Monday, August 29, 2011

Berkshire Hathaway - A Diversified Portfolio

What does One Class A share of Berkshire Hathaway buy you?  (BRK.a = $109,340)

Shares              Company                         % of an ‘A’ Share

122                  Coca-Cola                              7.4 %
209                  Wells Fargo                            6.1 %
93                    American Express                  3.8 %
47                    Procter & Gamble                   2.6 %
64                    Kraft                                      1.8 %
26                    Johnson & Johnson                 1.4 %
18                    ConocoPhilips                        1.3 %
3                      Wesco Financial                    1.2 %
24                    Walmart                                 1.1 %
42                    US Bankcorp                          1.0 %
17                    Moody's                                 <1%
3                      M&T Bank
3                      Costco
10                    USG
2                      Torchmark
5                      General Electric
2                      Sanofi
1                      UPS

Total Market Value of $32,600 (as of June 30, 2011)


What does 100 shares of Class B shares in Berkshire Hathaway buy you?  (100 BRK.b = $7,260)

Shares              Company                         % of 100 ‘B’ Shares

8                      Coca-Cola                               7.4 %
14                    Wells Fargo                             6.1 %
6                      American Express                   3.8 %
3                      Procter & Gamble                    2.6 %
4                      Kraft                                       1.8 %
2                      Johnson & Johnson                 1.4 %
1                      ConocoPhilips                         1.3 %
0.2                   Wesco Financial                      1.2 %
2                      Walmart                                  1.1%
3                      US Bankcorp                           1.0%
1                      Moody's                                   <1% 
0.2                   M&T Bank
0.2                   Costco
1                      USG
& a fraction of a share of Torchmark, General Electric, Sanofi, & UPS.

Total Market Value = $2,174 (as of June 30, 2011)


Commentary

These top 19 positions in the Berkshire Portfolio account for about a 30% of the market value of the A or B shares. 

The top 4 positions account for just about 20% of the purchase price of the A or B shares.  These are Coca-Cola, Wells Fargo, American Express, & Procter & Gamble.

The top 2 positions account for 13.5% of the purchase price of the A or B shares.  These are Coca-Cola and Wells Fargo. 

Buying a share of Berkshire stock gives you access to a fantastic group of businesses. 

The remainder of the purchase price in the stock buys an interest in another group of wholly owned business, which as a whole have compounded earnings at over 20% for the past decade. 

Buffett's recent $5 billion investment in Bank of America now ranks 4th on the above list, just behind American Express ($6.9 billion) and ahead of Proctor & Gamble ($4.7 billion). 


Best Regards,
Kevin

Disclosure - Long BRK.B, WFC, BAC, GE, JNJ, & KFT.  

3 comments:

  1. Don't forget the foreign stocks like Munich Re, Tesco, BYD, Posco etc.

    ReplyDelete
  2. You are correct.

    Those foreign stocks are not listed on the 13-F and would account for approximately 4% of the purchase price of a berkshire share.

    Additionally, the company had $48 billion in cash as for 27% of a berkshire share.

    With the cash and investments totalling over 60% of the share price, the rest of the company is selling for cheap. Add in Burlington Northern Railway, it's worth $50 billion, and your talking another 28% of a share of berkshire. Your almost at 100% and haven't even begun adding up all the other companies that Berkshire owns.

    It's very easy to see that Berkshire is undervalued.

    Regards,
    Kevin

    ReplyDelete
  3. Hey Kevin, good post.

    Do these positions account for the insurance float that is used in the investment portfolio, since the money is not really ours then? Also, the stock portfolio and the businesses that you refer to are all on the asset side of the equation, but we still have to subtract the liabilities right?

    ReplyDelete