Wednesday, October 13, 2010

Lots of Ways to Invest Like Warren Buffett

Billionaire Warren Buffett is the second richest American. As most investors know, he is the head of Berkshire Hathaway (BRK-A), the highest priced stock and one of the most successful companies during the last half-century. The company also has Class B shares (BRK-B), currently trading around 83.75, is another way to invest with Buffett. The Class B common share is equal to one-fifteen-hundredth (1/1,500) of the Class A shares. However, there are other ways to invest in Berkshire Hathaway.

The Boulder Total Return Fund (BTF) has over 27% of its portfolio in Berkshire A shares plus another 12% in Berkshire B shares, so in excess of 39% of the investment assets in Buffett's company. Other stocks the closed end fund owns includes:
Yum (YUM)
Wal-Mart (WMT)
Johnson & Johnson (JNJ)

Another alternative is by owning shares in the Sequoia Fund (SEQUX), a mutual fund with a large position in Berkshire Hathaway. Over 15% of their portfolio is invested in the stock. Some of the other stocks in their portfolio include:
Martin Marietta (MLM)
Fastenal (FAST)
Mohawk Industries (MHK)
The minimum investment in Sequoia is $5,000.

A third way to invest is by investing in the Fairholme Fund (FAIRX) which has a little over 6% of their portfolio invested in Berkshire. Although the concentration is not as significant as Sequoia, it is the number three holding in the portfolio, as measured by percentage of assets. Fairholme's other major holdings include:
Sears (SHLD)
Goldman Sachs (GS)
Citigroup (C)
WellPoint (WLP)
Minimum investment is $10,000.

Markel Corp. (MKL) is an insurance company that many consider to be a mini-Berkshire, especially since it has a substantial amount of Berkshire Hathaway stock.

There are other funds that have around two percent of their portfolio in Berkshire, such as Legg Mason ClearBridge Appreciation A (SHAPX) but the percentage isn't enough to be a close play on Berkshire.

One other option is to create a portfolio that emulates Berkshire's holdings of publicly traded stocks, however, this wouldn't cover Berkshire's holdings of non-public stocks. In addition, it would involve purchasing many different stocks, so you would be better off just buying the Class B shares. But if you think that you can out-perform Buffett using his ideas, then here is a list of a few of their Berkshire's major stockholdings:

American Express Co. (AXP)
The Coca-Cola Company (KO)
ConocoPhillips (COP)
Johnson & Johnson (JNJ)
Procter & Gamble Co. (PG)

For a free downloadable list of all of Warren Buffett's Berkshire Hathaway stockholdings, which can be changed, added to, and sorted by yield and forward PE, go to

Disclosure: Author does not own any of the above.


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