Warren Buffett was interviewed on CNBC today. He discussed several specific Berkshire Hathaway investments:
(1) Apple: Berkshire owns 2 1/2% of Apple’s shares. Initially one of Buffett’s portfolio managers (Todd Combs or Ted Weschler) bought 10 million shares of Apple (during the first quarter of 2016). Warren Buffett subsequently purchased many more shares (during the first quarter of 2017). During the second quarter of 2017, Combs or Weschler sold 2/3 of his stake in Apple to free up funds for other investments. (They each manage $11 billion). At the same time, Buffett bought more shares of Apple than Combs or Weschler sold.
(2) IBM: Buffett has more confidence in Apple than in IBM.
(3) Bank of America: Berkshire just converted its warrants into 700 million shares of Bank of America common stock and plans to hold those shares for a long time.
(4) Wells Fargo: This is still a good long-term investment. Its problems will be corrected.
(5) Kraft Heinz: Retailers such as Amazon/Whole Foods are becoming stronger relative to the food companies. Specific brands will succeed through advertising (such as Berkshire owned Duracell batteries). Kraft Heinz will not be acquiring Mondelez nor Unilever. Berkshire/3G Capital will not engage in hostile takeovers. It is hard to fight retailers with mergers. What matters is the strength of individual brands.