As the deadline for institutional investors with at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission (SEC) rolled around last week, Feb. 14 marked a significant day for the investing community. This filing provides investors with a behind-the-scenes peek at the latest quarter’s stock trades by Wall Street’s most influential and successful money managers. This quarter ended on Dec. 31, 2023.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
The most anticipated 13F filing is Warren Buffett’s with Berkshire Hathaway. As the “Oracle of Omaha,” Buffett has generated over a 4,800,000% aggregate return in his company’s Class A shares since the mid-1960s. With a portfolio worth approximately $371 billion, Warren Buffett’s investment activities continue to catch the attention of the investing world.
Warren Buffett’s Core Investments
Berkshire Hathaway’s investment portfolio is characterized by a heavy concentration in a few key investment ideas. The majority of Berkshire’s invested assets are allocated to the following eight core investments, together accounting for more than 84% of the portfolio:
The Financial Strategy of Warren Buffett: A Market Perspective
When a company boasts robust competitive advantages, trades at a single-digit earnings multiple, and offers a market-topping dividend yield, there’s a good chance it’s going to intrigue Warren Buffett.
Buffett is known for his affinity towards financial stocks. His portfolio boasts substantial investments in industry giants such as Visa, Mastercard, and Citigroup. The reason financial stocks appeal to Buffett is their cyclical nature, inextricably linked to the health of the U.S. economy.
For instance, Visa and Mastercard lead the credit card network purchase volume in the United States, while Citigroup ranks among the largest banks by total assets. Should the U.S. economy continue to expand, Visa and Mastercard are primed to benefit from increased fee collections, whereas Citigroup’s interest income is set to surge. This symbiotic relationship with the U.S. economy forms a crucial element of Buffett’s investment philosophy.
Image source: Getty Images.
Exploring Warren Buffett’s Smaller Holdings
Amid Berkshire’s vast portfolio, there are 17 holdings ranging in market value from $8.6 million to $840.9 million. These are typically smaller investments made by Buffett’s “lieutenants”, Todd Combs and Ted Weschler, or companies facing a downturn.
Examples include HP and Paramount Global, from which Buffett and his team divested a significant percentage of their stakes in the fourth quarter. HP’s recovery in personal-computing sales is slower than expected, and Paramount Global contends with mounting debt and intensified streaming competition. Accordingly, these holdings may not be part of Berkshire’s portfolio for much longer.
Despite this, these smaller holdings can still be gems. Sirius XM Holdings, for instance, is a legal monopoly with robust pricing power and a significant revenue base from subscriptions, making it resilient to economic downturns.
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Citigroup, Ally, American Express, and Bank of America are advertising partners of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sean Williams has positions in Amazon, Bank of America, Mastercard, Sirius XM, and Visa. The Motley Fool has positions in and recommends Amazon, Apple, BYD, Bank of America, Berkshire Hathaway, Chevron, HP, Jefferies Financial Group, Lennar, Mastercard, Moody’s, NVR, Snowflake, Vanguard S&P 500 ETF, VeriSign, and Visa. The Motley Fool recommends Diageo Plc, Kraft Heinz, Kroger, Nu, Occidental Petroleum, T-Mobile US and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
