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Warren Buffett Watch
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Warren Buffett's Berkshire Hathaway Adds to J&J, Wells Fargo, USB Stakes - But No Blockbuster Buys
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Even though Warren Buffett always says he likes stocks more when they're cheaper, he didn't do a lot of buying as Wall Street's major indexes fell to their bear-market lows (so far) in early March.
Buffett's Berkshire Hathaway has just released its first quarter stock portfolio snapshot, and there are no blockbuster buys or new names.
As he hinted during his live CNBC interview last week, Buffett may have "run out of gas" and decided to keep a substantial cash cushion rather than plunging into stocks.
While conceding that it is currently "among the more attractive" times to be an investor, he told Becky Quick that stocks were "far cheaper" in 1974 and 1975.
A few of Berkshire's stakes did, however, get larger.
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Buffett added to Berkshire's positions in Johnson & Johnson, Wells Fargo, US Bancorp, Norfolk Southern and Nalco Holding during the first three months of the year.
Berkshire's stake in J&J [JNJ
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] rebounded by 13.6 percent, or about four million shares, rising to 32.5 million as of March 31, compared to 28.6 million at the end of December.
The increase is especially interesting because the big news out of the fourth quarter portfolio filing was that Berkshire had cut its J&J stake by almost 54 percent between September 30 and December 31. (61.8 million shares vs. 28.6 million shares.)
The money helped fund Berkshire's $8 billion in loans to Goldman Sachs [GS
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] and General Electric [GE
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] last fall. Those preferred stock holdings are generating a hefty 10 percent annual return for Berkshire. That yield is not affected by price changes for GE or Goldman's common stock, although Berkshire could make an additional profit from "bonus" warrants that allow it to buy common stock in the future at pre-determined prices.
Buffett has been publicly praising Wells Fargo [WFC
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] and US Bancorp [USB
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] in recent weeks, and Berkshire did increase its holdings in the two banks during the first quarter. The Wells Fargo stake increased by about 12 million shares during the period, or 4.3 percent.
The US Bancorp stake is up by 2.2 percent, or 1.5 million shares to 69.0 million, but that's still below the 72.9 million shares reported for the end of last year's third quarter.
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Berkshire also increased its holdings in Union Pacific [UNP
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] by 7.3 percent to 9.6 million shares. No change for Norfolk Southern, another railroad in the portfolio, and a 9.5 percent increase for Burlington Northern [BNI
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] had already been reported in early February. (No change since then.)
Berkshire cut its Carmax [KMX
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] stake by almost a third, dropping over five million shares to 12 million by the end of the first quarter. That stock was added to the portfolio in 2007's third quarter.
UnitedHealth Group [UNH
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], had its stake slashed by almost 29 percent, falling to 4.5 million shares from 6.3 million shares.
Decreases for Constellation Energy [CEG
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] and ConocoPhillips [COP
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]had been previously reported by Berkshire.
Buffett has called his decision to buy Conoco stock last year a "major mistake" and one of the "dumb things" he did in 2008. Berkshire's first quarter earnings report says it has been selling millions of shares at a loss for tax purposes.
Data is a real-time snapshot *Data is delayed at least 15 minutes
