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Berkshire Hathaway Q3- 2014 November 18, 2014

Posted by shaferfinancial in Finance.

As regular reader know, BRKb has been a large mainstay holding of mine since the mid 1990s. Of recent changes, I have sold BRKbs in order to move into some high yield dividend stocks. But, it still remains over 40% of my portfolio.

The last quarter went well for Berkshire. It now holds over $62B in cash. Operating profits rose substantially to $4.72B a rise of 29%. It lost a little over $100M on derivatives and investments that included writing off almost $700M on an investment in Tesco Plc, a British grocer. I guess everything Buffett touches doesn’t turn to GOLD!

While total earnings for the quarter ran 9% lower than the 3rd quarter of 2013, overall for the first 3 quarters of the year earnings are up 8%. Cash flow from operating activities was up 16% from last year for the 3 quarter. A stunning success.

By any accounts a good quarter and a good first 9 months of the year.

After the quarter was announced BRK bought Duracell from Proctor and Gamble. The net price was $2.9B with the deal giving back $4.7B in P&G stock and P&G recapitalizing Duracell with $1.8B in cash.

By using all its P&G stock in the deal it avoided over $1B in a tax liability. The original stock was part of the Gillette deal years ago and had appreciated tremendously.

However, Buffett still sits on a ton of cash. What to do with it?

In its equity positions in addition to the aforementioned P&G disbursement it upped its GM ownership by 21% to 40M shares. It got rid of its Deere position. Slightly upped its positions in IBM, Wal Mart, Visa and Master Card. Also took a stake in Express Scripts with 449K shares.

Still making me lots of money. Thanks Warren!



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