{"id":11298,"date":"2023-05-20T05:19:13","date_gmt":"2023-05-20T09:19:13","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/berkshire-stock-buys-still-get-a-buffett-bounce-but-maybe-not-the-expected-results\/"},"modified":"2023-05-20T05:19:14","modified_gmt":"2023-05-20T09:19:14","slug":"berkshire-stock-buys-still-get-a-buffett-bounce-but-maybe-not-the-expected-results","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=11298","title":{"rendered":"Berkshire Stock Buys Still Get a Buffett Bounce\u2014but Maybe Not the Expected Results"},"content":{"rendered":"
\n

Warren Buffett is justifiably renowned as a stockpicker. But following
\n Berkshire Hathaway
\n into new equity holdings is no sure thing. This past week, Berkshire disclosed it had bought $900 million of
\n Capital One Financial
\n shares. Capital One rose 13.5% to $98 on the week\u2014a \u201cBuffett bounce.\u201d <\/p>\n

Capital One may be a winner\u2014or not. In early 2022, Berkshire bought
\n Paramount Global,<\/span><\/p>\n

Citigroup,<\/span>
\n and
\n HP.<\/span>
\n All three now are likely below Berkshire\u2019s cost, Barron\u2019s<\/em> estimates\u2014particularly Paramount, off some 50% from early 2022 levels. Berkshire bought $8 billion of
\n Verizon Communications
\n in late 2020, then sold it at a loss in 2022. In contrast, Berkshire is ahead on its $20 billion
\n Chevron
\n and $12 billion
\n Occidental Petroleum
\n stakes. <\/p>\n

\n

Berkshire has recently seen more rapid trading in its $350 billion portfolio. In late 2020, it acquired shares in
\n Merck,<\/span><\/p>\n

Bristol Myers Squibb,<\/span>
\n and
\n AbbVie.<\/span>
\n Those were reasonably well timed, but Berkshire sold them. It also bought and quickly ditched a stake in
\n Taiwan Semiconductor
\n ; Buffett wasn\u2019t comfortable with Taiwan\u2019s geopolitical risk. Berkshire has scored with five Japanese trading companies that Buffett began accumulating in 2020.<\/p>\n

Another issue: Who\u2019s buying? Buffett runs some 90% of the portfolio, with managers Todd Combs and Ted Weschler handling the rest. Berkshire doesn\u2019t disclose holdings by manager, but the largest and longest-standing ones are probably mostly Buffett\u2019s. Positions under $3 billion go to Combs and Weschler. While Buffett likes to say his favorite holding period is forever, few new investments besides
\n Apple
\n seem to qualify. <\/p>\n

Write to <\/strong>Andrew Bary at andrew.bary@barrons.com<\/p>\n

Last Week<\/h4>\n

The X-Date Cometh<\/h2>\n

China\u2019s industrial and retail output fell at the start of the second quarter, and U.S. retail sales rose in April, though big-ticket home spending softened. The debt ceiling hung over everything: Treasury yields spiked as the deadline\u2014the June 1 X-date\u2014neared. Stocks rose on optimism over a deal, then fell as talks broke down. For the week, the
\n Dow Jones Industrial Average
\n gained 0.38%, to 33,426.63; the
\n S&P 500
\n rose 1.65%, to 4191.98; and the
\n Nasdaq Composite
\n surged 3.04%, to 12,657.90.<\/p>\n

Earnings Beat: Retail Edition<\/h2>\n

\n Home Depot
\n beat on earnings, but felt the pinch as consumers reduced home renovations, and warned on the year. Target and
\n TJX
\n beat, but offered weak guidance.
\n Walmart
\n beat and raised guidance. Reporting this coming week:
\n Costco,<\/span><\/p>\n

Best Buy,<\/span>
\n and
\n Lowe\u2019s.<\/span>\n <\/p>\n

Chasing a Debt Deal<\/h2>\n

Outlines of a debt-ceiling plan emerged before a Tuesday meeting at the White House between President Biden and congressional leaders. It ended on a cautiously optimistic tone as Biden left for the G-7 meeting in Japan, cutting short the trip to return Sunday. Talks seemed to progress, only to hit a \u201cpause\u201d Friday, a possible negotiating ploy. Meanwhile, along the southern border, the turmoil predicted after the lifting of Trump-era Title 42 failed to materialize, with migrant flows falling.<\/p>\n

Ukraine Rearms<\/h2>\n

Ukraine President Zelensky rounded up military assistance in a trip around Europe. Germany agreed to provide his country with $3 billion in military aid, and the U.K. offered cruise missiles and drones. Russia continued missile and drone attacks. In one night, Ukraine said its Patriot air defense systems shot down 18 Russian missiles, including six hypersonic rockets; in another, it felled 29 of 30 missiles.<\/p>\n

Sam Zell, 1941-2023<\/h2>\n

Sam Zell, Chicago real estate impresario and pioneer of real estate investments trusts at Equity Office Properties, died at 81. Zell\u2019s Polish parents fled to the U.S. in World War II. He was known as the \u201cgrave dancer\u201d for his skill as a distressed investor. <\/p>\n

Annals of Deal Making<\/h2>\n

\n KKR\u2019s<\/span>
\n Envision Healthcare, which provides emergency room and surgical center staffing, declared bankruptcy. KKR took Envision private five years ago. A complex restructuring involving lenders including Blackstone, Eaton Vance, Pimco, Centerbridge, and Angelo Gordon has already been negotiated…Pipeline operator
\n Oneok
\n said it is buying
\n Magellan Midstream Partners
\n for $14 billion, plus $5 billion in debt, creating a 25,000-mile oil and gas network between North Dakota and Texas…Australia\u2019s
\n Newcrest Mining
\n approved a $19 billion takeover bid from U.S.-based Newmont…As expected, Vice Media declared bankruptcy, but it has a buyer: creditors including Fortress Investment Group and Soros Fund Management, for $225 million plus liabilities…Despite regulatory blocks in the U.S. and U.K., the EU allowed
\n Microsoft\u2019s<\/span><\/p>\n

Activision Blizzard
\n deal to move forward…The Federal Trade Commission sought to block
\n Amgen\u2019s<\/span>
\n $28 billion acquisition of
\n Horizon Therapeutics.<\/span>\n <\/p>\n

Write to <\/strong>Robert Teitelman at bob.teitelman@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Warren Buffett is justifiably renowned as a stockpicker. But following Berkshire Hathaway into new equity holdings is no sure thing. This past week, Berkshire disclosed it had bought $900 million of Capital One Financial shares. Capital One rose 13.5% to $98 on the week\u2014a \u201cBuffett bounce.\u201d Capital One may be a winner\u2014or not. In early […]<\/p>\n","protected":false},"author":1,"featured_media":11299,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-11298","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nBerkshire Stock Buys Still Get a Buffett Bounce\u2014but Maybe Not the Expected Results | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Warren Buffett is justifiably renowned as a stockpicker. 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