‘Greedy When Others are Fearful’: Warren Buffett’s New Stock Picks Since 2022 Market Peak

Published on November 30, 2023 at 8:27 am by Swati Goyal in Hedge Funds, News

In this piece, we will look at Greedy When Others are Fearful’: Warren Buffett’s new stock picks since 2022 market peak. If you want to see more stocks in this selection, then take a look at Warren Buffett’s 5 New Stock Picks Since 2022 Market Peak.

During 2008, amidst the massive financial crisis that shook the global economy, Warren Buffett said something that encapsulates the wisdom of his investment philosophy:

“Be fearful when others are greedy, and be greedy when others are fearful.”

Most investors tend to give in to the short-term news cycle in the financial markets. On the other hand, long-term investors like Warren Buffett have a broader vision and they know there’s always a rebound after every dip.

Buffett is a value investor who has affirmed his status as one of the most successful hedge fund managers, with a net worth of about $120 billion. He has made his wealth purely by investing in undervalued stocks and never overpaying to take advantage of the discounted valuations. The legendary investor is driven by the investment philosophy that focuses on companies that he believes will keep growing because of their growth and performance.

During the third quarter, Buffett added to his existing positions and acquired new ones, with the market edging lower for the better part of the year. Occidental Petroleum Corporation (NYSE:OXY) is one of the companies Buffett turned to as the overall market remained under pressure, oil prices tumbled, and oil prices rallied as the Russia-Ukraine war escalated. As the selloff in the equity market hit double-digit percentage levels in Q3 2022, Buffett bought stakes in Louisiana-Pacific Corp (NYSE:LPX) and Jefferies Financial Group Inc (NYSE:JEF) as fear continued to send shockwaves.

Our Methodology

We looked at Berkshire Hathaway’s 13F filings and found Buffett’s top picks in 2022. We explained why they stand out. The stocks are ranked by the hedge fund’s stake in them in Q3 2023. The number of hedge funds that owned each stock in Q3 2023 is also given.

Warren Buffett’s New Stock Picks Since 2022 Market Peak

10. Jefferies Financial Group Inc. (NYSE:JEF)

Berkshire Hathaway’s Equity Stake in Q3 2023: $15.88 Million

Stock Gain since Buffett Investment: 14%

Number of Hedge Fund Holders: 34

The US Federal Reserve’s hiking interest rates triggered an aggressive market sell-off. As fear gripped the market, Buffett saw an opportunity in Jefferies Financial Group Inc. (NYSE:JEF). This financial services company was well poised to benefit from a high-interest rate environment. Jefferies Financial Group Inc. (NYSE:JEF) engages in investment banking capital markets and asset management business.

With the market deep in sell-off, Buffett acquired stakes worth $12.79 million in Jefferies Financial Group Inc. (NYSE:JEF) in Q3 2022, taking advantage of the depressed valuations. The investment has gained 14% since Buffett invested, and Berkshire Hathaway exited Q3 2023 with stakes worth $15.88 million. Jefferies Financial Group Inc. (NYSE:JEF) also boasts a 3.44% dividend yield.

9. Markel Group Inc. (NYSE:MKL)

Berkshire Hathaway’s Equity Stake in Q3 2023: $233.71 Million

Stock Gain since Buffett Investment: 10%

Number of Hedge Fund Holders: 32

Markel Group Inc. (NYSE:MKL) is a diverse financial holding company that markets and underwrites speciality insurance products. Markel Group Inc. (NYSE:MKL) offers general and professional liability personal line marine and energy insurance compensation products.

Markel Group Inc. (NYSE:MKL) has gained nearly 10% since Buffett acquired stakes worth $620 million in the first quarter of 2022. While Berkshire Hathaway has trimmed its exposure to Markel Group Inc. (NYSE:MKL), it has benefited from price swings. It ended Q3 2023 with stakes worth $233.71 million, accounting for 0.07% of the portfolio.

In its investor letter for the second quarter of 2023, Polen Global SMID Company Growth Strategy shared its views on Markel Group Inc. (NYSE:MKL):

“Markel Group Inc. (NYSE:MKL) is a U.S. headquartered insurance company with three drivers; specialty insurance; public investments; and private companies. The company is often described as a “mini-Berkshire Hathaway” and has done a terrific job for decades underwriting policies and investing the float to produce significant returns, in our belief. The company seeks market leadership in each pursuit, understanding the customer needs and providing quality products and services. We think its valuation is very attractive and expect a mid-teens rate of return over the next five years.”

