What did Warren Buffett Add to his Portfolio?
Warren Buffett is the 5th richest man in the world who made most of his fortune by investing in blue chip companies. Recently, his firm Berkshire Hathaway (NYSE: BRK) filed their 13F with the SEC highlighting the changes Buffett has made to the company’s holdings in FY2022 Q4. The market value of the portfolio increased from ~$295 billion to ~$299 billion in this quarter.
Buffett is famous for his patient investment style and has said that his favorite holding period is “forever”. However, Berkshire has been churning a lot of equity lately with 8 of the top 15 equity holdings in Buffett’s 2019 filings either sold completely or reduced substantially including Verizon Communications and a group of banking and drug stocks.
Let’s have a look at the big changes he made to the portfolio in this quarter.
The Big Sells
The most eye-catching sell for this quarter was Taiwan Semiconductor (NYSE: TSM). Berkshire sold 86% of its holdings in the company having added the stock to its portfolio just last quarter. The news of the stock sale dragged down TSM stock on the exchange by about 6.8% to $91.30 after an impressive performance in 2023 (up 23% YTD). It seems like Berkshire missed out on the fresh gains on the stock as well as most of it was sold before the turn of the year.
Berkshire also sold 91% of its stake in US Bancorp (NYSE: USB) and 60% of its shares in Bank New York Mellon (NYSE: BK) signaling the firm’s negative outlook on banking and financial services stock in the coming time. Both the stocks were sold at about 18–19% above their average buy price.
Other stake reductions were in Activision (12%), Mckesson Corp (10.7%), Chevron (1.4%), Ally Finl (0.67%) and Kroger Co (0.53%)
New Additions
The only notable addition in the portfolio was in American building materials manufacturer Louisiana Pacific Corp (NYSE: LPX) whose stake was increased by 21.5% to 7.04 million shares with a market value of $461 million. Berkshire also bought 2.42 million shares of Paramount Global, increasing the stake by 2.6%.
Warren Buffett didn’t miss the chance to add to his all-time favorite stock, Apple Inc. The stock represents almost 39% of the total portfolio and Berkshire bought a further 333k shares of the company in Q4.
Final Thoughts
A summary of the changes in the portfolio can be found below:
The fund returned about a 4.17% return in the quarter which was well below the market performance in Q4 2022 (S&P 500 index rose about 7%). The top 5 stocks still make up about 76% of the total portfolio showing the company’s belief in Apple, Bank of America, Chevron, Coca Cola, and American Express — all of which are part of the portfolio for a very long time. Berkshire might still be kicking itself over the early sale of Taiwan Semiconductor shares considering they most likely sold them at a loss and its stellar performance in 2023.
Now we await Warren Buffett’s shareholder letter due on the 25th of February.
