Berkshire's 13F Filing

[Guest ValueCarl]

http://www.sec.gov/Archives/edgar/data/1067983/000095012310078001/v56978ae13fvhr.txt

[Parsad]

Well, I'm glad to see Buffett added a shitload of Johnson & Johnson...so did we!  Cheers!

[Guest ValueCarl]

Just think though. That data may already have changed!  ;D

 

All kidding aside, I see some reductions in GE, not to the extent of Watsa, etal, but reductions all the same in addition to Exxon, too.

 

The man refuses to purchase important PIPE plays as part of the US infrastructure with "technology flares."  :o

[Guest Bronco]

Parsad - I have been waiting for JNJ to hit $55.  It may never.  But as I have written in the past, ABT and JNJ are the only pharmas I would invest in.  JNJ - great company, and truly great products.  Cash flow machine.

 

When you look at stocks that Buffett and Prem both own - JNJ and KFT and WFC, you have to believe these companies are great long-term investments (but always at the right price).  Disclosure - I only own KFT right now.

 

 

 

 

[Parsad]

Hi Bronco,

 

Yes, all three are great businesses.

 

For us, it's always about what is the alternative and the opportunity costs involved.  Do we buy low-yielding fixed income instruments, keep zero-yield cash, or buy quality businesses with dividends greater than the best yields of high quality corporate bonds?  In this case, the choice was somewhat obvious. 

 

It doesn't mean the price won't fluctuate and it doesn't mean we'll hold these stocks for a long period of time.  We will hold them until other investments offer a higher potential return relative to their inherent risk profile or investors bid them back up closer to fair value.  That's it. 

 

Whether Prem or Warren buys, or the world is falling apart won't matter.  We have to go by what we see and have available to us, and where there is a mispricing of risk.  Cheers!

[Parsad]

I'm guessing Berkshire's stake in JNJ is probably significantly larger than the 13F is showing.  We were buying alot more towards the middle of July when the bottom fell out over a few days, and I would think they must have added at least some more shares during the same time if they were buying at higher prices back in June.  Cheers!

[Guest Bronco]

I am not advocating buy and hold, but JNJ would be on a short list of my opinion that could fit in that category.  

 

But some of these great names trading near 10x cash flow - I agree Parsad.  How do you turn these down?

[yseric]

this might be a really dumb question... but I'm just wondering how we distinguish which companies were bought by Buffett, and which were bought by Lou Simpson or other managers?  thanks much =)

[Parsad]

I think if the purchase was under $400M, then it was probably Lou Simpson, as GEICO has far less capital.  Fiserv purchase was most likely a Simpson purchase.  Cheers!

[yseric]

thanks so much for your clarification....i guess Carmax is a Lou Simpson purchase also then...

[Parsad]

Most likely.  Cheers!

[beerbaron]

Is that me or Buffett is increasing it's pharma/health exposure. JNJ BDX SNY

 

I remember reading some random Buffett interview in 2007 where he said pharmas were cheap. If I were a copycat I would go in pharma too...

 

BeerBaron

[wiessman]

Bronco - at what price do you like KFT?

 

thanks

[Guest Bronco]

As of today, I like shorting the 2012 leaps at 25 strike.  Gives you a potential cost basis of under 23 if you get put the stock.