Major Changes to Berkshire Hathaway’s Portfolio During Second Quarter 2017
In its SEC Form 13-F filing after the market closed today, Berkshire Hathaway reported several large changes to its portfolio during the quarter ending June 30, 2017 that had not previously been disclosed.
Its largest additions were:
(1) $500 million initial investment in Synchrony Financial (credit card company that was spun off from General Electric in 2015) (NYSE:SYF).
(2) $500 million additional investment in Bank of New York Mellon (NYSE:BK).
(3) $500 million additional investment in Liberty Media SiriusXM (Nasdaq:LSXMA) (Nasdaq:LSXMK).
(4) $350 million additional investment in General Motors (NYSE:GM).
The largest reductions were:
(1) $300 million sale of its entire position in General Electric (NYSE:GE).
(2) $300 million sale of almost its entire position in Wabco (NYSE:WBC).
I am quoted in a Bloomberg article on these portfolio changes:
“The outlook for GE has certainly soured,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business, citing the recent departure of Jeff Immelt as chief executive officer. “The CEO essentially was forced to resign.”
Kass said Berkshire’s decision to sell GE and buy Synchrony in the same period was probably a coincidence. Buffett oversaw the GE holding, and one of his deputies — Todd Combs or Ted Weschler — was likely responsible for the new investment, given its smaller size in the Berkshire portfolio, Kass said. The filing doesn’t say which money manager is responsible for each pick.
Rather interesting that ~ 35m shares of Sirius XM Holdings, Inc. were sold, while significant additions were made to Liberty Media’s tracking stock of Sirius XM Holdings.
Adding 20% to GM does not suggest fear of Tesla, whether it achieves its goal of 500,000 vehicles/year built and sold by the close of 2018, or not.
Immelt’s decision at GE to double-down on the petroleum industry looks like a major fumble at this point; and unless the domestic industry permanently drains the commercial reserve back down inside of the long-run window of crude, GE will likely continue to suffer the wrath of that decision. BRK likely decided not to hold any breath on how many years that might take to accomplish.