Northern, WI 11/15/2012 (BasicsMedia)  —  Berkshire Hathaway (NYSE:BRK-A): Industrial Stocks in – Consumer Out  as Warren makes a portfolio shift, and when he does this it’s like the old E.F.  Hutton commercial when everyone stops what they are doing and gets within earshot of the E.F.  Hutton broker eating lunch…just so they could get a tip.  This add was iconic in the 1980’s and I can tell you they made this ad with Warren Buffet in mind.  I can tell you Berkshire is shifting the portfolio away from the consumer and investing in industrial production and manufacturing.  It may seem a subtle shift, but when you manage $250B you get everyone pointing their ears within earshot.

During Q3 2012 Berkshire’s (BRK.A) (BRK.B) US long stock portfolio increased marginally from $74.3B to $75.3B. The total number of holdings increased from 37 to 38 this quarter. The new positions are Deere & Company (DE), Media General (MEG), Precision Castparts (PCP) and Wabco Holding (WBC). Combined, they account for less than 1% of the US long portfolio. Stake eliminations were CVS Caremark Corp. (CVS), Dollar General (DG), and Ingersoll-Rd (IR). This was a fairly active quarter with minor adjustments made to several positions along with a few big changes – only 16 of the 38 stocks in the portfolio remained steady this quarter. As with the last quarter, the largest five positions and their allocations remained steady. Combined, they account for around 75% of the overall portfolio value.

Berkshire Hathaway’s (NYSE:BRK-A) 13F filing, which reveals the firm’s stock positions as of September 30, shows new positions in Deere & Co. (NYSE:DE) and Precision Castparts (NYSE:PCP).  The filing was released after the market closed, and both companies saw their shares rise less than 1% immediately after the release. Berkshire bought about 4 million shares of Deere, which amounts to about 1% of the company’s shares.

Berkshire bought about 1.25 million shares of Precision Castparts, which makes metal parts for airplanes and other industrial uses.  The company also sold most of its stake in Johnson & Johnson (NYSE:JNJ) and now holds less than 500,000 shares. Berkshire owned more than 10 million shares as of the end of the second quarter.

Mirroring Warrens buys and sells is hard to do, what is important is the theme associated with why the portfolio is being adjusted.  Shares have performed fairly well in 2012 and much thought goes into this widely followed portfolio.


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