{"id":33555,"date":"2012-11-16T11:14:21","date_gmt":"2012-11-16T16:14:21","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/11\/what-is-warren-buffett-buying\/"},"modified":"2012-11-16T11:14:21","modified_gmt":"2012-11-16T16:14:21","slug":"what-is-warren-buffett-buying","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/11\/16\/what-is-warren-buffett-buying\/","title":{"rendered":"What is Warren Buffett Buying?"},"content":{"rendered":"

By The Sizemore Letter<\/a><\/p>\n

It\u2019s filing season again, that time of year when we get to peek at what big, high-profile investors are buying.\u00a0 And perhaps no portfolio is waited for in more anticipation that Warren Buffett\u2019s Berkshire Hathaway (NYSE:$<\/span>BRK-A<\/a>).<\/strong><\/p>\n

Buffett is still bullish these days, even with all the talk of the fiscal cliff.\u00a0 If we fell over the cliff and the economy got whacked with higher taxes and massive spending cuts, Congress and the White House would hash out a deal before the economy slipped into recession.\u00a0 \u201cWe\u2019re not going to permanently cripple ourselves,\u201d he said recently in a CNN interview<\/a>.<\/p>\n<\/p>\n

That may be true, but I\u2019m a little more worried than Mr. Buffett.\u00a0 I agree that a deal will get made eventually, but the psychological damage can still be huge.\u00a0 And we could easily get a deep stock correction or a recession in the meantime.\u00a0 Policy paralysis has consequences.<\/p>\n

With that said, what is Buffett and his team buying and selling these days?<\/p>\n

To start, he\u2019s buying broadcast TV.\u00a0 Berkshire Hathaway bought nearly 20% of Media General\u00a0 (NYSE: $<\/span>MEG<\/a>).<\/strong>\u00a0 This is a small holding for a portfolio of Berkshire\u2019s size, but it does show bullishness on the part of Buffett for traditional media.<\/p>\n

I like to think I am a contrarian investor.\u00a0 But then I look at Warren Buffett and I realize that I\u2019m not nearly as big of a contrarian as I thought.\u00a0 I wouldn\u2019t touch traditional media right now because I can\u2019t see where the profits will come from.\u00a0 Advertising is an industry in flux, and TV competes with the internet for eyeballs.<\/p>\n

But then, there is a proper price for everything, and Buffett seems to believe that, at .16 times sales, Media general is simply too cheap to ignore.<\/p>\n

Buffett additionally made three additions in the gritty industrial sphere, buying nearly 4 million shares of Deere & Co (NYSE:$<\/span>DE<\/a>),<\/strong> the producer of tractors and others heavy-duty equipment, \u00a01.2 million shares of Precision Castparts Corp (NYSE:$<\/span>PCP<\/a><\/strong>), which is essentially a metal shop with a worldwide presence,\u00a0 and 1.5 million shares of Wabco Holdings Inc (NYSE: $<\/span>WBC<\/a>),<\/strong> a world leader brake and control systems for large commercial vehicles.<\/p>\n

Truck parts and tractors.\u00a0 Buffett clearly believes that industrial activity will be picking up in the years ahead, both in the United States and overseas.<\/p>\n

Now, what\u2019s Buffett and his team selling?<\/p>\n

He sold out of Dollar General (NYSE:$<\/span>DG<\/a>), Moldelez International (Nasdaq:$<\/span>MDLZ<\/a>), Ingersoll-Rand PLC (NYSE:$<\/span>IR<\/a>)<\/strong> and CVS Corp (NYSE: $<\/span>CVS<\/a>)<\/strong>.<\/p>\n

The sales have little obvious in common, other than all but Ingersoll-Rand have a strong consumer focus.\u00a0 Dollar General is a discount retailer of assorted sundries, CVS Corp is national chain of pharmacies, and Mondelez is a producer of packaged foods.\u00a0\u00a0 Yet Berkshire still maintains enormous positions in Coca-Cola (NYSE:$<\/span>KO<\/a>), Procter & Gamble (NYSE:$<\/span>PG<\/a>) <\/strong>and Wal-Mart (NYSE:$<\/span>WMT<\/a>),<\/strong> so\u00a0 you can\u2019t reach the conclusion that Buffett is bearish on the consumer.<\/p>\n

Still, Berkshire\u2019s portfolio has been consistently drifting away from consumer-oriented stocks for months and towards grittier industrial stocks and business services stocks such as IBM (NYSE:$<\/span>IBM<\/a>).<\/strong><\/p>\n

Disclosures: Sizemore Capital is long PG and WMT. \u00a0SUBSCRIBE <\/a><\/strong>to Sizemore Insights<\/em>\u00a0via e-mail today.<\/em><\/p>\n

The post What is Warren Buffett Buying?<\/a> appeared first on Sizemore Insights<\/a>.<\/p>\n

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