Warren Buffett is arguably the greatest investor of our time. With roughly $10,000 in hand in the mid-1950s, the Oracle of Omaha has grown that initial nest egg into a net worth that now exceeds $79 billion. And, as I’ve noted before, if not for his philanthropic contributions over the decades, he just might be the wealthiest man in the world right now.
What makes Buffett’s success so interesting is that he isn’t trying to reinvent how to invest. Rather, he seeks out companies that have clear competitive advantages and, often, a long history of profitability. Essentially, these are companies that he could buy and forget about for years or decades at a time. It’s an investment strategy that might bore the daylights out of some investors who enjoy the heart-pounding tick of the Dow Jones Industrial Average up or down a fraction of a percent, but it works for him. In fact, averaged out over many decades, Buffett’s book value growth for Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B), the company he runs as CEO, has absolutely thumped the S&P 500…
Berkshire Hathaway’s 13F filing yields some familiar buying
Because of this overwhelming success, investors often look to Buffett for investment ideas and may even mirror his every move. That’s what makes Berkshire Hathaway’s 13F filing with the Securities and Exchange Commission (SEC) each quarter such an anticipated event.
You see, investment firms that have more than $100 million in assets under management are required to file Form 13F with the SEC no later than 45 days after the end of the previous quarter. This filing will contain all of an investment firm’s holdings, thereby allowing Wall Street and investors to see what the brightest investment minds have been up to over the previous three-month period. Even though there are downfalls to 13Fs, such as the fact that they’re showing data that’s more than six weeks old, they can still provide valuable insight as to what trends, sectors, and industries are dominating the attention of the most prominent money managers on Wall Street.
Last week, Berkshire Hathaway filed its latest 13F, which covers any transactions that occurred during the second quarter (April 1-June 30, 2019). There were two notable additions in the finance space, with Buffett and/or his team adding to Berkshire’s existing positions in Bank of America (NYSE:BAC) and U.S. Bancorp (NYSE:USB). Berkshire has held stock in U.S. Bancorp for 13 years and counting.
The addition of nearly 31.1 million shares of Bank of America and almost 3.2 million shares of U.S. Bancorp fits with Buffett’s theme of bolstering Berkshire’s portfolio with well-run, nationally branded financial institutions. Bank of America has, in particular, done an excellent job of reducing its operating expenses since the Great Recession, and it’s benefited from the move higher in interest rates. Meanwhile, U.S. Bancorp has one of the higher returns on assets among major banks…
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