Greatest of all time Warren Buffett buys the dip

Berkshire Hathaway held its Annual Shareholders Meeting over the weekend — giving investors a glimpse into the minds of two of the all-time investing greats.

The ultimate long-term value investor

Berkshire Hathaway (NYSE:BRK.A/B) is a well-known holding company run by famous investors, Warren Buffett and Charlie Munger. The conglomerate is a web of subsidiaries and investments that it outright owns, has a major share or holds a passive stake in.

At the end of 2021, Berkshire held common stock in 42 companies, including Coca-Cola, Kraft Heinz and U.S Bancorp — with 60+ subsidiaries today in industries like insurance, railroads and utilities.

• Buffett style: Berkshire closely follows Warren Buffett’s value investing style: Staying patient, finding quality companies and keeping cash to take advantage of opportunities.
• Performance: In the 20 years to April 22, $BRK.B is up 611% vs. 477% from the S&P 500. The stock is up 6.4% in 2022 — beating the S&P 500.

Berkshire in buying mode

For the past two years, Berkshire Hathaway has been on a selling streak — when deals were highly competitive and bargains were challenging to find.

The trend reversed in 2022 — with Berkshire buying $51.1B of shares. At its 2021 peak, Berkshire had $149.2B in cash — falling to $106.3B in the recent quarter.

As of the first quarter, 66% of Berkshire’s portfolio is concentrated in four companies:

• Apple (NASDAQ:AAPL) — $159.1B
• Bank of America (NYSE:BAC) — $42.6B
• American Express (NYSE:AXP) — $28.4B
• Chevron (NYSE:CVX) — $25.9B

Deep in oil: In the first quarter, Berkshire grew its Chevron position from $4.5B at the end of 2021 to $25.9B and added $7B in Occidental Petroleum (NYSE:OXY) — now holding $40B+ in oil companies.

Finding discounts: Buffett said he would buy more Activision (NASDAQ:ATVI) to take advantage of its discounted price. Microsoft agreed to acquire $ATVI for $95/share, but $ATVI trades at $78 — implying that some think the deal won’t go through.

Investors: Still not a Bitcoin believer

Buffett was a long holdout of tech investments before making his first into IBM in 2011. But IBM performed poorly, leading to Berkshire selling its entire position by 2018.

Its next tech investment in Apple turned into a home run — with Berkshire adding $600M to its $AAPL position in the first quarter. Despite opening up to tech, both Buffett and Munger are still large critics of Bitcoin:

• Buffett prefers buying “productive assets” that generate rent or produce a product (CNBC).
• Buffett said he wouldn’t buy Bitcoin even if he could buy it all for $25 because he wouldn’t know what to do with it.