When Warren Buffett – one of the most successful market investors of all time and CEO and Chairman of Berkshire Hathaway – buys or sells stock, the investment community pays attention. Another way that investors gain insight into Buffet's views on specific industries and the global economy is through annual shareholder letters that address both strategy and interests.
Here we'll break down how investors can add some of Buffett & # 39; s current holdings to their portfolios:
Value Stocks And The Gold Surprise
Buffett worked for Benjamin Graham in his twenties, widely regarded as the father of value investing. In 1963 Buffett became the largest shareholder of Berkshire Hathaway (NYSE :), (NYSE :), a struggling textile manufacturer at the time. Over the decades, his team has turned it into a holding company with a market capitalization of $ 510 billion.
Berkshire Hathaway B Weekly
Berkshire Hathaway & # 39; s regular 13F filings with the Securities and Exchange Commission (SEC) detail his holdings. The most recent filing on August 14 showed that Berkshire Hathaway has bought a 20.9 million share in Toronto, Canada-based mining group Barrick Gold (NYSE :), one of the largest gold miners in the world.
Buffett shocked Wall Street. The "Oracle of Omaha," as he is often called, has never been a gold lover before. In his 2011 shareholder letter, Buffett outlined his negative view of investing in gold, citing its lack of utility and failure to provide income through interest or dividends.
It is unclear whether Buffet & # 39; s views on gold have fundamentally changed or whether the new generation of investment managers at Berkshire Hathaway are simply taking a different view of the precious metal. Regardless, Buffet generally prefers:
“Investments in productive assets, be they businesses, farms or real estate. Ideally, in times of inflation, these assets should have the ability to provide output that maintains its purchasing power value while requiring a minimum of new capital investment. "
For example, Berkshire Hathaway has long held Coca-Cola (NYSE 🙂 in consumer goods and currently owns more than 5% of technology giant Apple (NASDAQ :).
ETFs That Offer Access
In addition to buying company shares directly for a long-term portfolio, exchange-traded funds can also provide a more diverse exposure .
Buying Berkshire Hathaway stock would be an option. However, there are also three ETFs that hold BRK.B shares, including SPDR® Portfolio S&P 500 Value ETF (NYSE 🙂 – backed, the Financial Select Sector SPDR® Fund (NYSE 🙂 – backed and Davis Select US Equity (NASDAQ :).
Looking for ETFs for exposure to Apple stocks in the new decade? iShares Core S&P Total US Stock Market ETF (NYSE 🙂 – backed, the Technology Select Sector SPDR® Fund (NYSE :), Invesco S&P 500® Top 50 ETF (NYSE 🙂 and the iShares Global 100 ETF (NYSE :).
Finally, investors who also want to buy gold or prospectors can choose the SPDR® Gold Shares Fund (NYSE 🙂 or SPDR Gold MiniShares (NYSE :), the VanEck Vectors Gold Miners ETF (NYSE 🙂 or the VanEck Vectors Junior Gold Miners ETF (NYSE 🙂 – all covered.
However, traders who intend to participate in the recent gold rush by investing in leveraged ETFs such as the Direxion Daily Junior Gold Miners Index Bull 2X Shares (NYSE 🙂 – covered – will face the risk & # 39; 39; s of directional bets must weigh. via gearing.
Bottom Line
Analyzing transactions by companies like Berkshire Hathaway can get a glimpse of how smart money allocates capital in stock markets. Retail investors should do their research on individual stocks and ETFs before buying. In the coming quarters, as Berkshire Hathaway updates its holdings, we can revisit this topic to discuss which other ETFs are suitable.
