The Warren Buffet Way

Wanted to pry into the stock holdings of the second richest man, and what made this guy, what he is now. The stocks Berkshire Hathaway holds seem to be well grounded ones mostly, with a Wide Moat Rating from MorningStar. Despite having 39 names in his portfolio, the top 10 stocks account for more than 80% of the portfolio: American Express (AXP), Anheuser-Busch(BUD) , Coca-Cola (KO), Conoco Phillips (COP) Johnson & Johnson (JNJ), Moody's (MCO), Procter & Gamble (PG), Washington Post (WPO), Wells Fargo (WFC), Wesco (WSC). Reminds me of his quote that Wide diversification is only required when investors do not understand what they are doing.

At Berkshire Hathaway's last annual meeting in May 2006, Buffett said that if he were starting his investment partnership over again, he would invest in securities around the world and focus on smaller companies. To illustrate this, he used the experience of his relatively recent investments in Korea, Israel, stating that since companies with strong balance sheets were trading at a meager 3 times earnings, he would have been almost 100% invested in Korea.

I was surprised not to see any dot com stocks in his portfolio, and i believe he was heavily critiqued for not getting the piece of the action during the dot com boom, but then we all know who had the last laugh during the dot com crash. Like his concept of investing in a business that one really knows and understands.