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

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
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 Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!