Billionaire investor Warren Buffett is known for his value investing style. Many want to mirror the legend’s investing strategy and emerge a winner. Buffett’s company Berkshire Hathaway’s latest 13-F filing showed that Berkshire’s $299 billion portfolio was invested in 49 companies in the fourth quarter of 2022, unchanged from last quarter.
The top five holdings make up about 75% of the total portfolio, per an article published on Forbes. These five stocks are Apple AAPL, Bank of America BAC, Chevron CVX, Coca-Cola KO, and American Express AXP. Apart from these, Berkshire has significant weights in Occidental Petroleum OXY and Kraft Heinz KHC.
Let’s delve a little deeper.
Buffett is outright bullish on Apple AAPL. Berkshire Hathaway now owns a 5.8% stake in Apple, as of Dec 31, according to the company’s Schedule 13G filing with the Securities and Exchange Commission Tuesday, as quoted on investors.com.
Investors intending to follow Buffett and be part of Apple’s growth story, can play ETFs like iShares Dow Jones US Technology ETF IYW, Select Sector SPDR Technology ETF XLK and Vanguard Information Technology ETF VGT.
Buffett is now less confident about Taiwan Semiconductor Manufacturing Co. shares. Berkshire Hathaway said it had about 8.3 million American depository shares of TSMC worth $618 million, having sold 86% of its shares. Last month, the chipmaker offered a subdued forecast on prospects for 2023 given the global growth slowdown.
So, investors following Buffett may opt to stay away from the likes of VanEck Semiconductor ETF SMH as the fund has about 11.6% weight in TSMC. Invesco BLDRS Emerging Markets 50 ADR Index Fund ADRE also has about 22.2% weight on the stock.
Berkshire slashed its US Bancorp USB investment from 52.5 million shares to 6.7 million by the end of the year. Berkshire Hathaway also cut its investment in Bank of New York Mellon BK and sold off more than 37 million shares during the quarter and remained with 25 million shares of the bank.
U.S. Bancop has about 10% exposure to iShares U.S. Regional Banks ETF IAT while both bank stocks have decent weights in IAT and Davis Select Financial ETF DFNL. However, Berkshire is heavyweight on Bank of America, which is heavy on Invesco KBW Bank ETF KBWB.
Berkshire Hathaway has bet big on the energy companies over the last two years, scooping up loads of Chevron and Occidental Petroleum shares. But in the fourth quarter of 2022, the company sold 1%, or 2.4 million shares, of its Chevron position.
Chevron is heavy on energy ETFs like Energy Select Sector SPDR Fund XLE and iShares U.S. Energy ETF IYE. Meanwhile, Berkshire now controls more than 20% of the outstanding shares in Occidental. Occidental Petroleum Corporation has about 6.37% invested in First Trust Nasdaq Oil & Gas ETF FTXN. Whatever the case be, a small stake selling in Chevron and still a heavy weight in Occidental say that the energy ETFs are still in fine fettle.
Berkshire reduced its holdings of Activision Blizzard ATVI. The stock has 5% to 6% weights in Global X Video Games & Esports ETF HERO and VanEck Video Gaming and eSports ETF ESPO. Investors should not lose hopes on e-Sports ETFs on the ATVI news as Buffett discussed before that the Activision’s share purchase was a merger arbitrage opportunity, as ATVI was going to be merged with Microsoft.
Since the European Union has raised some objections to Microsoft’s acquisition of Activision, the likelihood of successful closure of the deal has weakened. Despite selling roughly another $600 million worth in the fourth quarter, Activision remains Berkshire’s ninth-largest holding, the Forbes article notified.