Last week, investors were greeted to a preview of the hotly anticipated Berkshire Hathaway shareholder letter.
In the missive, Chairman Warren Buffettexpressed his disinterest in gold, but also sang the praises of other investments he considers “productive assets,” of which he lumped companies, real estate, and farms.
With the release of his most recent 13F filing, it is apparent that Buffett has been putting his words into practice.
The doom and gloom that defined the second half of 2011 left many investors shaken and scouring for safe havens. Buffett, however, appeared unwavering.
Adopting a mindset similar to the one in 2008, the Nebraska native used the overcast market environment to his advantage and put a massive amount of cash to work. In the third quarter alone, the billionaire surprised fans with news that he had taken $24 billion off the sidelines — his largest expenditure in 15 years.
While initially coy about his purchases, investors soon learned that this cash was used to fund a variety of new investments including his uncharacteristic bet on tech giant, International Business Machines.
Uncertainty continued into the final three months of the year, as doubts swirled around troubled regions like the European Union. However, as we have now learned, Buffett spent the fourth quarter in a buying mood.
A number of current Berkshire Hathaway holdings received blessings, including CVS Caremark, Wells Fargo, DirecTV
Tech holdings Intel and IBM received some love, as well.
There were some newcomers, though, that seem to be more of a reflection the preferences of Buffett’s new hires than the Oracle of Omaha himself.
Two new companies were welcomed into the Berkshire ranks in late 2011: Davita and Liberty Media.
As The Wall Street Journal points out, these two names and DTV have been favorites of Ted Weschler, the Peninsula Capital Advisors managing partner-turned-Berkshire Hathaway newcomer.
Weschler wasn’t scheduled to officially join the ranks in Omaha until this start of this year. However, his influence already appeared to have had some impact on the legendary portfolio.
It is not unusual to see this type of adjustment. Following news that Todd Combs was joining Berkshire’s ranks, popular holdings from Comb’s Capital Point Capital, such as MasterCard, began to show up on the roster.
While Buffett's buying habits have dominated discussion in recent quarters, there was also some selling action taking place in the fourth quarter.
A number of longstanding positions, such as Nike, Bank of America, and Exxon Mobil were closed out entirely, while the investor’s stake in Johnson & Johnson was pared back.
Warren Buffett’s recent actions have made it strikingly clear that he is not concerned about near-term hiccups when building his portfolio. Given the strong performance we have seen during the opening weeks of 2012, it will be interesting to see if this shopping spree will continue.
In addition, investors should also have their sights set on the team of Weschler and Combs. This duo appears to taking an increasingly active role in the management of the Berkshire portfolio.
Shares of Berkshire Hathaway have continued to lag versus the broader Standard & Poor’s 500 .
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