A 13F filing released last night disclosed the stocks Warren Buffett had been buying and selling during the first three months of 2023. And there were a few surprises on the list.
At first sight, it looked as though Berkshire Hathaway (NYSE:BRK.B) had added to its investments in Apple, Bank of America, and Diageo. But in fact, this wasn’t the case.
Berkshire’s insurance subsidiaries
One of Berkshire’s insurance subsidiaries – Gen Re has its own investment portfolio. Despite being part of Buffett’s empire, this isn’t controlled by the Oracle of Omaha.
As of the most recent report, Berkshire has incorporated the stock investments of Gen Re’s investment portfolio into its own 13F filing. This has had some interesting consequences.
Take Apple, for example. Last night’s filing disclosed Berkshire’s investment in the consumer electronics company as having grown by some 20.4m shares.
This might seem unsurprising, given the stock traded throughout January below the $150 price tag Buffett previously identified as attractive. But Berkshire wasn’t buying.
The 20.4m shares were previously owned by the investment arm of the Gen Re subsidiary. The only difference is that they’ve now been brought under the Berkshire filing.
The same is true of Bank of America. Buffett buying the stock while preaching an uncertain outlook for banks and selling down shares in other US financials would have been surprising.
But the additional 22.8m shares Berkshire reported ownership of actually came from its subsidiary. Despite the cheap price, Buffett doesn’t seem to have been buying.
Lastly, Berkshire’s stake in Diageo is also explained in this way. While the stock is a typical Buffett investment, its price-to-earnings (P/E) ratio of around 20 was enough to deter the legendary investor.
What has Buffett been buying?
Buffett has been much quieter in the stock market than the 13F would suggest. But there are a couple of stocks he’s been putting Berkshire’s cash into.
The first is Occidental Petroleum. He increased his stake in the oil company by around 9% during the first three months of 2023 – and not by incorporating Gen Re’s holdings.
This was known about, since Berkshire reports its Occidental transactions in real time as a significant owner of the company. But it’s key for another reason.
Since January, Berkshire has reduced its stake in oil major Chevron by almost 19%. And that’s including the effect of reporting an additional 2m shares from Gen Re’s portfolio.
To my mind, this makes Berkshire’s acquisition of Occidental shares all the more significant. It’s not just a generic bet on oil – it’s something specific to the company itself.
The other stock Buffett has been buying is Berkshire Hathaway itself. The company spent around $1.8bn repurchasing its own shares since the start of the year.
Trying to understand what Buffett is doing can be informative. But my plan to invest like him is to follow his example and buy Berkshire shares myself.
That way, I don’t have to worry about trying to read his mind. I can just let the Berkshire CEO get on with the job for me.
