Warren Buffett’s Current Portfolio

Last week we talked about what exactly a 13F filing was. Not only that, we looked at the current portfolios of 11 amazing Value Investors. But you may have noticed that one of the most famous (If not the most famous) investors of all time was missing from that list. ​​ After further consideration, I realized that as a Next Level Value Investor, it would almost be blasphemy for me to not include one of the industries and our greatest mentors. So, to make up for that gross negligence on my part, I thought today we’d quickly look at Warren Buffett’s portfolio. ​​ What he currently owns, His top five holdings, and what stocks he’s recently added to his portfolio. Don’t forget, Buffett has managed a staggering 20.8% return over the last 52 years.

Sound fun? Lets begin!

Buffett’s Current Portfolio

Because Berkshire Hathaway is so big, we’re going to focus on the new stock they bought, or the positions they added to. ​​ Buffett's investment style has changed over the many years he’s been an investor. He’s found that he likes owning the entire business, rather than owning shares, but he will still buy stock from time to time (He tends to buy private businesses, or the entire public business if the company has amazing leadership and economics).

Here’s all the company’s Buffett owns today:

(Dataroma, 2017)

His top 5 Holdings include:

HKC  ​​​​ - Heinz Craft Company

WFC ​​ - Wells Fargo

AAPL - Apple Inc.

KO  ​​ ​​ ​​​​ - Coca Cola Company

AXP  ​​​​ - American Express

The awesome part, at least for me, is that even with Buffett’s billions of dollars, he’s still running a very concentrated portfolio. ​​ I know that stock list above seems long, but take a look at the percentage of the top five holdings. Buffett has 64.14% of his Portfolio in only Five businesses. ​​ You can see that ​​ he practices what he preaches when he tells us to run a concentrated portfolio if you’re not a ‘Know Nothing’ investor. Which is what we’re trying to not become by learning as much as we can here.

Now let’s take a look at what Berkshire bought last quarter and what they bought this quarter.

New Buys for Berkshire in Q4 2016

At the end of last year, Warren Buffett was aggressively buying what he believes to be the best airline businesses out there. ​​ This was a big change for Buffett as he used to hate the airline industry. He has been quoted saying that the airline industry was a deathtrap, and that if he ever considered buying airlines, he should have his own help line to talk him out of doing so. ​​ But Buffett has changed his mind on this and was quoted saying “It’s true that the airlines had a bad 20th century, “Buffett said in a recent interview on CNBC. “They're like the Chicago Cubs. And they got that bad century out of the way, I hope.”

I’ve listened to Mohnish Pabrai’s thoughts on the subject, and he believes that the airline industry is much more consolidated now than the industry ever has been. ​​ He also believes that because the United States has access to shale oil, and the technology to get it out of the ground is continuously improving, the US is now the ‘swing producer’ not OPEC. ​​ What this translates to, is long term low oil prices. In other words, If oil gets to a certain price above $50, the US will pump out more oil, driving the prices back down again. This decreases the cost per flight for the airlines and therefore, He see’s this as one of the largest tailwinds (pun intended) for the airline industry going forward.

I haven’t done any research on any of these companies, but I know Southwest has an amazing and unique company culture that the other lines have tried, and failed to replicate. ​​ If you want to dig into this industry, I’d start there.

Buffett also continued to accumulate AAPL shares during the last quarter of 2016, which he initiated back in Q1 2016, bringing his share count up to 42,131,950.

New additions to the Berkshire Hathaway Portfolio

As you can see above, Buffett bought a whole lot more of AAPL this last quarter at a reported price of $143.66. His Share count as of Q1 2017 is now 71,997,454. AAPL is a cash machine, and Buffett must like the future prospects of the business as it is now Berkshire Hathaway’s Third largest holding.

At the most recent annual shareholder meeting Buffett mentioned that Apple is more of a consumer goods business than it is a tech business, likely making it easier for Buffett, who is a self-confessed tech phob, to more easily wrap his head around it’s current and future economic potential.

Buffett also bought more Airline stocks, including Southwest (LUV) and American Airlines (AAL) though they weren’t particularly impactful to the overall portfolio.

The other additions to the portfolio are likely from buffett’s two investment partners, Todd and Ted. ​​ They added more Bank of New york (BK), and Sirius XM (SIRI) to the portfolio. ​​ I believe this to be Todd and Ted because of the relatively small percentage of the portfolio that was impacted by the purchases.

Summary

That’s where we’ll leave it for today. I think it’s always extremely interesting to see what Buffett has bought and sold each quarter, and I’ll continue to monitor both. ​​ You can learn a ridiculous amount from watching and listening to what Buffett has to say, and looking at his portfolio can give us insight into what he thinks will do well in the future.

Next time

That being said, we don’t want to just blindly follow Buffett into his purchases. ​​ So, next time we’ll be doing some Quick valuations on the company’s he’s continued to add positions to, and see if they are on sale for us. It should be lots of fun.

Thanks for reading,

We’ll talk again soon.

~Ryan Chudyk~