In its SEC 13-F filing for the third quarter 2012, Berkshire Hathaway revealed numerous changes to its portfolio. The largest addition was an initial stake in Deere & Co. (DE, 4 million shares, $340 million current value). Other new positions included Precision Castparts (PCP, 1.25 million shares, $220 million) and Wabco Holdings (WBC, 1.6 million shares, $90 million).
Increased stakes were reported for Wells Fargo (WFC), General Motors (GM), IBM (IBM), National Oilwell Varco (NOV), Viacom (VIAB), Bank of New York Mellon (BK), DaVita (DVA), and DirecTV (DTV).
Holdings were eliminated in Ingersoll-Rand (IR), Dollar General (DG), and CVS Caremark (CVS).
Berkshire’s reduced stakes included Kraft Foods (pre-spinoff, KFT, -$1.3 billion), Johnson & Johnson (JNJ, – $680 million), Procter & Gamble (PG, – $452 million), ConocoPhillips (COP, -$260 million), and General Electric (GE, – $90 million).
The large portfolio reductions in KFT, JNJ, PG, and COP are believed to have been made by Warren Buffett, since his initial positions generally exceed $1 billion, and these investments were made prior to the arrival of his portfolio managers, Todd Combs and Ted Weschler. The other portfolio changes (less than $500 million) were apparently made by Combs and/or Weschler.
I was quoted in a Bloomberg article on this topic:
Buffett may be selling the consumer stocks to provide more funds to his deputies while reserving money for a large acquisition, said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business. Berkshire’s cash pile climbed to $47.8 billion in the third quarter, buoyed by the stock sales and earnings at operating units.
“He may be really wanting to keep that aside for his big elephant,” said Kass, who has accompanied students to meet the Berkshire chairman and chief executive officer in Omaha.
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