8. Louisiana-Pacific Corporation (NYSE:LPX)

Berkshire Hathaway’s Equity Stake in Q3 2023: $389.37 Million

Stock Gain since Buffett Investment: 8.6%

Number of Hedge Fund Holders: 38

Buffett turned to Louisiana-Pacific Corporation (NYSE:LPX) last year to gain exposure in the industrial sector last year as the overall market remained under pressure. Louisiana-Pacific Corporation (NYSE:LPX), through its subsidiaries, offers building solutions used in new home construction, repair, and re-modelling.

Louisiana-Pacific Corporation (NYSE:LPX) has gained about 8.6% since Buffett acquired stakes worth $296.69 million in Q3 2023.

In its Q1 2023 investor letter, SouthernSun SMID Cap Strategy expressed its opinion on Louisiana-Pacific Corporation (NYSE:LPX):

“We initiated a position in Louisiana-Pacific Corporation (NYSE:LPX) during the quarter. LPX is a leading producer of oriented strand board (OSB) and siding, primarily in North America. In recent years, management has transformed the business from a focus on producing commodity OSB products into a “building solutions” company producing more value-add OSB products and engineered wood siding. The company is organized into two divisions – siding solutions and OSB…” (Please click here to read the full text)

7. Ally Financial Inc. (NYSE:ALLY)

Berkshire Hathaway’s Equity Stake in Q3 2023: $773.72 Million

Stock Gain since Buffett Investment: -42%

Number of Hedge Fund Holders: 43

Buffett turned to Ally Financial Inc. (NYSE:ALLY) early last year to gain exposure in the financial services sector as the overall market remained under pressure. The company provides digital finance products and services to various customers.

Buffett acquired stakes worth $389.99 million in Ally Financial Inc. (NYSE:ALLY) in the first quarter of last year and has continued to buy and sell ever since. Through Berkshire Hathaway, the legendary investor held stakes worth $773.72 million as of Q3 2023, accounting for 0.24% of the portfolio. While Ally Financial Inc. (NYSE:ALLY) is down by 42% since Buffett made the first investment, it is a solid play for passive income as it pays a 4.43% dividend yield.

In its Q1 2023 investor letter, Silver Beech Capital discussed its views on Ally Financial Inc. (NYSE:ALLY):

“Ally Financial Inc. (NYSE:ALLY) is the largest all-digital bank in the United States, the 22nd largest bank by total assets ($192 billion), the nation’s leading prime auto lender (with 6.5 million consumer customers), and leading auto floorplan lender (with over 23,000 dealer relationships). Most of Ally’s assets are auto loans and finance receivables, but Ally also offers consumer protection insurance through its dealer channels and operates small corporate and mortgage lending businesses. Notably, Ally also offers some of the industry’s most competitive deposit products: Ally was awarded “Best Checking Account”, “Best Saving Account”, and overall “Best Online Bank” by third party reviews and was the first large bank to eliminate overdraft fees. We believe Ally’s intrinsic value is more than 40% greater than its March 31 share price…”(Click here to read the full text)

6. Nu Holdings Ltd. (NYSE:NU)

Berkshire Hathaway’s Equity Stake in Q3 2023: $776.61 Million

Stock Gain since Buffett Investment: 160%

Number of Hedge Fund Holders: 50

Nu Holdings Ltd. (NYSE:NU) is a financial services company providing a digital banking platform and financial services. It provides Nu and Ultraviolet cards, and mobile payments for Nu Account customers. It also offers Nu Personal Accounts, a digital account for personal finance.

Nu Holdings Ltd. (NYSE:NU) has been one of Buffet’s new stock picks since 2022. The legendary investor acquired stakes worth $435.97 million during Q4 of 2022. The value of the investment has since increased to $776.61 million as of Q3 2023, with Nu Holdings Ltd. (NYSE:NU) rallying by about 160%.

Click to continue reading and see Warren Buffett’s 5 New Stock Picks Since 2022 Market Peak.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on May 1, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on May 2, 2024 at by Insider Monkey Staff

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

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Click to continue reading…

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