In 2010, a Warren Buffett holding to follow will be General Electric (GE). For the Oracle, 2009 was marked by the stellar performance from a number of his riskier plays, including Goldman Sachs (GS) and BYD.
Additionally, Professor Buffett made some uncharacteristically conservative plays, including his all-in purchase of Burlington Northern Santa Fe (BNI), as well as his increased stake in Wal-Mart (WMT).
While a number of his investments in 2009 have earned the financier a comfortable profit, one that continues to lag is GE.In October, Buffett invested $3 billion into the global conglomerate in hopes of banking on the U.S.' expected economic recovery. The deal provided Berkshire Hathaway (BRK.A) with perpetual preferred stock with a 10% dividend that is callable after three years at a 10% premium. Additionally, Buffett's firm received warrants allowing him to sell his $3 billion in common stock at $22.25. Today, the shares remain below the crucial benchmark needed to turn a profit. In fact, thanks to missed revenue, a credit downgrade and challenges facing a number of its branches, GE's share price as of Dec. 22 is actually at a lower level than the day Buffett made his investment. As the year comes to a close, Buffett appears to be breaking his No. 1 rule: "Don't lose money." However, it is important to remember that Buffett does not make short-term investments. Rather, one of the financier's most enduring qualities is his patience. He has famously gone on record saying, "Our favorite holding period is forever." This patience may pay off in 2010 as GE looks to reverse a year of struggles.
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