FRI, OCT 06, 2023

WARREN BUFFETT WATCH

Tenth straight day of selling pulls HP stake below 10%

In what appears to be a consistent effort to sharply reduce, or even completely eliminate, its HP holdings, Berkshire has reduced its stake in the PC and printer maker by 19% over 13 days of selling this month.

That includes 10 straight sessions from September 20 through Tuesday of this week in which the final three days included two of the biggest one-day totals.

Tuesday's reduction brought Berkshire's stake under 10%, which means it will no longer be required by SEC rules to disclose any future stock moves within two business days.

As a result, we probably won't find out how far Berkshire goes until mid-February when the company releases its year-end portfolio snapshot.

But as CNBC.com's Yun Li points out, Warren Buffett has said that when Berkshire changes its mind on an investment, "We don't take half measures or anything of the sort."

Talking about his decision to sell all its shares of four of the nation's airlines as the COVID pandemic was beginning, Buffett said at the 2020 annual meeting, "When we sell something, very often it's going to be our entire stake... We don't trim positions ... any more than if we buy a hundred percent of a business, we're going to sell it down to 90 percent or 80 percent."

As of Tuesday, Berkshire held almost 98 million of the 121 million shares it purchased during the first half of last year.

At today's closing price of $25.91, they have a market value of $2.5 billion.

HP appears to have been a losing bet. So far, the average selling price has been $26.84 per share, while the stock traded in the mid-to-high $30s during the period in which the position was established.

If Berkshire does indeed sell the entire stake, it will be the latest example of the company reversing course after a relatively short period of time.

This year, we learned that Berkshire dumped a multi-billion-dollar stake in Taiwan Semiconductor just months after acquiring it.

Last year, Berkshire also did a turnaround on Verizon, although it wasn't as rapid as the TSCM sale.

While Buffett is often quoted as saying his favorite holding period is "forever," that doesn't mean Berkshire will never sell a stock.

At the 2009 annual meeting, he told investors that Berkshire will sell "if we lose confidence in the management, if we lose confidence in the durability of the competitive advantage, if we recognize we made a mistake when we went into it. We sell plenty of times."

But, he added, if you have a "wonderful business" then "when in doubt, keep holding."

Buffett gains on Forbes list of richest Americans

Warren Buffett has moved up one notch and $24 billion on the just-released 2023 Forbes 400 list of the richest people in America.

He is #4 with an estimated net worth of $121 billion as of September 8 ($116B as of today), below Oracle's Larry Ellison with $158 billion and above Google co-founder Larry Page with $114 billion.

Last year, Buffett was #5 with $97 billion. Berkshire shares, which make up almost all of Buffett's wealth, are up about 26% over the past year.

And joining the list at #379 with $3 billion this year: Stewart Horejsi and his family.

Forbes says he began buying Berkshire shares "for as little as $265 per share after reading John Train's 'The Money Masters' in 1980."

Munger contributes $40 million to California museum

Charlie Munger has donated Berkshire shares worth around $40 million to a museum in California.

The Associated Press quotes a representative of the Henry E. Huntington Library and Art Museum in San Martino, California as saying the money will be used to build more than 30 residences for visiting scholars.

Ten years ago, the AP says, Munger donated $33 million of Berkshire stock to help pay for an education and visitors center at the museum.

BUFFETT AROUND THE INTERNET

Some links may require a subscription

Barron's (subscription): If Berkshire Hathaway Bought or Sold a Stock, It Doesn’t Mean Warren Buffett Did

Nikkei Asia: Warren Buffett is right to be 'proud' of Japan's trading companies

Fast Company: Warren Buffett and Elon Musk’s tiny salaries show how CEO pay numbers can be misleading

CNBC Pro (subscription): What Warren Buffett learned from his past investment mistakes, including IBM and airlines

Fortune: Warren Buffett–backed BYD is just over 3,000 cars away from overtaking Tesla as the world’s biggest seller of EVs

Fortune on Yahoo Finance: AI is getting ‘more hype than it deserves,’ Warren Buffett’s right-hand man Charlie Munger says

HIGHLIGHTS FROM THE ARCHIVE

Buffett prefers “obvious” business decisions (1995)

Warren Buffett and Charlie Munger say they like to make investment decisions where the decision is so easy that there’s no need to do complicated calculations.

BERKSHIRE STOCK WATCH

BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Oct. 6, 2023

Berkshire's top holdings of disclosed publicly-traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.

Holdings are as of June 30, 2023 as reported in Berkshire Hathaway’s 13F filing on August 14, 2023, except for:

Mitsubishi and Mitsui, which are as of June 12, 2023. Tokyo Stock Exchange prices are converted to U.S. dollars from Japanese yen.

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.)

If you aren't already subscribed to this newsletter, you can sign up here.

Also, Buffett's annual letters to shareholders are highly-recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch

900 Sylvan Avenue, Englewood Cliffs, NJ 07632

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