Investing Themes from Warren Buffett: Wells Fargo & Co (WFC), H.J. Heinz Company (HNZ), DIRECTV (DTV)

Page 1 of 2

In his highly anticipated letter to shareholders, the Oracle of Omaha drops little gems for his readers. This year the Chairman ofBerkshire Hathaway Inc. (NYSE:BRK.B) didn’t disappoint either. Here are some of the notable investing themes and tips from Mr. Buffett.

1.Buffett Still Likes Big Blue and Wells Fargo & Co (NYSE:WFC)

Of the “Big Four” investments in Berkshire’s common stock portfolio, the company continued to ramp up purchases of International Business Machines Corp. (NYSE: IBM). As a result, Berkshire now owns roughly 6% of Big Blue, and this will notch up higher as IBM has a massive share repurchase plan in place. IBM bought back shares worth $12 Billion in the last year, which was a key driver for the stock price.

Wells Fargo & Co (NYSE:WFC)Buffett likesWells Fargo & Co (NYSE:WFC)a lot and added more shares recently. In fact, Wells Fargo & Co (NYSE:WFC) ousted The Coca-Cola Company (NYSE: KO) to be largest common stock holding in Berkshire’s portfolio. And rightly so, the conservatively managed bank has been hitting record net income numbers while improving its ROE simultaneously, it is even buying back shares as well. Berkshire now owns more than 8.7% of Wells Fargo & Co (NYSE:WFC), which is almost certain to go up in the near future.

2.Ever Optimistic About the US

Buffett has always been one of the most vocal proponents of the country’s bright future, even during economic downturns. And his optimism continues, Berkshire spent $9.8 Billion on plant and equipment in F’12, 88% of which was in the U.S.

And he expects to spend even more in capital expenditures in 2013. In his words,“The Dow Jones Industrials advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions. And don’t forget that shareholders received substantial dividends throughout the century as well. “

3.Investment Managers Are Outperforming

Berkshire’s new duo of investment managers, Ted Weschler and Todd Combs are doing very well. In fact, both of them outperformed the S&P 500 by more than 10%, and did better than Mr. Buffett himself. As a result, the fund allocation to each has been notched up to roughly $5 billion. As a result, both Todd and Ted now have a much bigger say in Berkshire’s oversized portfolio.

The duo will certainly do well over time, and their largest bet has been onDIRECTV (NASDAQ: DTV), in which the combined holdings of both at year end 2012 were worth $1.15 billion. Investors should take heed; the duo will almost certainly take on the CIO role in the post-Buffett era.

4. Berkshire Hathaway Is the Best Mutual Fund in the World?

This phrase has been coined numerous times before, and rightly so. Unlike numerous other mutual funds, there is no front-load or back-end fees, management fees, marketing fees etc. And even better, Berkshire Hathaway doesn’t engage in high volume trading that many mutual funds do, often to align themselves with an index or their own investment mandate, both of which impact the performance.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!