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Warren Buffett Stock Portfolio »Definition and Notes for 2021
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Warren Buffett's stock portfolio
There is probably no investor who is not familiar with the star investor Warren Buffett. The only reason the third richest person in the world is by far not the richest person in the world is because he gave up shares in his holding company Berkshire Hathaway for donations. Probably no other investor can look back on an average return of 20 percent per year for over 50 years. Buffett is one of the few who can prove that the market is beatable.
What stocks does Buffett currently hold?
Warren Buffett's Berkshire Hathaway is worth over $ 350 billion. The investment company holds shares in more than 80 different companies from various sectors.
Coca Cola and Buffett are closely related. According to one anecdote, Buffett showed his business acumen at the age of six. At that time he bought a six pack of Coca Cola and sold the bottles individually for a profit, earning his first money.
Coca Cola fulfills many of Buffett's requirements: it is a solid company with market leadership qualities, he understands the business model straight away, and in 1988 a particularly favorable purchase opportunity arose because the company was significantly undervalued at the time. The purchase of shares has also proven to be a stroke of luck for Buffett thanks to the regular and high dividends.
Buffett's Berkshire Hathaway bought Heinz in 2013 together with the Brazilian mutual fund 3G and was largely responsible for the merger of Heinz and Kraft Foods. Berkshire Hathaway owns around a quarter of the group. Kraft Heinz has an 18 percent stake in the holding's portfolio and is therefore currently the largest investment.
Sold: Exxon Mobil
Buffett also relied on an "elephant" with Exxon Mobil. In any case, the star investor feels comfortable with investments in oil and gas. Exxon Mobil has also long been the largest company in the world. However, Exxon Mobil shares have only been in the market since 2013 Share portfolioby Warren Buffett. At the time, the company seemed undervalued to him and it was doing well compared to the industry. Nonetheless, Buffett sold his shares again at the end of 2014 on the grounds that he would want to use the capital for other investments.
The Wells Fargo investment is currently the largest in Warren Buffett's stock portfolio. Berkshire Hathaway holds just under nine percent in one of the most successful US banks. Having multiple competitive advantages, trustworthy management and easy to understand for Buffett, the company is a typical investment for Buffett.
Buffett himself describes the investment in Wal-Mart as his biggest mistake - and by that means only the late entry. It wasn't until 2005 that he bought the company's securities and has been making new purchases ever since. His holding company Berkshire Hathaway currently owns around 1.8 percent of the world's top-selling company. However, in 2015 she gave him little reason to be happy. As a consequence, Berkshire reduced its investment slightly and sold around 4.2 million papers.
Warren Buffett's investment in IBM came as a surprise to many. For years he'd stayed away from technology stocks. The 85-year-old has the principle that he must understand the company and its products in order to invest. However, in 2011 he joined IBM and so far had little reason to be happy. The group has not been able to stop the year-long decline in sales and the share price has also fallen significantly since the investment. Nonetheless, Buffett increased his share to 8.6 percent.
American Express is one of the “Big Four” at Berkshire for Buffett, along with its investments in Coca Cola, Wells Fargo and IBM. Since joining the company in 1994, he has been able to increase the capital employed ninefold.
Sold: Conoco Phillips
Conoco Phillips' investment is considered to be one of Warren Buffett's biggest mistakes, and he himself called it that. In the sale, Buffett suffered a billion-dollar loss.
His involvement with Tesco also turned out to be a mistake for Buffett. Above all, he was wrong about the competence and trustworthiness of the management. A balance sheet scandal led to the dismissal of large parts of the board. Buffett then got out in the fall of 2014 and suffered a loss of $ 440 million.
Philipps66 is currently Berkshire's sixth largest investment. The holding company owns around a tenth of the refinery's shares.
Warren Buffett's stock portfolio in 2015
There was little reason to celebrate at Berkshire Hathaway in 2015. By October 2015, Coca Cola showed the most positive development of the five major Berkshire investments with a price decline of 0.06 percent compared to February 2015, followed by Wells Fargo with a loss of almost three percent.
