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What Buffett is investing in? November 19, 2008

Posted by shaferfinancial in Uncategorized.
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So many people watch closely what Warren Buffett invests in, that the SEC allows him to delay public notification of his trading, until he has finished his move.  We now have a good idea what Buffett was doing the first 3/4 of the year and it is interesting.

Buffett continues his hard move into energy with the acquisition of Conoco/Phillips shares (COP) .  At the end of March he owned 17.5M and by the end the third quarter he had a total of 84M shares.  This well managed energy company currently has a P/E ratio of less than 4!   

He bought a 2.9M share stake in Eaton Corporation (ETN).  This is a manufacturing concern that calls itself a diversified power management company.  Current P/E ratio of 5.6.

He also has bought a total of 5M shares in NRG energy, a power generating company currently being sought after by Exelon in a hostile takeover.  P/E ratio of 5.6.

He sold shares in Bank of America.  Guess he wasn’t impressed with their purchase of CountryWide!  But he increased his ownership in US Bancorp (USB) to around 73M shares.

Also sold significant shares in Home Depot, Lowes and CarMax.

So what does this tell us?  Buffett is thinking that energy production is going to be the place where we see the greatest returns going forward.  Anyone disagree with him?  He has made multiple purchases in the last two years both domestically and in foreign companies that deal with the energy issue.  Conoco/Phillips is strong in natural gas as well as oil.  Many think that natural gas will be the fuel of choice for long haul trucks instead of diesel, which is driving the foreign oil purchases.  Remember, he recently made a deal with General Electric, which has huge nuclear power plant exposure in Europe.

Buffett still worries about the sub-prime fallout, instead sticking to banks that have little exposure (Wells-Fargo and US Bancorp).  Wells is completing its buyout of Wachovia, minus its poorly performing loans.  His shedding of Bank of America which bought sub-prime bad boy CountryWide demonstrates this.  Wonder if he knows something about Goldman Sachs we don’t?  At least the top management at GS decided to forego their bonuses this year! 

Buffett into energy, huh…….

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Comments»

1. Joshua - November 19, 2008

Great observations and summary! I really like how you go “into depth” with facts and figures that show WHY you like his securities and invest in BH.

2. Joshua - November 19, 2008

BTW, You still need to add an email capability so I can see all the comments when they are updated like Jeff has at BawldGuy.

3. Joyce Jacobsen - November 24, 2008

Wow this was some really interesting information and also very mind boggling. Looks like “energy” is the place to be. Thanks for sharing.
Blessings. Joyce


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