It looks like Buffett or one of his other portfolio managers (i.e.
Todd Combs) took a small stake in Mastercard according to Berkshire's newest filing. Buffett also asked the SEC to allow him to postpone filing some other purchase(s) which he does frequently. I like to speculate and wonder what company Buffett would like to own next. After committing to the Lubrizoil acquisition his so-called "Elephant Gun" ($30 to 40 Billion target) is reduced to a "Zebra Gun" ($10 to $20 Billion target). Buffett's approach to stock investing is to act as if he was buying the whole company. He learned this approach from his mentor, Ben Graham. He often says that he would love to own all of any of the companies in his stock portfolio. Unfortunately most have market caps larger than his current "gun" would allow him to take down. Kraft was close but escaped with the Cadbury purchase that took its market cap out of the buyout range. Buffett loves food companies with strong brands. Strong consumer brand loyalty and what he calls "mind share". Additionally, Buffett thinks we may have inflation on the horizon and these are generally/historically good inflation hedges.
So, no Kraft and this after missing out on Anheuser Busch to InBev. I was just thinking that maybe he might be interested in a smaller Kraft so too speak, but a company with great brands like Campbell Soup. Great company and a market cap that he could more than digest. Share price had been underperforming until just lately as investors worry about Campbells ability to pass on higher input costs to consumers and possible competition from store brands. Of course management of CPB have been exercising options and selling the shares in the stock. Thus, they think it must be over valued and would be hard pressed to argue any buyout was too cheap. Management always seems to buy and sell at the wrong time. I think that is a mistake and Buffett might as well. Buffett likes to say that your best inflation hedge is being the best at what you make or serve. Campbells is a leader in its segment. I think it fits well within his target view. Of course, I would say that Kelloggs does as well for that matter. I think Buffett will continue to focus on food companies.
Just a thought any comments greatly appreciated. Happy investing to all!!!
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The primary reason that MasterCard got cheap is because of a particular amendment made to the Dodd Frank Act to regulate the interchange fees for debit transactions (called the Durbin Amendment). Mr. Market reacted to this regulation in its usual overly depressive manner offering a great opportunity to own a phenomenal wealth compounding machine at a ridiculous price.
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