quarter of 2016.


    In a ranking of the 20 S&P 500 stocks that U.S. funds managing more than $1 million bought the most, tech companies took eight spots: Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Cisco (NASDAQ:CSCO), Alphabet (NASDAQ:GOOG) and Intel (NASDAQ:INTC). Microsoft and Apple also saw the most buying in the S&P 500, according to data compiled by GuruFocus.

      


  • How to Brainstorm Stock Ideas

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  • How to Not Lose Everything When Buying Micro-Caps

    The majority of the world’s most famous investors made their name investing in small-cap and micro-cap stocks. These are the best sectors to generate outperformance in the markets because it is in these regions where the opportunity to find mispriced securities is greatest. Most Wall Street analysts do not cover micro-cap stocks, and most investors avoid stocks with a tiny market capitalization because of the risks involved.


    Still, it is very easy to find value in these parts of the market. Most micro-caps have little to no news coverage, so to gain any information, investors have to search SEC filings and really spend time conducting due diligence on the company.

      


  • Don't Do It, Buffett

    On Wednesday, Morgan Stanley analysts said Berkshire Hathaway's (NYSE:BRK.A)(NYSE:BRK.B) full-scale acquisition of an airline is a possibility, especially if the stocks weaken.


    Last week, Charlie Munger (Trades, Portfolio) spoke about airlines in terms of the railroad industry.

      


  • 2 Arbitrage Ideas From Warren Buffett and Seth Klarman

    It does not seem as if legendary value investor Seth Klarman (Trades, Portfolio), founder of the Baupost Group, is very confident about the seemingly incessant rise in U.S. stock markets. That puts him at odds with Warren Buffett (Trades, Portfolio), who seems as confident as ever in American markets.


    In his recent letter, Klarman notes the markets are currently at "perilously high valuations." Driving these valuations were "exuberant investors" who have "focused on the potential benefits of stimulative tax cuts, while mostly ignoring the risks from America-first protectionism and the erection of new trade barriers." He believes the current political climate may "drive government deficits considerably higher," potentially proving “quite inflationary, which would likely shock investors.”

      


  • Revisiting My Walmart Thesis

    I started writing articles about Walmart (WMT) in early 2014. I disclosed my initial investment in the company shortly thereafter (link). In the three years since that was published, Walmart stock has treaded water. Relative to the Standard & Poor's 500, which has increased by ~30% over the same period, this investment has performed quite poorly.


    Personally, I’m less concerned with the price performance of a stock (particularly over a few years) than I am with the quality of the decision-making that led to the investment (process over outcomes). This article will revisit the thesis published in February 2014 to determine if errors in my analysis explain the poor returns reported thus far.

      


  • Coca-Cola: Buy at $38 or if Sales Growth Tops 3.5%

    Demographic shifts, changing consumer preferences and dietary trends have led us to re-evaluate the strength of Coca-Cola’s (NYSE:KO) competitive advantage. Putting it in simplest terms, today’s consumer group is far more health conscious than ever before, and this is hurting the company’s bottom line. Millennials want healthier, more unique and sometimes more refined food and drink options – and Coca-Cola is taking its sweet time getting into the game.


    Coke won the “Pepsi (NYSE:PEP) vs. Coke” challenge a long time ago. This was an easy win as Coke has become synonymous with cola flavoured soda drinks. Despite this fact, however, it certainly doesn’t make Coca-Cola a more valuable company or a better stock investment than Pepsi. Pepsi is actually a more diversified company than Coca-Cola with its Frito-Lay food business and has put in some more robust growth numbers over the last few years.

      


  • Can Snap Decisions Ever Be Good Decisions?

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  • Buy the Dip?

    (Published Feb. 21 by Bob Ciura)


    American International Group (NYSE:AIG) stock tanked 9% on Feb. 15 after posting a huge $3 billion net loss for the fourth quarter.

      


  • Our Place in This World

    At a recent industry conference, we were confronted by a chart, a presentation and a song. In early 2017, we find ourselves in an investment world where the merit of stock picking and "active" portfolio management are challenged regularly, which has contributed to a mass exodus of assets from "active" funds to low-cost index portfolios. Is there a place in this world for long-duration, concentrated portfolio management as practiced by Smead Capital Management?


    The chart below came from Richard Bernstein Advisors and simply shows how poorly the average investor has done in relation to almost all the investable asset classes (1):

      


  • Charlie Munger Is Worried About American Express; Should You Be?

    One of Warren Buffett (Trades, Portfolio)’s largest legacy positions is American Express (NYSE:AXP). He has stated his commitment to the business many times since he started buying the stock after the massive salad oil scandal that nearly broke the company.


    In the past few years, American Express’ business moat has started to erode as new competitors start to enter the sector, and more payments move online. With the cost of card processing declining with this shift, fewer and fewer merchants are willing to pay American Express’ hefty charges to be part of the network.

      


  • Beware Margin-Declining Wal-Mart

    During fiscal fourth-quarter 2016, Wal-Mart Stores Inc. (NYSE:WMT) reported net sales of $31 billion and diluted earnings per share of $1.22. Net sales dropped 5.1% from the prior-year quarter, contributing to lower profit margins. As the company exhibits declining operating margins over the past five years, Wal-Mart is a potential value trap.


