Last week it carried out the largest operation in the last two years, with the purchase of Alleghany insurer for $11.6 billion. After this acquisition, how is your portfolio?
The first thing to say is that Alleghany is a very small part of Berkshire Hathawaywhich has a combined market value of $530 billion. The operation is explained by Buffett’s affection for the insurance sector, reported the Spanish newspaper Cinco Días. Since the 1960s, the so-called “Oracle of Omaha” (because of the success of his investments) began to buy insurance companies. The conglomerate used the strong generation of cash from the collection of premiums to buy companies at knockdown prices.
In addition, Alleghany CEO Joe Brandon ran one of Buffett’s reinsurance subsidiaries. And he has put the Berkshire Hathaway management stamp on the insurer. On the other hand, Buffett has bought at a very good price. House brand.
But when looking at the current composition of Warren Buffett’s portfolio, one company stands out above all the rest: Apple.. The 91-year-old investor began buying shares of the iPhone maker in 2016Sorry I didn’t get in earlier. Since then, Berkshire Hathaway has purchased shares worth 31,089 million dollars. But the revaluation of Apple has been so spectacular that the stake in the apple company is already worth 161,000 million dollars.
In consecuense, In Berkshire Hathaway’s investee portfolio, the weight of Apple is enormous, already close to 50% of the total. Never in his career as an investor had Buffett been so focused on a stock. Now Apple’s third largest shareholder, behind only two asset management giants, BlackRock and Vanguard.
OTHER BERKSHIRE HATHAWAY POSITIONS
Insurance. It controls the insurer Geico (the second largest auto insurance company in the US), Gen Re (specializing in reinsurance, but also with life policies) and NRG (reinsurer in the Netherlands).
Consumption. It also owns the battery manufacturer Duracell; Fruit of the Loom clothing store; Helzberg Diamonds jewelry stores; carpet manufacturer Shaw Industries; the Dairy Queen fast food and ice cream chain; the railway operator Burlington Northern Santa Fe and the chemical company Lubrizol.
Cash. It has 144,000 million dollars of liquidity.
As for the rest of the portfolio, the main stocks are also highly concentrated. 13.6% is Bank of America. The Omaha investor became a shareholder in 2011, when the company’s shares were badly depreciated by the Lehman Brother financial crisis. It also maintains smaller investments in other US banks such as Bank of New York Mellon or US Bancorp, together with the credit rating agency Moody’s.
Among Buffett’s major holdings, two of the oldest are Coca-Cola Company and American Express, which he has maintained for more than 20 years. Between the two they add up to 15% of the portfolio. Somewhat less ancient Kraft Heinz (2013) and it is one of the few Buffett bets now trading below the bid price.
Buffett and his right hand man, Charlie Munger (98 years old) they have always had a fondness for American companies. In addition to those mentioned, they also have shares in General Motors, Chevron, Procter & Gamble, Johnson & Johnson… However, in recent years, the tandem of nonagenarians has begun a timid geographic diversification of Berkshire Hathaway’s investments.
In the summer of 2020, Buffett announced to the market the acquisition of shares of five of Japan’s largest financial conglomerates (Itochu, Marubeni, Mitsubishi, Mitsui & Co, and Sumitomo). He took 5% of the capital of each of them. Patiently and discreetly, over 12 months. The initial investment was just over 6,000 million dollars, and with good returns during the first months.
Earlier, in 2008, Buffett decided to invest in a Chinese company that manufactured electric cars, BYD. Over the years, the participation increased and it already controls 8% of that conglomerate. The numbers of the play that he has given are incredible. The acquisition cost of the shares was 248 million dollars. Now they are worth 40 times more, close to 10,000 million dollars.
Source: Ambito
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