Everything Warren Buffett: CNBC: Warren Buffett's Berkshire Hathaway Adds to J&J, Wells Fargo, USB Stakes

Saturday, May 16, 2009

Even though Warren Buffett always says he likes stocks more when they're cheaper, he didn't do a lot of buying as Wall Street's major indexes fell to their bear-market lows (so far) in early March.

Buffett's Berkshire Hathaway has just released its first quarter stock portfolio snapshot, and there are no blockbuster buys.

As he hinted during his live CNBC interview last week, Buffett may have "run out of gas" and decided to keep a substantial cash cushion rather than plunging into stocks.

While conceding that it is currently "among the more attractive" times to be an investor, he told Becky Quick that stocks were "far cheaper" in 1974 and 1975.

A few of Berkshire's stakes did, however, get larger.

Buffett added to Berkshire's positions in Johnson & Johnson, Wells Fargo, U.S. Bancorp, and Nalco Holding during the first three months of the year.

Berkshire's stake in J&J [JNJ 55.41 0.39 (+0.71%) ] rebounded by about four million shares to 32.5 million as of March 31, compared to 28.6 million at the end of December.

The increase is especially interesting because the big news out of the fourth quarter portfolio filing was that Berkshire had cut its J&J stake by almost 54 percent between September 30 and December 31. (61.8 million shares vs. 28.6 million shares.)

The money helped fund Berkshire's multi-billion dollar loans to Goldman Sachs [GS 134.40 0.80 (+0.6%) ] and General Electric [GE 12.86 -0.18 (-1.38%) ] last fall. They're generating a hefty 10 percent guaranteed annual return for Berkshire, unless the companies go completely out of business.

Buffett has been publicly praising Wells Fargo [WFC 24.87 -0.82 (-3.19%) ] and U.S. Bancorp [USB 17.67 -0.17 (-0.95%) ] in recent weeks, and Berkshire did increase its holdings in the two banks during the first quarter. The Wells Fargo stake increased by about 12 million shares during the period. U.S. Bancorp is up by 1.5 million shares.

Berkshire cut its Carmax [KMX 10.53 0.12 (+1.15%) ] stake by over five million shares to 12 million shares by the end of the first quarter. That stock was added to the portfolio in 2007's third quarter.

We also see a first quarter cut for UnitedHealth Group [UNH 27.51 -0.29 (-1.04%) ], to 4.5 million shares from 6.3 million shares.

An increased stake for Burlington Northern [BNI 67.14 1.63 (+2.49%) ], and decreases for Constellation Energy [CEG 24.80 -0.80 (-3.12%) ] and ConocoPhillips [COP 43.93 -0.81 (-1.81%) ]had been previously reported by Berkshire.

Buffett has called his decision to buy Conoco stock last year a "major mistake" and one of the "dumb things" he did in 2008. Berkshire's first quarter earnings report says it has been selling millions of shares at a loss for tax purposes.

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