We ended our last blog with one of Buffett’s famous sayings:
“Be fearful when others are greedy, and greedy when others are fearful.”
And it’s only fitting that we now take a look at what he’s buying right now.
Coincidentally, Berkshire Hathaway recently released their numbers for Q1, and, surprise-surprise, this is the most money Buffett has ever spent on shares in any given quarter since all the way back in 2007.
Long story short, Warren Buffett sees an excellent opportunity in this market, and he’s going all-in on buying the dip. So, for Q1, Berkshire Hathaway added:
- Apple (AAPL): 3 787 856 shares (0.43% Increase)
- Restoration Hardware (RH): 353 453 (19.46% Increase)
- Chevron Corp (CVX): 120 933 081 shares (316.21% Increase)
- General Motors (GM): 2 045 847 shares (3.41% Increase)
- Activision Blizzard (ATVI): 49 657 101 shares (338.77% Increase)
- Liberty Media (FWONK): 5 603 705 (264.48% Increase)
- Floor & Decor Holdings (FND): 3 936 291 shares (466.55% Increase)
- Current Price: $141.14 ((today change: +0.62 (+0.44%))
- Market Cap: 2.286T
- PE Ratio: 23.01
- EPS: 6.14
Apple, ticker symbol APPL, makes up over 40% of Buffett’s entire portfolio (Berkshire Hathaway owns more than $145B worth of Apple shares). With its incredible track record, Apple is one of those “staple” tech companies that you can find on most portfolios. So it should come as no surprise that Buffett used the price drop to add even more Apple shares. And even though he increased his position by “just 0.43%”, you have to keep in mind that this is 0.43% out of over 145B, so essentially, he added almost 3.8mil shares here. He even stated that if the stock hadn’t started recovering around the end of March, he would’ve added even more. Now that the stock has dropped even further, it’s safe to assume that he’ll be looking to add more to his position.
Restoration Hardware (RH)
- Current Price: $271.65 ((today change: +15.48 (+6.04%))
- Market Cap: 6.699B
- PE Ratio: 12.27
- EPS: 22.13
Restoration Hardware, ticker symbol RH, is a big home decor & furnishings retailer with one hundred stores in the US. The remarkable thing about RH is that they’ve managed to keep up with the ever-expanding online shopping trends and actually increase their sales and profits year after year. And as soon as the final restrictions fell off, their revenue skyrocketed, scoring over 32% growth for 2021 alone.
Buffett added 19.46% to his position (over 353 000 shares), making his total stake in RH over $700 million.
Chevron Corp (CVX)
- Current Price: $176.67 ((today change: +1.26 (+0.72%))
- Market Cap: 347.044B
- PE Ratio: 16.60
- EPS: 10.64
Now, when it comes to energy stocks like Chevron (ticker symbol CVX), Buffett is very peculiar with his decisions. He keeps going in and out of the oil and gas sector, most likely in an attempt to “time” the market. Still, it’s worth noting that this is a very volatile field, especially now with the upcoming shortages and price increases. So adding to his positions in a company like CVX makes perfect sense considering the state of the economy right now. YTD, this CVX is up by almost 50% and is currently nearing its all-time-high trade price.
For Q1 of 2022, Berkshire Hathaway added over 120 million shares of CVX to their portfolio (an increase of over 316%) for a total stake of over $25 billion.
General Motors (GM)
- Current Price: $37.42 ((today change: +1.44 (+4.00%))
- Market Cap: 54.567B
- PE Ratio: 6.22
- EPS: 6.02
Next up, we have General Motors (ticker symbol GM). Here Buffett increased his position by 3.4%, or just a little of 2 million shares, for a total stake of over $2.7 billion. General Motors has several famous legacy brands like GMC, Chevrolet and Cadillac. And even though they’re not exactly “cutting edge future tech EV manufacturers”, there is absolutely a ton of value here and excellent prospects for the not-so-distant future. We’re really big on Tesla, and we love EVs and all that, but we’re still a ways away from the time when the new tech cars will be a commercially viable alternative for the everyday consumer. Besides, GM is also working on their own EV strategy, with as many as 30 separate EV models expected to debut by 2025. So, all in all, this purchase makes perfect sense, despite the gas prices and obvious downsides of conventional cars.
Activision Blizzard (ATVI)
- Current Price: $73.39 ((today change: +2.10 (+2.95%))
- Market Cap: 60.733B
- PE Ratio: 24.67
- EPS: 3.15
Activision Blizzard (ATVI) is a gaming company that owns a ton of very popular IPs like Call of Duty, World of Warcraft and candy crush. And, despite all the flak they’ve been getting from the fans over the past few years, Microsoft wants to acquire the company at $95 per share. In Q1 of 2022, Berkshire Hathaway purchased almost 50 million shares (an increase of over 338%) for a total stake of over $5 billion. This makes Berkshire Hathaway the biggest institutional shareholder of ATVI.
Liberty Media (FWONK)
- Current Price: $62.71 ((today change: +0.66 (+1.06%))
- Market Cap: 14.4B
- EPS: -0.77
Liberty Media (FWONK) is famous for the Formula One racing competition and related franchises. This stock has gone through some pretty volatile periods since Berkshire Hathaway’s purchase, but they managed to grab it at a really nice price. Here, Buffett added over 5.6 million shares for an increase of 264.48%, making his total stake close to $540 million.
Floor & Decor Holdings (FND)
- Current Price: $73.06 ((today change: +1.77 (+2.49%))
- Market Cap: 7.734B
- PE Ratio: 28.21
- EPS: 2.59
Floor & Decor Holdings (FND) specialises in retail sales of hardwood flooring and accessories. It’s another exciting bid where the numbers look good. Still, the logic behind the purchase is debatable, given the current housing economy and overall situation with the real estate market (especially in the US). Buffett purchased close to 4 million shares (an increase of over 466%) for a total stake of over $380 million. However, since the purchase, the stock has continued to drop, so …
And this concludes our review. Now, keep in mind that these weren’t all Berkshire purchases for Q1 but just the expanded positions. Like all successful long term investors, Buffett likes to explore new options and continually tries out new promising companies. We chose to focus on the “tried and tested” stocks he’s been holding on to for some time because they showcase his approach to the market much better. Besides, our last video was a bit on the longer side, so we figured we’d keep things short and sweet today. If you’d like us to go over the eight new positions he got into, let us know in the comments below, and we’ll see where we can fit it into the schedule.
And all of the stocks we covered today are excellent examples of Buffett’s long term vision. They might not look ideal in their current state or the current economy, but they’ve got massive potential moving forward, and he was ready to capitalise on that.
And if you want to learn how to capitalise on these situations yourself, our Private Investing Group is just the thing for you. It’s a place for like-minded investors interested in reliable long term strategies. We share exclusive content and detailed courses, host live discussions and answer questions for investors of all levels.
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Thank you all for watching, and until next time!
Recommended books for further reading:
- The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits
- How to Make Money in Stocks: A Winning System In Good Times And Bad
- The Barefoot Investor: The Only Money Guide You’ll Ever Need
- The Five Rules Successful Stock Investing: Morningstar’s Guide to Building Wealth and Winning in the Market
- A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today
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