Let Buffet Do the Buying for You

The markets have been pretty terrible this year with the S&P 500 and Dow Jones industrials falling 36% and 33% respectively from the end of the year. Major indexes still remain about 39% off their all time highs set just one year ago. Many asset classes have declined in value including real estate investment trusts, international stocks, mid cap and small cap equities,foreign currencies as well as commodities. In these trying times for investors, people are turning to the richest stock investor on planet earth, Warren Buffett, for advice. Historically a portfolio of stocks mimicking his flagship company Berkshire Hathaway’s portfolio holdings would have outperformed the markets. In addition to that Berkshire Hathaway A shares (BRK.A) have delivered an annualized total return of 25% since 1976. This year the stock is down 15%. If history is any guide however, Berkshire will bounce back and reward patient investors handsomely. Check out Berkshire Hathaway's list of stock holdings from this link.

Check the table below for historical performance of BRK-A share values at year end since 1976.

If Buffett is truly buying american stocks, then the logical step of following his advice is let him do all the work by purchasing Berkshire Hathaway A or B shares.

Disclosure: None

Comments

[Jolly_Rancher:]

You're confused. He was not buying American stocks -- or any stocks at all -- in Berkshire Hathaway. According to the link you provided above, he was speaking of his own persoanl investment account which had been soley invested in government bonds.... "So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds."

So an investment in BRK (which primarily is an investment in an insurance holding company) will not produce the same results as investing in Buffett's personal investments. That said, BRK might still do well, though it appears it has not done nearly as well recently as in days of yore.

2008 Oct 21 01:41 PM

[Dividend Gr...:]

The way I see it, Buffett will be buying something similar to what BRK.A already owns since he has done the research for purchasing the stocks in his holding company in the first place. The other option is him purchasing BRK.A/B shares directly. The third option is him purchasing shares in companies nobody except him and his broker would know ( or close circle of friends).
If you stick with the first two options, chances are a BRK.B or A would be a wise investment to make.

Of course this is not a recommendation so do your own dilligence before investing.

2008 Oct 21 02:32 PM

[Old Rick:]

Not sure which link Jolly_Rancher went to, but the link in "Check out Berkshire Hathaway's list of stock holdings from this link." is indeed the list of BRK stocks. Nowhere in Dob's article does he reference Warren's recent op-ed piece in the NYT where he does indeed state that he is buying American stocks for his personal portfolio. It's a good bet (near 100%) that he is also taking advantage of current market dislocations (AKA Mr. Market's fears) to add to BRK's holdings.

As far as BRK plateauing "in recent years", in March 2000, BRK.B was available at $1350 or so. It topped at around $5000 last year. That's a fairly steep plateau.

2008 Oct 21 04:25 PM

[whisperonth...:]

It appears - just on a general overview - that BRK_A has one down year every 6 to 9 years. That being said, there could be 6 or more pretty good years to come. I still don't want it.

2008 Oct 21 06:28 PM

[prsblue:]

Juan, dollar cost averaging is always a great idea. Even if you dollar cost average into an S&P 500 fund, I guarantee you will beat the pants off of the MAJORITY of investors.

Regarding Buffett not being around forever to invest - read his annual letters to shareholders. Specifically check out pages 17-19 in the 2004 letter. Everybody says "Buffett" but they forget Charlie and Lou. Plus, he'll continue to plant seeds that will prosper far into the future. And most importantly - he's establishing the right corporate culture for Berkshire (just like Jack did with GE).

2008 Oct 21 11:28 PM

[ElGordo:]

WE Buffett in his Aug 15 filing reported buying:
NRG @ 35 & Higher, now @ 24.2,
IR @ 37 & Higher now @ 20.

Any comments.

2008 Oct 22 09:05 AM

[jjc7477:]

Over the last month I've tripled my investment in BRK.B and now hold 18% of my portfolio there. This is the market Buffett has been dreaming of since he was a boy and I believe when he finishes picking clean the bones of the sheeple who can't wait to throw out the babies with the bath water, all who make the commitment now will enjoy returns seen in the early days of Berkshire. Trust
Warren!

2008 Oct 22 01:12 PM

[D-D:]

Many people forget that BRK, by itself, is a very diversified company due to its many many holdings

Just buy BRK and forget about it till you get better ideas
RS
valuestockinvestors.bl.../

2008 Oct 22 02:14 PM

[llc_kaiba:]

Looking at NRG and IR as a whole and knowing WEB's investment approach, these two companies as far as its underlying values are concerned...are selling at a hefty discount.. WEB is getting more on what he paid for...IR's underlying value is increasing over the years and so is NRG...If you're buying these two lower than what WEB paid for then you have a wider margin of safety and higher probability of making a huge gain as long as you're keeping it long term...

2008 Oct 22 02:34 PM

[sumosama:]

Gordo, his time horizon is not 2 months. Will likely double down or just reinvest dividends over the next 10-20 years. Not sure what your point is...

2008 Oct 23 12:11 PM

[Pipo:]

Warren Buffett has lost more value in his stock than the CEO of any other publicly traded company. The current tally on the paper loss is $9.6 billion.

warrenbuffettstocks.bl.../

2008 Oct 23 01:52 PM

[Jolly_Rancher:]

Try the link in the second to last line of the article. If you want to succeed, you need to read everything. :)

Also, I don't believe Buffett will buy shares like those in his BRK. Otherwise, why wouldn't he just buy BRK? Makes the most sense. I think he's going for other fish with higher return.

2008 Oct 29 01:48 PM