Warren Buffett's portfolio after the sharp decline in A-stock stocks represented by Apple in the fourth quarter of last yearPerformanceThis year, it has recovered sharply.
Not all of its stocks have rebounded from the lows of the end of last year, but most of them have begun to enjoy the "spring" brought by the market recovery in 2019. The constituents of the Standard & Poor's 500 Index rose 15.98% so far this year, almost offsetting the decline in the fourth quarter of last year. At the same time, of Buffett’s portfolio of up to $700 billion (4.7 trillion yuan), 45 of the 48 stocks rose.
Since last year, due to changes in accounting rules, BerkshireNet profitIt is greatly affected by the performance of its portfolio. Berkshire had a net loss of $25.39 billion in the fourth quarter of last year, as it required the company to include changes in the market value of equity investments in calculating net income. In comparison, in the fourth quarter of 2017, Berkshire’s net income was $32.55 billion without calculating unrealized gains and losses. As investment performance picks up, Berkshire's net profit for the first quarter of this year will be greatly improved.
Among the stocks invested by Berkshire, food company Kraft Heinz fell the most, down 21.98% this year. The stock has a weight of 7.66% in its portfolio and a sixth in net worth.
Less than two years ago, the food giant was Berkshire's largest awkward stock, worth $28.3 billion, but has now fallen to sixth place, a decline of more than 60%. Kraft Heinz is a failure of Buffett’s investment in recent years, and the company is also under investigation by the US Securities and Exchange Commission for internal problems.
Teva Pharmaceuticals fell 6.74% this year, the world's largest generic drug company only accounts for BerkshireCompany investmentThe combined 0.36% is one of its smaller positions. The Coca-Cola Company fell 0.43% for the year. The beverage giant was once the top awkward stock for Buffett and has fallen from the first to the fourth since 2017.
Wells Fargo has been plagued by scandals in the past few years, one of the earliest bank stocks he invested in. The bank was once the worst performing stock in the industry, but Buffett is a staunch supporter of Wells Fargo. After its fraudulent scandal, Buffett not only publicly supported the bank's executives, but Berkshire also sold only a small number of shares and still held up to 10% of the company's shares. The departure of the bank’s chief executive indicates that the bank will eventually start to turn around. The stock has risen 1.8% this year after a sharp fall from last year.
Many of the above companies have the "moat" that Buffett loves, but unfortunately all kinds of "black swan" incidents have made Buffett unexpected.
Apple accounts for 21.51% of its portfolio, so its share price volatility has the greatest impact on Buffett's investment. Apple's share price has started to rebound this year. From its low of more than a year in early January, the tech giant has soared 26.47% so far, but its share price has not recovered to the highest historical price set in October last year.
Buffett first paid attention to Apple in 2016, when an investment manager of Buffett decided to invest about $1 billion in the technology giant, and the company quickly became an important position for Berkshire. Buffett likes the "sticky apple ecosystem" and says the company's products provide great value to customers.
However, last year's Apple also brought a lot of pressure for Buffett. Due to weak product innovation and over-priced, product sales fell significantly, and Apple's share price fell 35% after hitting a record high. However, after Apple lowered the price of its products in various ways and turned its power point to service, the stock price rebounded rapidly this year. Based on Berkshire's quarterly average buying price, Apple may have brought about a return of about 37.44%.
Looking at the gains alone, the best performer among Berkshire's investment companies is StoneCo. This Brazilian electronic payment company is owned by Buffett.fundManager Comms has invested and the stock has soared 91.16% so far this year. Berkshire bought the company's stock three days after its IPO, which accounted for 0.14% of the portfolio's weight. It is worth noting that as a very large portfolio of positions, a large number of shares must be bought to have an impact on the portfolio. The good performance of the stock has little impact on Berkshire's overall performance.
The preference for financial stocks can be seen before its top ten positions. In addition to Wells Fargo, Berkshire also holds Bank of America, United Bank of America, and Bank of New York Mellon. In addition to the Bank of America in the 2008 financial crisis, many Buffett have only increased their positions in recent years. Like New York Mellon Bank, which is one of the banks with the largest increase in positions last year, Hezhong Bank is also the main addition to Buffett in recent years. . These varieties are relatively more stable, such as the New York Mellon Bank rose 12.78% this year.
(Article source: China Fund News)