Warren Buffett Reduces Holdings In Consumer Stocks

In Berkshire Hathaway’s 2012 second quarter earnings report, Warren Buffett revealed that Berkshire’s holdings in consumer stocks were reduced during the quarter ending June 30.   By comparing Berkshire’s SEC 10Q filings for the first and second quarters, the following can be derived:

Berkshire reduced its equity investments in “Consumer products” from $12.296 billion to $9.843 billion on a cost basis, a reduction of $2.453 billion.  Buffett likely sold some of his shares in Kraft, and/or Johnson & Johnson, and/or Procter & Gamble.  By contrast, Berkshire increased its investments (cost basis) in “Banks, insurance, and finance” by $576 million (second quarter vs. first quarter), and by $414 million (cost basis) in “Commercial, industrial, and other” from the first quarter.   Buffett may have continued to add to his Wells Fargo investment, as he has each year since 2005.  In addition,  Todd Combs and/or Ted Weschler may have established new stakes or added to current investments in the latter two categories.

The quarterly earnings reports do not mention individual investments.  However, Berkshire’s SEC 13F filing due by August 15 will reveal changes to each of Berkshire’s holdings during the second quarter.

I am quoted in a Bloomberg article (August 6) on this topic:

Combs, Weschler

Some of the extra cash may be distributed to Ted Weschler and Todd Combs, former hedge fund managers whom Buffett hired in the past two years to help oversee investments, said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business. Buffett told Liu last month that his deputies will probably oversee about $4 billion apiece, compared with $2.75 billion at the beginning of this year.

Buffett may also use the funds to exit some derivatives bets, Kass said in a phone interview yesterday. Berkshire struck a deal after June 30 to cancel about half of the $16 billion in notional protection it sold against municipal and state bond defaults, according to the filing. Buffett’s firm may have to pay the counterparty to retire the obligations, Kass said.

The entire article is available at:


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