Buffett Stocks: What's in Warren Buffett's Portfolio?

Warren Buffett - source: http://www.flickr.com/photos/trackrecord/178633669/ creative commons licence.
Warren Buffett - source: http://www.flickr.com/photos/trackrecord/178633669/ creative commons licence.

The performance of Warren Buffett's stock portfolio has been nothing short of astounding over the years. Once academic study, for instance, found that from 1980 to 2003 Berkshire Hathaway's stock portfolio outperformed the S&P 500 in 20 out of 24 years, and achieved a 12 percent edge over the index. This performance was achieved not by buying hot technology stocks or initial public offerings, but rather by investing in the stock of companies with solid franchises and great long-term business prospects like Proctor and Gamble, Coca-Cola, and Wells Fargo.

What does Warren Buffett's portfolio look like? Well, of course we have no idea what his private stock holdings consist of, but the holdings of his company, Berkshire Hathaway, of which Mr. Buffett owns approximately 30%, are a matter of public record. Berkshire is required to publish its stock holdings on a quarterly basis in an SEC filing called a 13F. This information then becomes freely available to the public through the SEC's Edgar website.

In the table below, I have listed all of the stock holdings of Berkshire Hathaway and its subsidiaries as detailed the the company's most recent 13F filing. You will notice that most of the stocks listed here are of large, well-known companies. In part, this is because the enormous size of Berkshire's stocks portfolio prevents it from making meaningful investments in small capitalization stocks. However, Warren Buffett also likes well-known companies because their brand names, research and development, and marketing are often best of breed, giving them significant advantages over competitors.

Company
Ticker
Shares Owned
Market Value
American Express Co.
AXP
151,610,700
$4,305,743,880
Bank of America
BAC
5,000,0000
$76,650,000
Burlington Northern Santa Fe
BNS
76,777,029
$6,231,991,443
Carmax Inc.
KMX
12,000,000
$200,040,000
Coca Cola
KO
120,689,129
$5,986,180,798
Comcast Corp
CMCSA
12,000,000
$181,560,000
Comdisco Holding Co.
CDCO
1,538,377
$11,376,014
ConocoPhillips
COP
71,228,096
$3,204,552,039
Constellation Energy Group, Inc.
CEG
14,828,207
$437,135,542
Costco
COST
5,254,000
$262,647,460
Eaton Corporation
ETN
3,200,000
$171,680,000
Gannett Inc.
GCI
3,447,600
$27,408,420
General Electric
GE
7,777,900
$106,712,788
GlaxoSmithKline
GSK
1,510,500
$58,939,710
Home Depot
HD
3,700,000
$97,384,000
Ingersoll-Rand
IR
7,782,600
$225,928,878
Iron Mountain
IRM
3,372,200
$101,469,498
Johnson & Johnson
JNJ
32,508,891
$1,986,293,240
Kraft Foods
KFT
138,272,500
$3,899,284,500
Lowes Companies
LOW
6,500,000
$147,810,000
M & T Bank
MTB
6,715,060
$390,413,588
Moody's
MCO
48,000,000
$1,155,360,000
NRG Energy
NRG
7,200,000
$206,712,000
Nalco Holding Co.
NLC
9,000,000
$166,050,000
Nike Inc.
NKE
7,641,000
$432,633,420
Norfolk Southern Corp.
NSC
1,933,000
$85,747,880
Procter & Gamble
PG
96,316,010
$5,356,133,316
Sanofi Aventis
SNY
2,903,933
$95,829,864
Sun Trusts Banks
STI
3,204,600
$63,707,448
Torchmark Corp.
TMK
2,823,879
$110,074,803
US Bancorp
USB
69,039,426
$1,440,852,820
USG Corporation
USG
17,072,192
$252,668,441
Union Pacific Corp.
UNP
9,558,000
$575,391,600
United Parcel Service
UPS
1,429,200
$77,719,896
United Health Group
UNH
4,500,000
$123,120,000
Wabco Holdings
WBC
2,700,000
$53,325,000
Wal-Mart Stores
WMT
19,944,300
$994,023,912
Washington Post Co.
WPO
1,727,765
$822,744,415
Wells Fargo
WFC
302,609,212
$7,807,317,669
Wellpoint Inc.
WLP
4,777,300
$254,773,409
Wesco Financial
WSC
5,703,087
$1,731,172,058
Share count as of 5/14/09. Market Value as of 8/3/09

Berkshire Hathaway's current stock portfolio lists 41 stocks. Some of these stocks were bought by Warren Buffet decades ago. Berkshire began to buy shares in the Washington Post company in 1973, for instance, and has never sold. One of Buffett's favorite sayings is that the best holding period is forever.

Not all of the holdings in Berkshire Hathaway's portfolio were bought by Mr. Buffett. Some were purchased by Lou Simpson, the highly regarded portfolio manager for the company's GEICO insurance subsidiary. It is not certain which stocks were bought by Buffett, and which by Simpson. According to the 13F, most of Berkshire's stocks are owned by several of the company's many subsidiaries.

Warren Buffett has been quite explicit over the years about the qualities he looks for in a stock investment. First, the company must have a simple to understand business model that lies within Mr. Buffett's "circle of competence". Judging from Berkshire's current holdings, this circle of competence includes insurance, banking, finance, manufacturing, and retail stocks. Mr. Buffett has often stated that he avoids technology companies because they lie outside his own purview.

A second criteria for a Warren Buffett stock is a high return on invested capital. He looks for companies that are able to achieve high returns on the new, incremental capital that it invests. In his letters to shareholders, Buffett has often pointed to Berkshire's See's Candy subsidiary as being able to show solid profits while needing very little in the way of new capital investment. In the case of See's, that has been both a blessing and a curse, since the company has not been able to expand outside of its western U.S. base. On the other hand, the free cash flow the company generates has been put to good use by the parent company under its chief investment officer, Mr. Buffett himself.

Another quality that Buffett looks for in the stocks in which he invests is a so-called "moat", or unique advantage, that insulates the company from cut-throat competition. Companies that sell commodity goods are generally considered unsuitable for investment. Instead he looks for companies that have a regulatory, brand-name, or business model advantage that allows them to achieve high profit margins without large capital investment needs. The Coca-Cola corporation, for instance has a world-wide brand name that could not be duplicated without a huge amount of spending by a potential competitor.

Can you pick stocks like Warren Buffett? Probably not. Not only does he posess a brilliant mind, but he has spent a long lifetime studying American business. His knowledge and wisdom can hardly be reproduced with a little weekend reading. Mr. Buffett has often recommended that individual investors are best served by investing in low cost index funds. Good advise, but who wants to hear it?

If you have an interest in Mr. Buffett's life and investment philosophy, you may be interested in my article on the best books about Warren Buffett.

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Comments 2 comments

yamanote profile image

yamanote 7 years ago from UK/Spain

Thanks Buffetology is pretty interesting, but what happens to BHathaway when he pops his clogs!?


Chuck Bluestein profile image

Chuck Bluestein 3 years ago from Morristown, AZ, USA

These are very conservative investments.

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