Is Warren Buffett the Greatest Factor Investor?

An article in CFA Institute offers an overview of how Buffett’s Berkshire Hathaway has avoided many of the major pitfalls suffered by other “star” investors and how, from a factor-investing perspective, the conglomerate has managed to outperform for decades. The article reports that Buffett’s “outperformance relative to the S&P 500 has been especially significant since 1991 and created immense value” for Berkshire shareholders. It adds that while there were some periods of underperformance, “these often… Read More

Buffett’s Berkshire Bets Over $860 Million on Amazon

Berkshire Hathaway revealed that its new wager on Amazon totaled $860.6 million at the end of March, according to an article in Bloomberg that outlines key takeaways from the conglomerate’s recent 13F filing. The size of the investment, the article says, “gives more clarity to the wager that Buffett disclosed days before his annual shareholder meeting earlier in May” and “underscores the growing influence of Buffett’s investing deputies, Todd Combs and Ted Weschler,” who were… Read More

Perspective: Berkshire’s Amazon Stake and Value Investing

According to an article in Yahoo Finance, Berkshire’s recent investment in Amazon “flies in the face of his long-held investing views” and signals “it’s okay to buy high price-to-earnings multiple companies provided they will change the game at some point in the future.” The article notes that Amazon’s stock, which is trading at a “lofty” price-earnings multiple of 51 (data from Yahoo Finance), is “known for not having steady profits as it invests aggressively to… Read More

A Dozen Targets for a Buffett-esque Elephant Hunt

An article in Barron’s lists twelve potential “elephant sized” acquisitions for Berkshire Hathaway to consider based on analysis by a Credit Suisse team of analysts. The team, called HOLT, created a framework intended to find what the article describes as “Buffet-compatible stocks” using a financial metric referred to as “cash flow return on investment” (CFROI)-which they believe offers a clearer picture of a firm’s underlying strength than earnings metrics and is similar to the framework… Read More

Buffett: Delta Purchases Broke 10% Threshold by Mistake

Warren Buffett said that Berkshire’s increased stake in Delta Airlines mistakenly breached his comfort threshold of 10% due to buybacks by Delta. This according to an article in Bloomberg. The article reports that in an interview with CNBC, Buffett said, “What I didn’t realize was that that purchase had taken us over 10 percent. I was already in territory I didn’t plan to get, so I just decided to buy a whole lot more stock.”… Read More

Buffett’s Course Correction on Airlines

After decades of swearing off the sector, Berkshire Hathaway’s airline holdings make it among the biggest shareholders in the four largest U.S. carriers, and CEO Warren Buffett said he wouldn’t rule out owning one. This according to an article in Bloomberg. The comment is triggering chatter about which airline Buffett might acquire, especially since the legendary CEO is looking for a place to park some of Berkshire’s $112 billion (as of year-end 2018) in cash.… Read More

Buffett Bullish on Bank Stocks

In a recent interview with Yahoo Finance, Berkshire Hathaway CEO Warren Buffett explained why he is bullish on bank stocks: “They’re businesses I understand, and I like the price at which they’re selling relative to their future prospects;” “I think ten years from now they’ll be worth more money and I feel there’s a very high probability that I’m right;” “I don’t think that it will turn out to be the best investment at all, of the… Read More

Warren Buffett’s Next Deal Looms Large

In this year’s letter to Berkshire Hathaway shareholders, billionaire CEO Warren Buffett wrote that the mere thought of completing another big acquisition “is what causes my heart and Charlie’s to beat faster.”  This according to a recent Bloomberg article. Since its last big deal—the 2016 purchase of Precision Castparts for $37 billion– the company has not been able to find another “elephant-sized” channel for its over $100 billion in cash. “Lately,” the article says, “investor… Read More

Buffett Annual Letter Offers Advice to Pensions and Endowments

In his annual letter to Berkshire Hathaway shareholders, CEO Warren Buffett tells pension funds and endowments to eliminate high-cost “helpers” that eat into returns, according to an article in Chief Investment Officer. Buffett illustrates his point with the example of his first stock purchase 77 years ago– three shares of Cities Service which he bought for $114.75: “If my $114.75 had been invested in a no-fee S&P 500 index fund, and all dividends had been… Read More

Replicating Buffett’s Wide Moat Investing Method

By Justin J. Carbonneau (@jjcarbonneau) —  Warren Buffett and others have long advocated buying companies with moats around their businesses. Strong brand loyalty (Disney), economies of scale (Walmart), innovation (Google), location (Starbucks) and other sources of competitive advantage play an important role in in the success of companies over time. The reason companies with moats appeal as attractive investments is that a moat, which is a function of a firm’s competitive advantage, protects the business… Read More