Berkshire Hathaway's chief continued his purge of bank stocks during the third quarter, but Warren Buffett also added six brand-new positions.
The stock market came roaring back during the third quarter,
and Warren Buffett busied himself by adding and selling a number of stakes in
Berkshire Hathaway's (BRK.B) portfolio.
The most notable theme of the three months ended Sept. 30
was the continuing saga of Berkshire's shrinking bank stocks. Buffett has been
cutting the holding company's position in banks for multiple quarters, but he
really doubled down in Q3. In just about every other case, the selling was just
the trimming of a position, although Buffett did dump one stock in its
entirety.
Most interesting, as always, is what Warren Buffett was
buying. With the COVID-19 pandemic gripping the world, perhaps it shouldn't
come as a surprise that Berkshire Hathaway added a handful of pharmaceutical
stocks to its portfolio. Buffett also picked up a telecommunications company
and a rare initial public offering (IPO).
We know what the greatest long-term investor of all time has
been up to because the U.S. Securities and Exchange Commission requires all
investment managers with more than $100 million in assets to file a Form 13F
quarterly to disclose any changes in share ownership. These filings add an
important level of transparency to the stock market and give Buffett-ologists a
chance to get a bead on what he's thinking.
When Buffett starts a new stake in some company, or adds to
an existing one, investors read into that as a vote of confidence. But if he
pares his holdings in a stock, it can spark investors to rethink their own
investments.
Here's the scorecard for what Warren Buffett was buying and
selling during the third quarter of 2020, based on the most recent 13F that the
company filed on Nov. 16. And remember: Not all "Warren Buffett
stocks" are actually his picks. Some smaller positions are believed to be
handled by lieutenants Ted Weschler and Todd Combs.
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