With the 13F reports, we continue our quarterly summary of the portfolios of the largest funds from the United States. The next report was presented by none other than Warren Buffett himself and his Berkshire Hathaway fund (BerkshireHa). So let's check out how he invested in Q4 2022?
Warren Buffett's investment strategy
Warren Buffett, also known as the 'Oracle of Omaha', is an internationally recognised American investor and philanthropist, born in 1930 in Omaha, Nebraska. He is currently ranked the 5th richest person in the world by the Bloomberg website.
The owner of assets estimated at more than US$100 billion is known for his long-term investment strategy, which focuses on finding companies with good brand names, good management, stable growth prospects and long-term earnings potential. He usually chooses companies that he has come to know very well and is therefore able to accurately assess their value, prospects and risks.
However, Buffett is also characterised by his approach to investing in companies that he considers undervalued. Unlike many other investors who make investment decisions based on short-term market trends and cycles, Buffett prefers to invest in companies that he considers undervalued by the market, but that have solid fundamentals and long-term growth prospects. His average holding period for a company in a portfolio is as long as 17 years. Currently, however, Buffett seems to be investing not like... Buffett.
Source: Conotoxia MT5, BerkshireHa, Daily
What was Warren Buffett buying?
In Q4 2022, the Berkshire Hathaway fund increased its position in three stocks it already owned and significantly reduced its position in eight more stocks. It made its largest purchase on Louisiana-Pacific Corporation (LP), which specialises in fiberboard and raw and processed wood planks. This company also offers thermal insulation solutions, roofing systems and other building materials. Buffett increased the position by 21% and it now accounts for 0.14% of the portfolio value.
The second largest acquisition was the US media corporation that produces and distributes films, TV shows and digital content, Paramount Global (Paramount). The company is one of the largest producers and distributors of films in the world, and has a number of popular TV stations such as CBS, MTV, Comedy Central, Nickelodeon and BET. The corporation also produces and distributes digital content, including video games and streaming, through its ViacomCBS Networks International and Paramount+ platforms. The billionaire increased its position in it by 2.6% and it now accounts for 0.53% of the portfolio value.
Source: Paramount. Daily
Buffett's fund also symbolically increased its position in Apple (Apple) shares, which is the largest position in his portfolio, accounting for as much as 38.9%.
Buffett stopped investing like …Buffett?
Long-term holding of companies seems to have become a thing of the past in Buffett's investment strategy. The largest sale in Q4 last year was of shares in U.S.Bancorp, one of the largest banks in the United States. The investor reduced his position by 91% and it now represents 0.1% of the portfolio value.
Source: Conotoxia MT5, USBcorp, Daily
The biggest surprise, however, appears to be the sale of shares in one of the world's largest semiconductor manufacturers, Taiwan Semiconductor (TaiwanSemic). It sold 86% of the shares in this company, which it had bought only a quarter earlier. The company currently still accounts for 0.21% of the portfolio value. In after-hours trading, shares of this company are down 6%.
Source: Conotoxia MT5, TaiwanSemic, Daily
The latest major sale made by Berkshire Hathaway is the divestment of 59% of Bank of New York Mellon Corp. (BNYMellon), which is another large US bank. It now represents 0.38% of the value of the fund's investment portfolio.
To add to this, we saw another reduction in the shares of Activision Blizzard (Blizzard), which is one of the largest game developers that Microsoft (Microsoft) is trying to acquire.
Source: Conotoxia MT5, BNYMellon, Daily
Grzegorz Dróżdż, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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