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Buying BRK.B

|Includes: BAC, Berkshire Hathaway inc. (BRK.B), COP, PKX, RIG

Friday I made my first purchase in a while.  I believe the last purchases I made were in March at the bottom, and since then I have only been trimming.

The Trades

A few days prior I sold, VLO and DOW as well.

BAC has come a long way in a short span of time.  1/3rd of my position was bought when the shares were "cheap" at 15 bucks or so on their way down, and the other 2/3rds of my position was bought at 4 dollars per share when people were talking of Nationalization.  It worked out in my case.

I'm bearish on oil at least in the short term but for some reason I've held on.  I sold some COP at 45.50, but I liquidated the position now to buy a more stable Berkshire.  Oil has had a rally because people are expecting an economic recovery.

The only remainin oil holding I have is the offshore driller Noble.  I sold RIG (my other driller) instead because of the huge debt load they have which work against the grain in a deflationary enviornment.

PKX was another sell.  The stock was purchased in the 50's and I made almost a double.  ( I had previously lost money on it on the way down).

I sold my stocks after a big run up and I put my money into Berkshire.  I got away from individual equities and I consider Berkshire more of a diversified fund.  Even if those stocks I sold continue to run, I will indirectly benefit as they are held in Brk.b.

What I like about Berkshire?

I like that Buffet has made terms that would benefit in a short term deflationary period ( bonds and he still holds billions in cash), but he also has longer term bullish calls on the entire market.  

I like that even in the equities he owns, he has a lot of consumer stables that should be more immune to the big run ups and big run downs in the market.  People need to eat, people need band aids, people still drink soda etc.  These products have more inelastic demand.

Even with a lot of safety factors, buffet does still own beaten down financials and railroads ( early cyclicals).  IF we did have a recovery ( I wouldn't rule anything out as unlikely as I see it), he wouldn't miss the train.

I also like that he's one of the greatest investors that have ever lived, and a savy trader.  Who knows what he will jump onto next and who knows what kind of sweet heart deals and information he's getting.  If there is a recovery, I expect him to do well.  Basically, I bought shares in BRK.B instead of buying the index because I like Buffet's style and I like his current holdings considering what sort of outlook I see.

I haven't been making as many moves recently, but BRK.B was flat, and some of these names were up pretty good.  I  had been meaning to do this for some time, but just made all of these moves at once in a trade day.


Discolsure:  The Author is long Brk.B and sold every share out of everything else listed.