Buffett Watch -- Portfolio -- April 24, 2024

Locator: 470626BUFFETT.

There was an interesting data point regarding Warren Buffett on April 22, 2024 -- by Motley Fool, two days ago.

I'm curious if anyone else saw it. 

It is very, very, very subtle but if one follows Buffett close enough it was hard not to miss. 

Hint: compare the Motley Fool article with the Buffett portfolio watch noted dated September 30, 2023. In case that link breaks or disappears, the important note is within this screenshot:

Most recent --

Kiplinger, March 7, 2024, link here.  

From Forbes, February 15, 2024:

Because the 13F does not include international stocks, Berkshire Hathaway initially announced the acquisition of about 5% of five Japanese trading companies at the end of August 2020. These holdings are Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. Ltd., and Sumitomo Corp. Buffett revealed in April 2023 that Berkshire increased its stakes in these companies to 7.4%. Buffett indicated that these were intended to be long-term holdings, and Berkshire may still increase its stake to 9.9%.

Note: if foreign stocks were included in 13F, two Japanese companies would hold positions #9 and #10. 

Top fifteen holdings in the BRK equity portfolio:

It will be interesting if anyone catches this. I'll come back to this later.

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So, Here We Go
This Is What Jumped Out At Me

For the past year or so, or maybe even longer, we keep hearing that AAPL makes up  41% of BRK equity portfolio. So, that 41% stands out -- it's what I remember.

But in the Motley Fool article, the author said Apple accounts for 50% of the BRK equity portfolio.

That was such a huge jump, from 41% to 50%, I wondered if Motley Fool  was "rounding up," That would be very, very unusual for Motley Fool to round up -- certainly that amount. So, I checked, and, indeed, without rounding up, AAPL now makes up 50% of BRK's equity portfolio. 

Interestingly I have the same problem. Not by design, but completely "by accident" my equity portfolio is way over-weighted with AAPL, but that causes at least two problems:

• the entire portfolio moves on the volatility of AAPL; and,
• I lean toward a "growth" portfolio and AAPL is turning the portfolio into a "value" portfolio, and worse,
• while the rest of the tech space is doing very well, not the same can be said for AAPL.

Bottom line, AAPL, relative to the rest of BRK's equity portfolio, increased in value to the rest of the holdings. Why isn't BRK reacting to that?

In the past year, these have handily beat the money market funds:

• UNP: up 27% in one year
• SCCO: up 48%in one year
• NVDA; up over 206% in one year
• JPM: up 43% in one year

Confusing:

•  I find it interesting that BRK is not adding to its AAPL position when shares dip; or,sell some AAPL shares on periodic jumps in the share price. 

BRK does not seem to be an actively managed portfolio.

• When it comes to BRK, it almost appears the managers have become passive investors, taking very little active interest in managing their equity portfolio. 

More confusing: 

• I have not been selling any of my AAPL shares (in fact, I'm adding to my AAPL position on huge pullbacks) but I'm adding "new money" to my equity portfolio. Warren Buffett talks about his "secret sauce," dividends, and it's amazing, at least to me, he's not using that "new money" of balance a portfolio that is clearly no longer a diversified portfolio. 

The BRK equity portfolio. Confusing -- why so many ticker symbols that are so inconsequential?

• 50% AAPL -- one ticker
• 42% legacy, energy -- eight ticker symbols
• BAC: 10%
• AXP: 8%
• KO: 7%
• CVX: 6%
• OXY: 4%
• KHC: 4%
• MCO: 3%
• DVA: 1%
• which leaves 8% --  approximately 52 other ticker symbols -- each ticker symbol representing less than 1% of the portfolio and the bottom 10 each representing 0.05% or less
• nine ticker symbols each represent 0.02% or less
• what an unusual portfolio; it's almost as if BRK has six or seven low-tier money managers that have their hobby horses and C-suite is letting them do what they want with a handful of tiny holdings.
  

We can discuss all the reasons why Apple went from 41% to over 50% of the portfolio in dollar value despite the number of shares of AAPL staying the same. I'm not going to do that except to say the reasons were not good, at least in my mind.

I could write a lot more, but I think I will leave it at that. 

13F: link here.

From Forbes, February 15, 2024:

Because the 13F does not include international stocks, Berkshire Hathaway initially announced the acquisition of about 5% of five Japanese trading companies at the end of August 2020. These holdings are Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. Ltd., and Sumitomo Corp. Buffett revealed in April 2023 that Berkshire increased its stakes in these companies to 7.4%. Buffett indicated that these were intended to be long-term holdings, and Berkshire may still increase its stake to 9.9%.

The entire portfolio:

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