Warren Buffett is one of the greatest value investors of all time. In this video, we take a look at his most recent stock portfolio within Berkshire Hathaway and analyze one of his newest investments. Subscribe here for more content: http://bit.ly/SubscribeMichaelJay

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When viewing Warren Buffett’s stock investments within Berkshire Hathaway, it is important to understand his investment strategy. Buffett is primarily looking for quality companies he can buy and hold for the long term. Holding stocks for long periods of time (his favorite holding period is forever) allows for the investment to compound significantly over years and decades. Coca-Cola (stock: KO) and American Express (stock: AXP) are two examples of stocks he has held for several decades.

Also, when hearing about changes to Berkshire Hathaway’s stock portfolio, know that Buffett isn’t the only one making changes. While Buffett is the primary one involved in large deals ($5B+), he has two independent investment managers who have authority to buy and sell stock without consulting Warren about it. Tod Combs and Ted Weschler collectively manage about $13 billion or about 5% of the total equity investments in the portfolio. If you see changes to the portfolio of $1 billion or less, odds are Tod or Ted may have been the one making this decision.

As for changes in the most recent 13F filing for Berkshire Hathaway, a couple positions saw meaningful selling (WFC, GS), some saw minor trimming (AAPL, BAC, BK), and there were three new stocks added to the portfolio this quarter (KR, BIIB, VOO).

We will be discussing Kroger (KR stock) more in depth in this video and analyzing the potential future return of the stock with a stock valuation model.

As a Berkshire Hathaway shareholder, I have mixed feelings about the increasing cash pile in the portfolio (currently $128B as of Sept. 30, 2019). On one hand, this provides ample opportunity to buy back stock, buy stock in other companies, or buyout a company entirely in the event of an attractive valuation on the business. On the other hand, having significant cash excess has been a drag on the portfolio returns. In hindsight, the cash would have been better off invested in an index fund or (my preference) used to buy back stock more liberally.

At this point though, given market valuations, a large cash pile will likely be a valuable asset if we again experience another more severe market correction or eventual economic slowdown.

What are your thoughts about Warren Buffett’s stock investments within Berkshire Hathaway?


DISCLAIMER: This video is a resource for educational and general informational purposes and does not constitute actual financial advice. No one should make any investment decision without first consulting his or her own financial advisor and/or conducting his or her own research and due diligence. There is no guarantee or other promise as to any results that may be obtained from using this content. Investing of any kind involves risk and your investments may lose value.

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Michael Jay - Value Investing