Q4 2008 13F

[snailslug]

http://www.sec.gov/Archives/edgar/data/1067983/000095013409003064/v51307e13fvhr.txt

 

sold a lot of JNJ (about $2bn?)

 

otherwise not a lot of changes other than adding BNI which we already knew

[Parsad]

I would expect there is probably at least a couple of positions Buffett is/has bought that are confidential at the moment.  I'm almost certain he has been buying more GE stock and Wells Fargo.  Cheers!

[Guest JackRiver]

Bang on job by the boobs at CNBC in reporting the COP position.  Can someone else confirm that CNBC got it wrong?

 

Yours

 

Jack River

[Mungerish]

"I would expect there is probably at least a couple of positions Buffett is/has bought that are confidential at the moment.  I'm almost certain he has been buying more GE stock and Wells Fargo.  Cheers!" SP

 

Sanjeev,

Why do you feel so striongly that he has been buying WFC?

I kow he bought it last summer for his personal account, but I believe he sold it based upon the NYT Op Ed piece

Cheers

Ish

[Guest JackRiver]

Sorry, I just realized that most of you are probably at work, but after the close CNBC (TV) reported Buffett (Berkshire) as only having 4 million COP shares.  It looks like the girl mixed up the market value in thousands with the share count.  I own a lot of COP at 45 avg cost and am glad to hold it at that price, but I'll admit, she gave me one hell of a scare.

 

Yours

 

Jack River

[Parsad]

Sanjeev,

Why do you feel so striongly that he has been buying WFC?

I kow he bought it last summer for his personal account, but I believe he sold it based upon the NYT Op Ed piece

Cheers

Ish

 

It's just a no-brainer!  As is GE.  There's two of your twenty life-time punches smacking you in the face right now.  You don't need Buffett, Watsa, Pabrai, or the MPIC Funds.  I haven't had two ideas this cheap since Fairfax was below $100/share, and at that time Fairfax deserved to be cheap.  These are two market leaders that will increase their share for the forseeable future.  They have huge competitive advantages that will not be surpassed over the next decade or two.  Buy it and just put it away!  

 

In regards to WFC, Berkshire filed an amendment a few minutes ago, so that answers that question...they've added shares, and I'm certain they will add considerably more at these prices, as long as they don't face any restrictions.  Virtually every Berkshire subsidiary pension trust now owns Wells Fargo stock!  

 

http://www.sec.gov/Archives/edgar/data/72971/000119312509031272/dsc13ga.htm

 

I bet you will see a filing for GE in the next few months if not sooner.  GE will never be at these prices again in our lifetime!  Absolutely ridiculous!  Cheers!

[Mungerish]

Thanks for the update

I was getting a little nervous b/c Whitney Tilson  reminded us at CIMA last Friday that he is short WFC. He considers them "a denier"  ;D

 

Actually, I own WFC and USB here in the teens so I was hoping to see them buying more.

I also own WSC which has a considerable poistion in WFC based upon holdings

[Guest dempster]

Changes are as follows for holdings that appear in the Sept and Dec 13F

 

31-Dec-08 30-Sep-08 Net Change % change

American Express 151,610,700 151,610,700 0

Bank of America 5,000,000 5,000,000 0

BNI 70,089,829 63,785,418 6,304,411 9.9%

CarMax 17,636,500 18,444,100 -807,600 -4.4%

Coca Cola 200,000,000 200,000,000 0

Comcast 12,000,000 12,000,000 0

Comdisco 1,538,377 1,538,377 0

ConocoPhillips 79,896,273 83,955,800 -4,059,527 -4.8%

Costco 5,254,000 5,254,000 0

Eaton 3,200,000 2,908,700 291,300 10.0%

Gannett 3,447,600 3,447,600 0

GE 7,777,900 7,777,900 0

GlaxoSmithKline 1,510,500 1,510,500 0

Home Depot 3,700,000 3,700,000 0

Ingersoll-Rand 7,782,600 5,636,600 2,146,000 38.1%

Iron Mountain 3,372,200 3,372,200 0

Johnson & Johnson 28,611,591 61,754,448 -33,142,857 -53.7%

Kraft Foods 138,272,500 138,272,500 0

Loews 6,500,000 6,500,000 0

M&T Bank 6,715,060 6,715,060 0

Moody's 48,000,000 48,000,000 0

NRG 7,200,000 5,000,000 2,200,000 44.0%

Nike 7,641,000 7,641,000 0

Norfolk Southern 1,933,000 1,933,000 0

PG 96,316,010 105,847,000 -9,530,990 -9.0%

Sanofi Aventis 3,903,933 3,903,933 0

Sun Trust 3,204,600 3,204,600 0

Torchmark 2,823,879 2,823,879 0

US Bancorp 67,551,426 72,937,126 -5,385,700 -7.4%

USG 17,072,192 17,072,192 0

Union Pacific 8,906,000 8,906,000 0

UPS 1,429,200 1,429,200 0

United Health 6,300,000 6,379,900 -79,900 -1.3%

Wabco 2,700,000 2,700,000 0

Wal-Mart 19,944,300 19,944,300 0

Washington Post 1,727,765 1,727,765 0

Wells Fargo 290,244,868 290,407,668 -162,800 -0.1%

Well Point 4,777,300 4,777,300 0

Wesco 5,703,087 5,703,087 0

[Mungerish]

So what is the difference btwn the WFC 13g/A referenced above and also filed today which lists a total of 314,632,068 shares of Common Stock  and the  290,408,000 in the 13hf?

