FRI, NOV 18, 2022
Berkshire buys big Taiwan Semiconductor stake ...
Three stocks were added to Berkshire Hathaway's portfolio during the third quarter.
Its new stake in Taiwan Semiconductor is, by far, the largest of the three.
Berkshire's 13F SEC filing this week shows that as of September 30, Berkshire owned a bit more than 60 million TSMC shares, (in the form of American Depository Receipts), worth more than $4.9 billion at today's closing price of $82.27.
Taiwan Semi's share price rallied sharply after Berkshire revealed Monday evening that it had taken a big stake, going from the low $70s to the low $80s, a gain of more than 11% for the week.
We don't know exactly when the shares were purchased, but the average closing price between July 1 and the end of September was $82.65, although it traded below $80 on 25 of the 65 days in the quarter.
Like other stocks in the chip sector, it has been falling for most of the past year due to lower demand as global economies weaken.
But The Wall Street Journal writes that many companies are optimistic about long-term demand. "Global sales are expected to roughly double to more than $1 trillion annually in the next decade, thanks to improvements in manufacturing capacity and subsidies for factory building by governments in the U.S. and Europe."
It is also a major supplier of chips to Apple, which is Berkshire's largest stock holding, currently worth $138 billion.
CFRA analyst Cathy Seifer tells the Journal, "There’s a school of thought that believes we’re close to a bottom for chip stocks," and it makes sense for Berkshire to be buying because Taiwan Semi "is considered by many to be a premier chip maker."
Another analyst, however, thinks Berkshire bought too early.
John Blank at Zacks tells CNBC Pro, "I would have probably waited for $50 or $60 on the shares like this, because you’ve got enough downside pressure on that stock."
According to FactSet, the median price target of 30 analysts following Taiwan Semi has its shares rising almost 30% from where they were before this week.
REUTERS/Ann Wang/File Photo
Then there's the question that comes up increasingly now that Berkshire's two portfolio managers are handling more and more of the company's investments.
Did Buffett make the call himself, or was it the work of Todd Combs or Ted Weschler?
Buffett has traditionally avoided tech stocks, but he's usually the one buying the portfolio's larger stakes.
Semper Augustus Investments' Chris Bloomstran tells Barron's, "It would be a very large allocation for Todd or Ted given the proportion of the equity portfolios they are responsible for. I don’t think it’s outside Warren’s circle of competence either. Durable profitability, great balance sheet and a high earnings yield. All characteristics of a Buffett investment."
.. and two much smaller stakes
Based on their very small size, the other two holdings added to the Berkshire portfolio are almost certainly Todd or Ted picks.
Louisiana-Pacific is now on the list with 5.8 million shares that are currently valued at $357 million. That is an 8.1% stake in the building materials manufacturer, making Berkshire's its third largest shareholder after Vanguard and BlackRock.
The other addition is 434 thousand shares of Jefferies Financial Group worth $16 million at today's close. That's tiny by Berkshire standards, raising the possibility that buying continued after the September 30 snapshot date.
Among the other notable changes:
Here's the entire list (but keep scrolling to get the latest from Charlie)
Munger: Musk's Tesla is 'minor miracle' but crypto is 'very, very bad'
CNBC's Becky Quick recently taped a remote interview with Charlie Munger. As usual, he had some strong opinions.
"Squawk Box" aired some excerpts:
Audio of their entire conversation is featured on the November 15 edition of the "Squawk Pod" podcast.
In a news release late today, Berkshire Hathaway says it came to its attention that "there is an entity using the name Berkshire Hathaway with a web address of berkshirehathawaytx.com."
There is, it continued, no affiliation between the "entity who has this web address" and Berkshire Hathaway, Inc. or Warren Buffett.
This is not a surprise, as the web site says it offers investments in cryptocurrency mining.
Reuters notes that in the site's listing of the financial authorities that it claims to be regulated by, two of the names are incorrect.
BUFFETT AROUND THE INTERNET
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BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Nov. 18, 2022
Berkshire's top holdings of disclosed publicly-traded U.S. stocks, and BYD, by market value, based on today's closing prices.
Holdings are as of September 30, 2022 as reported in Berkshire Hathaway’s 13F filing on November 14, 2022, except for:
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
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-- Alex Crippen, Editor, Warren Buffett Watch