It's that time again. It's been almost a year since we took a peak at Berkshire Hathaway's equity portfolio, although we may have discussed his new holdings in the passing such as his significant holding in USG Corporation (NYSE: USG), the maker of SHEETROCK.
Since last May, Mr. Buffett has disclosed a substantial holding in Johnson & Johnson (NYSE: JNJ) as well stakes in Sanofi-Aventis (NYSE: SNY) and Unitedhealth Group (NYSE: UNH). These new positions are a play on demographics and the healthcare needs of ageing baby boomers. As a bonus, both JNJ and Sanofi are significant players overseas and provide a natural hedge against a potentially vulnerable US Dollar. Furthermore, they provide exposure to burgeoning emerging markets and their inevitable need for healthcare products and services. My brother and I have been a longtime JNJ shareholder and recently added Unitedhealth at around $53.
Berkshire has also added to its arsenal of construction and housing related holdings, including USG and ACME Brick, by taking a small position in Ingersoll-Rand (NYSE: IR), a manufacturer of climate control and HVAC systems among other things.
Meanwhile, Buffett has eliminated or reduced various positions in the portfolio. Lexmark (NYSE: LXK) and Gap (NYSE: GAP) are both gone. Lexmark's stock has made a nice comeback. Berkshire had doubled down on Lexmark after a monumental decline and probably broke even on that trade. In Q4 of 2006, Berkshire reduced its Comcast (Nasdaq: CMCSA) holding after a nice run up in 2006. We have been doing the same with our Comcast holding in the Model Portfolio.
Today, Mr. Buffett revealed 10.9% stake, at prices up to $81.8, in railroad operator Burlington Northern Santa Fe Corp. (NYSE: BNI). It appears he has taken smaller stakes in two other railroad operators as well. Indeed, in his recent annual report, he had mentioned two undisclosed positions worth a combined $1.9 billion. Railroads' fortunes have turned around significantly in recent years accompanied by improved operating efficiencies and pricing power. The railroads should continue to prosper as globalization leads to increased trade (import and export) and as energy demand (coal and natural gas) continues to rise. It is interesting to note that his good friend Bill Gates has a significant holding in Burlington's competitor Canadian National Railway (NYSE: CNI). Our exposure to the globalization and trade theme comes through Expeditors International of Washington (Nasdaq: EXPD) which we own both personally and in the Model Portfolio.
So as markets continue to fret over the possibility of a recession and a slumping housing market, Mr. Buffett is deploying his cash and finding value where others see trouble.
Since last May, Mr. Buffett has disclosed a substantial holding in Johnson & Johnson (NYSE: JNJ) as well stakes in Sanofi-Aventis (NYSE: SNY) and Unitedhealth Group (NYSE: UNH). These new positions are a play on demographics and the healthcare needs of ageing baby boomers. As a bonus, both JNJ and Sanofi are significant players overseas and provide a natural hedge against a potentially vulnerable US Dollar. Furthermore, they provide exposure to burgeoning emerging markets and their inevitable need for healthcare products and services. My brother and I have been a longtime JNJ shareholder and recently added Unitedhealth at around $53.
Berkshire has also added to its arsenal of construction and housing related holdings, including USG and ACME Brick, by taking a small position in Ingersoll-Rand (NYSE: IR), a manufacturer of climate control and HVAC systems among other things.
Meanwhile, Buffett has eliminated or reduced various positions in the portfolio. Lexmark (NYSE: LXK) and Gap (NYSE: GAP) are both gone. Lexmark's stock has made a nice comeback. Berkshire had doubled down on Lexmark after a monumental decline and probably broke even on that trade. In Q4 of 2006, Berkshire reduced its Comcast (Nasdaq: CMCSA) holding after a nice run up in 2006. We have been doing the same with our Comcast holding in the Model Portfolio.
Today, Mr. Buffett revealed 10.9% stake, at prices up to $81.8, in railroad operator Burlington Northern Santa Fe Corp. (NYSE: BNI). It appears he has taken smaller stakes in two other railroad operators as well. Indeed, in his recent annual report, he had mentioned two undisclosed positions worth a combined $1.9 billion. Railroads' fortunes have turned around significantly in recent years accompanied by improved operating efficiencies and pricing power. The railroads should continue to prosper as globalization leads to increased trade (import and export) and as energy demand (coal and natural gas) continues to rise. It is interesting to note that his good friend Bill Gates has a significant holding in Burlington's competitor Canadian National Railway (NYSE: CNI). Our exposure to the globalization and trade theme comes through Expeditors International of Washington (Nasdaq: EXPD) which we own both personally and in the Model Portfolio.
So as markets continue to fret over the possibility of a recession and a slumping housing market, Mr. Buffett is deploying his cash and finding value where others see trouble.