Warrens personal account?

Difference in filing requirements for pension plans?     

 

[dowfin1]

but I believe he sold it based upon the NYT Op Ed piece

 

 

What piece is this?  I must have missed it.

[Mungerish]

In June or July Becky Quick confirmed he had been buying WFC versus AXP for his personal account.

 

Here in the article he says he was 100% in cash.

WFC had roughy doubled in between

http://www.nytimes.com/2008/10/17/opinion/17buffett.html

 

 

 

[dowfin1]

Mungerish,

 

Thanks. 

 

The Becky Quick interview was on Oct 3, 2008 and the op-ed peice was dated Oct 17 where WEB says he's starting to buy domestic shares.  On Oct. 3 WEB says he bought WFC when it dropped around the low 20s  which happened during a short window in mid-July 2008 according to the chart. 

 

My reading of the 13g/a is that as of 12-31-08 WEB personally owns 2,240,000 WFC shares based on his sole voting authority.

[Mungerish]

The BQ interview I was referencing was actually 8/22/08 (I just pulled the transcript of my LT)

"THIS IS PART ONE OF "THREE HOURS WITH WARREN BUFFETT - LIVE FROM OMAHA" ON CNBC'S SQUAWK BOX WITH BECKY QUICK, FRIDAY, AUGUST 22, 2008

QUICK: American Express, Wells Fargo, those are two of your big holdings...

BUFFETT: Right.

QUICK: ...in the financial arena. If you see prices come down and something you've already decided you like this business, if the prices come down, do you buy more?

BUFFETT: Sure.

QUICK: Are you buying more?

BUFFETT: Well, I bought more of one of those, you know, in recent--in recent months.

QUICK: Either American Express or Wells Fargo?

BUFFETT: Now you've got it narrowed down. They--incidentally, both of those companies were started by the same guy, as I--Wells and Fargo started American Express."

Cheers

 

[Parsad]

Thanks for the update

I was getting a little nervous b/c Whitney Tilson  reminded us at CIMA last Friday that he is short WFC. He considers them "a denier"  ;D

 

Actually, I own WFC and USB here in the teens so I was hoping to see them buying more.

I also own WSC which has a considerable poistion in WFC based upon holdings

 

Well Whitney may be correct to a degree.  Wells Fargo won't completely avoid fallout, nor will their stock stay up if the entire sector is brutally hammered.  But market price is very different than a business going under...Fairfax is a perfectly good example of that, and also one that Whitney shorted.

 

If you look at the entire banking sector, Wells will get hit on occasion as other companies and the economy suffer, but they will be one of the few left standing in an industry where enormous consolidation will occur over the next few years.  The other thing about Wells is the their management, and their ability to cross-sell to their clients.  No customer for any other bank uses as many company products.  The average is like 2.6 industry-wide, while Wells Fargo customer's is 5.6. 

 

Their clients are locked in.  They use too many products and get too many deals by using them to go to another bank.  That ability to cross-sell, combined with their ability to weather the storm, will allow Wells to increase market share.  And they are already doing so, as customers from other banks flee to them.  But that doesn't mean the stock won't continue to get hammered or suffer some losses from different markets like California or Texas.  Our only concern should be what their actual results are long-term, and do they have the ability to weather this storm.  Buffett seems to think so.  Cheers!   

[alertmeipp]

I agree WFC is cheap (and I got some at 20% above the current price).

The confusing part is actual the US Gov. They seems can't make up their minds on the banking system. The coming mortgage cramdown thing for one is totally non-sense.

Leave WFC/USB alone, I am confidence it will survive and prosper. But with the ever-changing gov intervene, I am not so sure.

 

I would rather buy GE/AXP/MFC.

[Investmentacct]

We thought after 1999 experience, Cramer would not make these kind of comments again. But here we go again.

Good fun.

 

http://www.cnbc.com/id/29246565/site/14081545?__source=yahoo|headline|quote|text|&par=yahoo

 

 

[valueguy31]

We thought after 1999 experience, Cramer would not make these kind of comments again. But here we go again.

Good fun.

 

http://www.cnbc.com/id/29246565/site/14081545?__source=yahoo|headline|quote|text|&par=yahoo

 

 

 

Watched that tonight and chuckled a bit. No matter what the state of WEB's age, mind, or health, I pity the fool making any kind of call on him. Solely for television audiences.

[dowfin1]

Here is the 10-03 follow-up interview:

 

 

FRIDAY, 3 OCT 2008 CNBC

 

BECKY: You know, we were all caught off guard this morning by the

Wells Fargo bid to take over Wachovia. How did that come about?

 

BUFFETT: Well, as I understand it, there was something in the tax

bill, actually, that may have been passed Monday, which, in effect,

made the deal more attractive. And the Wachovia shareholders are

going to get the benefit of the fact that that tax situation changed.

