BEIJING, May 17 -- Billionaire Warren Buffett's Berkshire
Hathaway Inc took advantage of falling share prices in the first quarter to
boost stakes in Kraft Foods Inc and Wells Fargo & Co.
Buffett also increased holdings in Ingersoll-Rand Co, the refrigeration-equipment maker, and health insurers United Health Group Inc and WellPoint Inc, according to a regulatory filing yesterday by Nebraska-based Berkshire. The Standard & Poor's 500 Index declined 9.9 percent in the first three months of the year.
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Billionaire financier and Berkshire Hathaway CEO Warren Buffett plays bridge with shareholders during their annual meeting in Omaha, Nebraska, May 4, 2008. Buffett's Berkshire Hathaway Inc took advantage of falling share prices in the first quarter to boost stakes in Kraft Foods Inc and Wells Fargo & Co. (Xinhua/Reuters Photo)
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"If a stock goes down 50 percent it doesn't bother me
in the least," Buffett said after Berkshire's annual shareholder meeting in
Omaha. "If we're going to be buying things, we want to buy them on sale."
Buffett, 77, built Berkshire from a textile
manufacturer into a 200-billion U.S. dollars holding company with a 72.6-billion
dollars stock portfolio by investing premiums from insurance units such as Geico
Corp and National Indemnity Co. Berkshire is the largest shareholder of
Coca-Cola Co, Wells Fargo, Kraft and American Express Co as of March 31,
according to Bloomberg data.
Berkshire's holdings of Kraft, the world's
second-biggest food maker, rose 4.4 percent since December 31 to 138.3 million
shares, according to the filing, which discloses United States equity
investments as of March 31. Kraft shares fell 5 percent in the first quarter.
Wells Fargo
Berkshire's stake in San Francisco-based Wells Fargo,
the second-biggest US home lender, increased by 1.4 million shares to about
290.7 million. The bank averaged 29.74 dollars on the New York Stock Exchange
during the first quarter, about 9 percent lower than in the last three months of
2007, when Buffett increased Berkshire's ownership by 3.4 percent.
"He's putting more in the things he's invested in all
along," said Frank Betz, a partner at Carret Zane Capital Management. "We'll see
more of that. Why reinvent the wheel?"
The filing reported no new companies in the
portfolio. "His energies are totally focused on acquisitions and the debt
markets right now," said Mohnish Pabrai, founder of California-based Pabrai
Investment Funds. "There's a lot of opportunity on the debt side because of
liquidity drying up."
Extreme Dislocations
Berkshire has spent 4 billion dollars in the
municipal auction-rate bond market, taking advantage of payouts that topped 10
percent after regular bidders fled, Buffett said at the annual meeting. Markets
were so disrupted, he said, that bonds from the same issue were selling
simultaneously from the same broker with yields of 6 percent and 11 percent.
"Those are extreme dislocations," Buffett said.
"Those are great times to make unusual amounts of money."
Buffett will be in Europe next week meeting with
owners of large family-run businesses as he looks to put 35 billion dollars of
cash to work.
Berkshire added to its stakes in the two largest US
health insurers in the first quarter as the shares fell. Holdings in Minnetonka,
Minnesota-based United Health and in Indianapolis-based WellPoint increased by
6.7 percent each.
Buffett, the world's richest man according to Forbes
magazine, is often mimicked by investors who follow his stock picks. Using that
strategy for 31 years would have delivered annual returns of about 25 percent,
double the return of the S&P 500, according to 2007 study. Berkshire earned
13.2 billion dollars in 2007.
(Source: Shanghai Daily)
