A Survey of Buffett's Recent Purchases
Bloomberg takes a look at Buffett's recent investments, noting that many of them are currently under water. This could make for fertile hunting ground for the rest of us, as paying less than Buffett seems to be, on average, a good long-term deal.
Billionaire Warren Buffett likes to say his favorite length of time to hold a stock is “forever.” That’s a good thing because some of his more recent investments aren’t making him money in the short run.
Buffett, 78, ranked the richest man in the U.S. by Forbes magazine, placed bets over the past two years on companies ranging from Kraft Foods Inc. and Johnson & Johnson to oil producer ConocoPhillips. After last year’s 38 percent drop in the Standard & Poor’s 500 Index, they are among the stocks trading at less than what he paid when he last added their shares to the holdings of his Berkshire Hathaway Inc.
The man heralded as the “Oracle of Omaha” tells acolytes he evaluates companies based on their stability, their competitive advantage and what he thinks they’ll be worth years into the future, instead of trying to find the moment when their stocks are at their lowest. The declines in his recent equity purchases suggest he could have waited before taking the plunge.
“People like to second guess Warren Buffett, but it’s not just a flip question to ask if he should have kept his powder dry a bit longer,” said Jeff Matthews, author of “Pilgrimage to Warren Buffett’s Omaha” and founder of Ram Partners LP, a hedge fund in Greenwich, Connecticut. “He’s paid dramatically higher prices than where some of them are now trading at, so you have to wonder if he was too quick on the trigger.”