    Company reports modest Q4 and full fiscal 2017 performance

      


  • Buying a Good Business in a Bad Industry

    Someone emailed me this question:


    “How do you feel about good businesses in poor industries? Are there any industries that you just won’t even consider?”

      


  • When Historical Price Multiples Don’t Matter Anymore

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  • This Guru Loves Valeant; Should You?

    Hedge funds’ final 13F forms for 2016 were published last week, and as usual, the data has been scrutinized by the financial media. There were a few surprises in the figures, including Warren Buffett (TradesPortfolio)'s new favorite position, Apple (NASDAQ:AAPL), and the general rotation away from tech toward financials.


    One position change that stands out, however, is not Buffett’s move but that of Francis Chou (Trades, Portfolio). Chou’s Chou Associates is a traditional value fund, and Chou is well known in the value community for his investing style.

      


  • Kraft Heinz Is Value Stock Picking With Unilever

    We wrote about Unilver NV (NYSE:UN)(NYSE:UL) and what a bargain the stock was back in November. At the time, the stock was $39.06. The stock recently popped to $48.41 (52-week high) after Kraft Heinz Co.'s (NASDAQ:KHC) offer. That is a 23.9% return.


    Unilever's revenue was $49.8 billion in 2013, $48.44 billion in 2014 and $53.27 billion in 2015. Earnings per share were $1.66, $1.79 and $1.72 over that same time frame. Operating margins are 14.29%. Free cash flow was $7.33 billion last year, and the free cash flow yield is 6.6%. That is a pretty reasonable price to yield. Much of the free cash flow is paid out as a dividend. Its debt is rated in the A range by the rating agencies.

      


  • Warren Buffett’s Market Indicator Reaches 130%

    On Feb. 17, 2017, the U.S. total market cap / gross domestic product ratio reached 130%, a critical milestone as valuations remain significantly overvalued. Most of Warren Buffett (Trades, Portfolio)’s portfolio holdings as of Dec. 31, 2016, have price-sales valuations greater than the 80th percentile of the industry. Such companies include The Coca-Cola Co. (NYSE:KO), International Business Machines Corp. (NYSE:IBM), Delta Air Lines Inc. (NYSE:DAL), Apple Inc. (NASDAQ:AAPL) and Southwest Airlines Co. (NYSE:LUV).


    Buffett indicator reaches critical milestone

      


  • EAT DIN(ner) With These 2 Restaurant Stocks

    As we are reaching new highs on the Dow and S&P 500, some companies still cannot catch the tide. Two in particular are Brinker International Inc. (NYSE:EAT), which is down 17% since the election, and DineEquity Inc. (NYSE:DIN), which is off over 21% in the same time.


    For some background, Brinker International is the owner Chili’s and Maggiano’s restaurants with over 1,600 locations. DineEquity owns Applebee's and the International House of Pancakes and has over 3,700 locations across the brand. Make no mistake about it, both are brands. That is why the recent drop in the two companies’ stock price is more of a buying opportunity than a value trap.

      


  • Andreas Halvorsen Gains 4 Positions in 4th Quarter

    Andreas Halvorsen (Trades, Portfolio), a former managing director of Julian Robertson (Trades, Portfolio)’s Tiger Management Fund, founded Viking Global Investors LP in 1999 and currently serves as the hedge fund’s chief investment officer. During fourth-quarter 2016, the guru gained a position in Deere & Co. (NYSE:DE), one of Warren Buffett (Trades, Portfolio)’s major sells for the quarter. Halvorsen also gained positions in Dow Chemical Co. (NYSE:DOW), UnitedHealth Group Inc. (NYSE:UNH) and Twenty-First Century Fox Inc. (NASDAQ:FOXA).


    Deere & Co.

      


  • Francis Chou Adds to Valeant, Trims Sears in 4th Quarter

    Francis Chou (Trades, Portfolio), founder of Chou Associates Management, started an investment club in 1981 with six of his fellow telephone repairman. Throughout the next five years, Chou worked as a retail analyst at GW Asset Management where he met “Canadian Warren Buffett (Trades, Portfolio)” Prem Watsa (Trades, Portfolio). The successful guru established his flagship fund, the Chou Associate Fund, in 1986. On an annual basis, Chou’s fund outperformed the Standard & Poor’s 500 index benchmark by approximately 7% on average from 1986 to 2010.


    Chou invests in companies with a value-oriented approach involving a detailed analysis of the strengths of companies, especially in regard to the balance sheet, cash flow characteristics, profitability, industry position, special strengths, future growth potential and management ability. During fourth-quarter 2016, the Chou Associates Fund manager expanded his position in Valeant Pharmaceuticals International Inc. (NYSE:VRX) and trimmed his position in Sears Holdings Inc. (NASDAQ:SHLD).

      


  • Alaska Air Group Could Be a Buffett-Munger Stock

    2016 was quite a year for Alaska Air Group Inc. (NYSE:ALK). Not only did it have strong operating and financial results, but it also completed a $4 billion acquisition of Virgin America (VA), increased its dividend by 9%, bought back 1.5% of its shares and paid $100 million in bonuses to its employees. Is this really an airline?


    Investors looking for capital gains would be at least relieved and perhaps pleased. During 2016, the stock fell from $81.44 on Jan.1 to $55.66 on June 27, then turned around and rallied to close out the year at $88.73.

      


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