They're going to get a lot more money than they would have gotten if

that tax bill hadn't passed.

 

BECKY: Obviously though, Citigroup a little unhappy with how this all

came out. Charlie Gasparino has been reporting today that Citigroup

officials just found out about this last night at about two o'clock

in the morning. They are claiming that they had the FDIC backing on

some of this. Where do you see this coming down?

 

BUFFETT: Well, I don't know the answer to that. I don't know all the

technicalities. I know it's a better deal, obviously, for the

Wachovia shareholders. And I know that there is no company, there's

no banking institution, during the last six months, that has done a

better job for its holders, for its depositors, and for its

borrowers, than Wells. Wells has been lending more and more money.

They've been pumping money into the economy during the last six

months while other institutions have been contracting. So I think

Wells is a wonderful home for Wachovia.

 

BECKY: How dire of a situation do you think this was, though, for

Wachovia shareholders last weekend when everyone seemed to be

considering this deal at one time, Wells Fargo walked away. Did the

idea that Citigroup came in that night keep the bank in operation the

next day when the markets opened?

 

BUFFETT: Well, I think the FDIC one way or another would have kept

things open. But there's no question the Wachovia situation worsened

dramatically over the last few weeks. Incidentally, I think (Wachovia

CEO) Bob Steel has done a good job since he came in, but he got

handed an impossible hand. And like I say, fortunately this tax bill

makes Wachovia more valuable and Wells has stepped up with an offer

that will provide considerably more money to the Wachovia

shareholders. I also -- I really do think there's no, there's no

banking institution that has done a better job during this tough

period than Wells. I'll tell you one interesting fact, Becky. There

are only two domestic stocks that I own personally. One is Berkshire

Hathaway and the other is Wells Fargo. But I've got quite a bit more

of Berkshire Hathaway. (Laughs.)

 

BECKY: Now I know that when we talked to you about a month ago, you

told us that when you were looking at the financials there was one

stock you've been buying more of. People at the time -- we narrowed

it down to two. We got you to admit that it was either Wells Fargo or

American Express. Was it Wells Fargo?

 

BUFFETT: Well, now you know. Yeah, it was Wells Fargo. (Laughs.)

We've added quite a bit to our holdings since the start of the year.

 

BECKY: Added quite a bit to Wells Fargo -- Have you added to your own

personal holdings in Wells, too?

 

BUFFETT: Yeah, I bought -- The first domestic stock that I can

remember buying, I don't know, in a decade or two. But there was a

time that Wells got down into the low 20s and so I couldn't resist. I

bought some myself. I keep most of my money in Treasury bonds, except

for Berkshire Hathaway, but I did buy some Wells.

[frog03]

It's just a no-brainer!  As is GE.

 

**************

 

GE has no tangible equity in light of a huge balance sheet and tons of various financial exposure.  How is it a no brainer?

[Parsad]

GE has no tangible equity in light of a huge balance sheet and tons of various financial exposure.  How is it a no brainer?

 

Where do you get the idea that GE has no tangible equity?  Those revenues and earnings from the various lines of business, most of which they are #1 or #2 in, come from somewhere.  Just because their financial assets dwarf their operating assets, and a standard ratio isn't defined by their intangible assets, doesn't mean that the core earnings generating power from the various businesses isn't there.  They are as tangible as Berkshire's businesses.  Cheers!

[frog03]

Where do you get the idea that GE has no tangible equity?  Those revenues and earnings from the various lines of business, most of which they are #1 or #2 in, come from somewhere.  Just because their financial assets dwarf their operating assets, and a standard ratio isn't defined by their intangible assets, doesn't mean that the core earnings generating power from the various businesses isn't there.  They are as tangible as Berkshire's businesses.  Cheers!

 

Well, it is more than an idea...  They have about 110 Bn equity and 100 Bn intangibles/goodwill.  So this means about 10 Bn tangible equity.  Now if you compare this vs. the size of your balance sheet which is about 800 Bn, this is about 1% tangible equity/size of balance sheet.  It would not take much to get to negative tangible equity.  I don't care if they are number one or number two in their business.  AIG was often referred to as the number one insurance company not so long ago...

[prevalou]

moreover, GE is in a lot of cyclical businesses. In this case, tangible equity partly invested in cash is a cushion. Look at Intel, number one in their business but barely at break even, cash is a great plus for this company.

A good portion of the goodwill was added in recent years, so maybe as the stock market, its value has diminished.

[prevalou]

before buying a bank, I make a stress test: can the bank bear a 10% loss on its credit portfolio.

I assume the bank can pay the loss with its provisions and one year cash flow.

In 1992 (real estate crisis in California), Wells Fargo passed the test (5% provision/credit and 5% cash flow/credit). Today it is not the case.

 

[StubbleJumper]

prevalou,

 

It would be simpler to state that you just have a policy against buying banks.  ;)

 

Seriously, outside of our Canadian banks, there are almost none in the world that would meet your criterion.

 

SJ

[prevalou]

you are perfectly right. But who knows? Maybe someday, I will find one!