Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) filed its first quarter 13-F with the SEC last week. From the filing, you may find a few investment ideas from where Buffett is putting his money, as noted by Morningstar. At the end of the first quarter, Berkshire held a total of 41 stocks in its equity portfolio, with American Express (NYSE:AXP), Coca Cola (NYSE:KO), Johnson & Johnson (NYSE:JNJ), Kraft Food (KFT), Procter & Gamble (NYSE:PG), US Bancorp (NYSE:USB) and Wells Fargo (NYSE:WFC) being the largest holdings.
|Bank of America||BAC|
|Burlington Northern Santa Fe||BNI|
|Johnson & Johnson||JNJ|
|M & T Bank||MTB|
|Procter & Gamble||PG|
|United Parcel Service||UPS|
|Wells Fargo & Co.||WFC|
|Wesco Financial Corp.||WSC|
Though no new stock was added to the portfolio, nor was any eliminated during the first quarter, Buffett did make a few adjustments, most notably the increased stakes in two railroad companies, Burlington Northern (BNI) and Union Pacific (NYSE:UNP), because comparing to auto or air, railroad offers an attractive, and energy efficient, way to transport goods. In addition, Berkshire also increased positions in two of the nation’s largest banks, Wells Fargo and US Bancorp, as bank shares hit multi-year lows in the first quarter, as well as healthcare and consumer products company Johnson & Johnson, after selling stakes in the last quarter of 2008.
At the same time, Berkshire Hathaway has trimmed positions in Carmax (NYSE:KMX), whose share price has jumped nearly 50% in the first quarter, and ConocoPhillips (NYSE:COP), which used to be one of Berkshire’s largest holdings but suffered a lot last year as crude oil price dropped some 70% from its peak of $145 last summer, contributing to BRK’s worst quarterly loss in nearly two decades.
Actually, when you look at Berkshire Hathaway’s portfolio, you will notice that itdon’t change much quarter over quarter, or even year over year. Buffett is an example of what the buy-and-hold investing strategy really means because some of the stocks have been in Berkshire's portfolio for decades. However, there are arguments that the buy-and-hold method is dead as the stock market has experienced big ups and downs lately, giving stock pickers opportunity to profit from the swings. The stock market has essentially become a trader’s market.
Yes, the buy-and-hold may make my portfolio look bad in a down market, such as the one we have seen since October 2007. But the stock market and economy work in cycles and they will eventually recover. When they do recover, my portfolio will benefit greatly from what I bought now. So I still buy and hold.