Despite the brief mini-bear of Q4 Berkshire’s stock buys exceeded sells by less than $1 billion despite a $100 billion cash position.
The fact that Buffett didn’t buy the dip is important information. He did, however, make adds to six large banks, swamping all other actions on the buy side.
Despite its large decline, he didn’t buy more Apple to my relief; Apple’s okay, but maybe not as 8% of Berkshire’s market cap.
Buffett’s younger associates seem to be growing toward a circle of competence buying StoneCo, a Brazilian financial tech company, and Liberty tracking stocks of the kind liked by Gabelli and Greenblatt.
Next weekend’s Annual Report will tell if he bought back Berkshire shares in size, and his Shareholder Letter may reveal more about his market and sector views.
Gregory (Scotland Yard Inspector): “Is there any other point to which you would wish to call my attention?”
Holmes: “To the unusual incident of the dog in the night-time.”
Gregory: “The dog did nothing in the night-time.”
Holmes: “That was the curious incident.”
“Silver Blaze,” by Sir Arthur Conan Doyle
The 4th quarter 13F filing for Berkshire Hathaway (BRK.A)(BRK.B) was made available to the public on February 14. It was a particularly interesting filing as it neatly captured more or less the exact period of the brief mini-bear which dominated equity markets for the last quarter of 2019. I have to say I was almost holding my breath while waiting to see Buffett’s buys and sells.
I had one hopeful expectation and one fear. I hoped and expected that Buffett would add to his bank positions. That turned out to be the case. I feared that he might add strongly to his position in Apple (AAPL), which I don’t entirely agree with. He did not. In fact, an action by one of his younger associates walked back Berkshire’s Apple position by about 1%. I have to say that I wouldn’t have minded if Buffett had sold a bit too, but I’m at least relieved that he didn’t buy more.
Neither banks nor Apple was the real story. It was easy to come up with the headline: BUFFETT DIDN’T BUY THE DIP. The market was down 20% for about a day, but Buffett didn’t bite on it. The net buying in Berkshire’s portfolio of publicly traded stocks was minuscule – less than $1 billion despite the fact that the cash available was more than $100 billion. That doesn’t mean that Berkshire’s 13F filing was dull and without significance. To the contrary, Buffett’s inaction was like the dog that didn’t bark – a “curious incident” indeed.