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Wallace Weitz started investing when he was a little boy. He invested the profits from different entrepreneurial ventures when he was only 12. Weitz spent three years analyzing small company stocks and another ten years at a brokerage firm as an analyst and portfolio manager before he established Wallace R. Weitz & Company in 1983. The company employs a value investing strategy and favors companies with good management and long-term prospects. According to the statistics at Weitz Funds, the Partners III Opportunity Fund had an annual total return of 5.6% for the period ended December 31, 2011.

In this article, we are going to focus on the performance of the top 10 positions of the 13F portfolio of Wallace R. Weitz & Company at the end of September. These ten positions returned 17.22% so far since the end of the third quarter, versus 16.30% for SPY. The calculation assumes that Weitz did not increase or reduce these 10 positions since September.

Company Name

Ticker

Value (*1000)

Return since Sep

BERKSHIRE HATHAWAY

(NYSE:BRK.B)

106500

11.09%

MICROSOFT CORP

(NASDAQ:MSFT)

100724

14.29%

AON CORP

(NYSE:AON)

98973

12.16%

WELLS FARGO &

(NYSE:WFC)

91115

26.00%

LIBERTY MEDIA CORP

(LINTA)

90766

16.87%

DELL INC

(NASDAQ:DELL)

83199

15.91%

TEXAS INSTRUMENTS

(NASDAQ:TXN)

82174

27.25%

LIBERTY GLOBAL

(NASDAQ:LBTYK)

77925

22.80%

REDWOOD TRUST

(NYSE:RWT)

75859

5.50%

GOOGLE INC

(NASDAQ:GOOG)

73744

22.89%

Weitz seems to be a fan of Warren Buffett. His fund invested $107 million in Berkshire Hathaway Inc (BRK.B) at the end of the third quarter, up 26% from the end of June. BRK-B returned 11.09% so far since the end of the third quarter, underperforming the market by 5 percentage points. Buffett is a widely followed money manager. Besides Weitz, many other hedge fund managers also invest certain part of their portfolio in Berkshire Hathaway. For example, Tom Russo's Gardner Russo & Gardner had $400+ million invested in this stock.

Texas Instruments Inc (TXN) is the best performing position among these 10 stocks. It returned 27.25% so far since the end of the third quarter, outperforming the market by more than 11 percentage points. TXN designs and produces semiconductors and sells them to electronics designers and manufacturers all over the world. There are 23 hedge funds with TXN positions at the end of September. Weitz increased his TXN stakes by 19% to $82 million over the third quarter. Bill Miller's Legg Mason Capital Management also had $100+ million invested in TXN at the end of September last year.

Wells Fargo & Co (WFC) has also performed quite well since the end of September. The financial company returned 26% so far, beating the market by 10 percentage points. During the third quarter, Weitz boosted his position in WFC by 7%. As of September 30, 2011, his fund had $91 million invested in WFC, a stock that is very popular among hedge funds. Together with Wallace R. Weitz & Company, 69 hedge funds reported to own WFC at the end of September. For instance, Warren Buffett's Berkshire Hathaway had $8.7 billion invested in this stock.

Liberty Media Corp (LINTA), Liberty Global Inc (LBTYK), and Google Inc (GOOG) also beat the market since the end of the third quarter last year. The top three positions - BRK-B, Microsoft (MSFT) and Aon Corp (AON) underperformed the market since the end of September, but they all generated double-digit returns in that period. Overall, we like Weitz and his investment style. He has years of experience in investments and mainly invests in value stocks with great potential to grow. We strongly recommend investors to focus on his top stock picks and do some deep research on these stocks for their own portfolios.

Source: Wallace Weitz's Top 10 Positions Returned 17% Since September