The technology giant IBM is not one of the biggest losers with - 11.8 percent, but is surpassed by American Express with - 17.2 percent. Most of all, however, was the decline in Wal-Mart stock, which fell 31.6 percent after reaching a record high in January.
So 2015 is unlikely to end too successfully for Warren Buffett and his holding company. Berkshire Hathaway's stock also fell roughly 10 percent. While the portfolio is actually large enough to be able to cope with the poor performance of individual stocks, the price declines of the Big Four are clearly significant.
Kraft Heinz, currently the most important horse in the stable, can post a price increase of 5.6 percent and already ensured that Berkshire posted a record profit of 9.43 billion dollars in the third quarter. The merger alone accounted for $ 4.4 billion in profits.
What is Buffett's strategy?
Buffets Exchange strategy is based on value investment. He buys great companies that are undervalued. The "safety margin" is a key success factor. So he makes sure that the “intrinsic value” of a company is significantly greater than the share price. In this way, he can invest profitably even if the stock price does not reflect the actual value, but only aligns.
As a star investor, Buffett hardly has the problem that a stock corporation remains significantly undervalued after he has recognized the potential and acquired securities. Berkshire investments often have a significant impact on market sentiment. An investment from Buffett is considered a quality feature and the share prices usually rise significantly shortly after the investment.
Another condition is that they are considered "safe". Typically, the public companies do this because of their existence as industry leaders or because of their size. Another essential requirement is that Buffett must understand the company's business model and products. As a third important point, Buffett pays special attention to the fact that the stock corporation is run by competent and trustworthy management.
Warren Buffet is said to be extremely patient. He is known for making long-term investments in a company. In some cases he even holds the shares in his stock corporations for several decades. He himself stated that his preferred holding period was actually "infinite".
To invest in companies, his investment company doesn't just use equity. Instead, it uses an average of around 1.6 times its own funds in borrowed capital. In this way, it is also possible for him to remain true to his principle of always keeping at least 20 billion dollars in cash in order to be able to take advantage of particularly interesting buying opportunities.
Warren Buffett's stock portfolio is, despite its ambition to understand the company, very broad. The 80 or so public companies come from a wide variety of industries. However, one focus is undoubtedly on the insurance business.
Warren Buffett's mistake
One of the reasons Buffett is so popular in the media and among investors is because of his ability to be self-critical. Because even the star investor has made some wrong decisions and admits them openly. Some of the master's biggest faux pas include:
ConocoPhilips is actually one of the companies that are classic candidates for Buffett. Nevertheless, the star investor ended his engagement after only a few years. The reason he gave the drop in the price of oil. After the sale, which is believed to have cost Berkshire Hathaway $ 3 billion, Buffett said he didn't expect the price of oil to drop that much. Berkshire subsequently invested in the split-off company Philips66.
Tesco is also a failure for Buffett. The star investor is said to have lost 287 British pounds or 444 million dollars to the third largest retailer. He accuses himself of not having reacted quickly enough.
When Buffett took over a majority stake in Berkshire in 1965, it was a pure textile company. The company's textile business had no future, however, and Buffett began as chairman using the capital for non-industry investments. He later described the purchase as a major mistake, but the last factory did not close until 1985.
Buffett paid around $ 433 million in 1993 to acquire shoe maker Dexter. Just eight years later, the company ceased shoe production and what was left of the company was merged into the H. H. Brown Shoe Group Unit. What was particularly annoying about the deal: Buffett used Berkshire stocks to buy. As a result, the purchase cost Berkshire investors not just $ 400 million, but an estimated $ 3.5 billion. Shoe maker Dexter was described by Buffett himself as his biggest mistake. He then added "but I'll make more mistakes in the future - you can bet on that".
NBC TV Station
Buffett describes it as a huge mistake to have refused to pay $ 35 million for an NBC station in Dallas and thus foregoing significant profits.
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