Warren Buffett Quotes

Warren Buffett is almost as famous for his quotes and one-liners as for his investing - see this selection of Warren Buffett Quotes on Life

Saturday, 20 February 2010

Warren Buffett Buying Into Waste

Warren Buffett Stocks Update

Warren Buffett and Berkshire Hathaway have been surprisingly busy in recent months. They reduced their holdings in Procter & Gamble, Johnson & Johnson, ConocoPhillips and Exxon Mobil in Q4 2009. But why would they be doing that ? Warren Buffett has famously said the best period to hold shares is "forever".

Berkshire Hathaway filed documents with the SEC disclosing their latest moves and other changes to its U.S. stock portfolio at 31 December 2009. In addition to these sales, Warren Buffett decided to increase his stake in Becton Dickinson, Iron Mountain, Republic Services and Wells Fargo.

But Berkshire has also obtained permission from the SEC to not disclose some information in order to protect its trading strategy. This is apparently par for the course for Berkshire Hathaway when it is involved in significant investment changes. According to Berkshire the information it has kept back could be detrimental to it if it were to be known as the market likes to coattail Warren Buffett. This implies of course that Mr Buffett has not finished his trades.

They sold 8.8 M shares in P&G during Q4, but still have 87.5 million.

Berkshire bought over 8 million shares in J&J over the first half of 2009, then sold 9.8 million shares in Q4 meaning it held 27.1 million shares in the company at year end.

They reduced their holdings in both Exxon and ConocoPhillips down to 421,800 in Exxon and 37.7 million in ConocoPhillips (down from 1.3 million and 57.4 million respectively). If my memory serves me right this means Warren Buffett has sold 20 million shares in ConocoPhillips after buying them when oil prices had peaked at $140 a barrel.

They increased their stake in Republic Services, waste haulage, to 8.3 million shares from 3.6 million at the end of September.

They doubled their stake in Iron Mountain, a data- and document-storage company, to 7 million shares and increased their stake in Becton Dickinson to 1.5 million shares from 1.2 million.

In a separate filing in Tuesday they disclosed they held 342.2 million shares in Wells Fargo, 6.7% of the bank, which is 30 million more shares than they had a year ago.

So why has Warren Buffett been selling ? Well, one thing we can be sure of is that Warren Buffett never does anything without a reason. One theory is that he is raising cash for the Burlington Northern (BNI) transaction. He may also think the recession is coming to an end and is therefore selling defensives and buying companies that should do better in a good economy.

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