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In with health care, out with banks The big theme in this week's Berkshire Hathaway 13F stock portfolio disclosure to the SEC is a reduction for financials and an increase for health care stocks during the third quarter (July through September).
Using September 30 stock prices for the calculation (to remove the impact of price moves during the quarter), Berkshire added health care shares valued at roughly $5.7 billion.
That includes new stakes in AbbVie, Merck, and Bristol-Myers Squibb, each worth just under $2 billion. Pfizer is another new name, although that holding is much smaller at $136 million. (There was a small reduction for DaVita, an existing position.)
Bank of America is the only bank stock position that increased in the quarter, with shares worth $2 billion added. (That purchase had been previously disclosed in a mid-quarter filing.)
Berkshire sold shares worth a total of in four other financials
Combined with sales in the first two quarters of the year, Berkshire's JPMorgan Chase stake, worth $8.3 billion at the end of last year, has been almost entirely eliminated.
Sales of Wells Fargo, which started picking up steam in the second half of 2019, also continued. At the end of June that year, Berkshire owned almost 410 million shares, then valued at $19.4 billion.
As of September 30 this year, only 127 million shares remained, with a value of around $3 billion.
So, does this mean Warren Buffett is a health care bull? Probably not. We'll note that Buffett has said Todd Combs and Ted Weschler make their stock portfolio buying and selling decision themselves and do not need, or get, his approval.
We'll also assume Josh was using the phrase "old man" affectionately.
Berkshire's secret stock (or stocks) The company's third quarter portfolio filing includes this line: "Confidential information has been omitted from the public Form 13F report and filed separately with the U.S. Securities and Exchange Commission."
It's usually a sign Berkshire is in the process of building a stock position and doesn't want "copycat" buyers to drive up the price until it's done.
Berkshire has received SEC permission to keep a secret several times in the past, including when it was building its IBM stake in 2011. (That investment didn't work out very well.)
We'll find out eventually what's been happening. In the meantime, some potential clues.
Berkshire's Q3 10Q report, when compared to the Q2 report, shows $17.6 billion of equity purchases, while its 13F purchases add up to $9.8 billion (based on the September 30 values).
That's a $7.8 billion difference. (The 13F only includes publicly-traded U.S. stocks, so it's possible the gap could be made up of foreign stocks that don't need to be included in the 13F. And at the end of August, Berkshire did reveal purchases of sizable stakes in five Japanese trading companies, although the purchases had been made over the previous 12 months.)
In the Q3 10Q there's also an increase of over $15 billion in Berkshire's cost basis for "Commercial, industrial, and other" equities that doesn't appear to be fully accounted for by the 13F buys.
Stay tuned.
Dam deal solves "complex problem" Berkshire's PacifiCorp energy subsidiary is part of a new deal to move ahead with the long-delayed removal of its four outmoded hydroelectric dams along the Klamath River that runs through southern Oregon and Northern California.
PacifiCorp had been concerned about liabilities from the project. Under the deal, the two states will provide financing for unexpected costs or damages.
It's hoped that removing the dams will bring salmon back to the river.
Tribal groups and environmentalists, along with California Governor Gavin Newsom, have been urging Buffett to support the dam removal project.
In a news release from Newsom's office, Buffett is quoted as praising the collaboration on a deal that solves "a very complex challenge."
"I recognize the importance of Klamath dam removal and river restoration for tribal people in the Klamath Basin. We appreciate and respect our tribal partners for their collaboration in forging an agreement that delivers an exceptional outcome for the river, as well as future generations. Working together from this historic moment, we can complete the project and remove these dams."
BERKSHIRE STOCK WATCH
BERKSHIRE'S TOP STOCK HOLDINGS - Nov 20, 2020
Berkshire's top holdings of disclosed publicly-traded U.S. stocks by market value, based on today's closing prices.
Holdings are as of September 30, 2020 as reported in Berkshire Hathaway and New England Asset Management's 13F filings on November 16, 2020.
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
QUESTIONS OR COMMENTS
Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)
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-- Alex Crippen, Editor, Warren Buffett Watch
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