This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

ETF Mimics Buffett's Mega-Cap Picks

NEW YORK ( TheStreet) - It has been a busy week for Warren Buffett fans.

On top of Buffett's visit to the White House where he, along with George H.W. Bush, Maya Angelou and others were honored by President Obama and presented with the Presidential Medal of Freedom, the Berkshire Hathaway (BRK.A - Get Report) 13f filing was released to the public.

Commentators, analysts and others have spent the week fiercely digging through the document in hopes of uncovering clues regarding Buffett's view of the global marketplace.

In the final months of 2010, Buffett made a number of tweaks to his legendary portfolio. Overall, the famously bullish investor ended the quarter as a net seller, unloading shares of a number of his holdings and further increasing the size of his already substantial pile of cash.

Bank of America (BAC - Get Report), Nike (NKE), Comcast (CMSCA), Lowes (LOW), Finserv (FISV) and Nalco (NLC) were among the biggest victims of Buffett's trimming. Over the course of this quarter these positions were closed out completely.

Buffett's portfolio cuts have received the lion's share of the attention from investors and market commentators throughout this past week. However, the famous investors made some purchases as well.

The investor's second largest holding, Wells Fargo (WFC - Get Report), received a vote of confidence when Buffett added 6.2 million shares to his already sizeable stake. Wells now accounts for 20% Berkshire Hathaway's investment portfolio.

This past quarter's action highlights the conservative shift and streamlining taking place within Buffett's investment portfolio. As I've explained in the past, due to the size of Berkshire Hathaway, Buffett can no longer expect to score big profits by investing in small, fast moving companies. Instead, he must rely on the long-term stable returns that result from owning large and mega-cap companies.

For the start of 2011, this strategy has proved successful. Improving economic conditions have been beneficial for many large, quality companies. As a result some of the biggest names underlying the Berkshire umbrella have also become some of the portfolio's strongest movers.

According to a report from Bespoke, two standout performers in Buffett's portfolio right now are energy goliath, Exxon Mobil (XOM - Get Report) and U.S. conglomerate, General Electric (GE - Get Report). As of Feb. 16, year to date, these two companies are up 15% and 17%, respectively.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
IOO $76.55 -0.12%
BAC $17.94 -1.00%
BRK.A $215,160.00 0.19%
GE $26.12 0.00%
XOM $79.31 -4.50%

Markets

Chart of I:DJI
DOW 17,696.88 -49.10 -0.28%
S&P 500 2,107.66 -0.97 -0.05%
NASDAQ 5,136.8170 +8.0320 0.16%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs