NEW YORK (
) -- As expected, Warren Buffett's 13-F filing for the fourth quarter of 2009 provided some interesting insights into the Oracle's investing outlook for 2010.
In past quarters, analysts have been interested in the new companies added to the
portfolio. This time, what was absent from the company's portfolio gained the most attention.
In the final three months of 2009, Buffett, without adding any new names, made some noteworthy increases in positions in his portfolio. Most notable were the increases in favorites such as Wells
, as well as the purchase of shares in
and waste management firm
. Iron Mountain saw the most love from the investor, who more than doubled his firm's stake in the data security firm.
Although some of Buffett's increases were significant, the Oracle came out a net seller in fourth quarter 2009. The 13-F highlighted his continued selling of
and a decrease in his positions in
Johnson & Johnson
Proctor & Gamble
However, his two most mentionable cuts were to his major oil positions:
This is not the first time that Buffett has reduced his exposure to COP, since he cut his exposure in the third quarter as well. In the past, Buffett has explained that he made a mistake in 2008 when he dramatically increased his stake in COP at the height of oil's rise.
Buffett's decision to cut Exxon Mobil, on the other hand, is surprising. Exxon got a big Buffett blessing when the investor was shown to have bought a nearly $100 million stake in the firm in the third quarter. However, according to the most recent 13-F, in the fourth quarter of 2009 the position was cut by nearly 70%. With no follow-up comment from Buffett or Berkshire Hathaway, the drastic decrease has left many analysts scratching their heads.
The short period Buffett held the oil major before making a sale goes against his traditional buy-and-hold investing strategy. Some believe that his decision to dump such a large portion of XOM may reflect his disappointment with the firm's decision to buy natural gas giant
In recent months, Buffett spoke out against the stock-heavy
( KFT) acquisition of
( CBY). Despite the criticism, according to the recent 13-F filing, no changes were made to his Kraft position at the close of 2009.
The opposite appears to be the case with the Exxon deal. When the multibillion-dollar, all stock transaction was announced in December, the Oracle barely made a peep. Instead, he took action.
As I've highlighted in previous articles, Warren Buffett does not typically favor takeover bids fueled by company stock. The financier's concerns stem from the belief that when a company issues additional shares, it floods the market with excess supply, drives down prices and dilutes shareholder power.
In the past, when Warren Buffett made a move, investors listened. Does his decision to dump large chunks of oil giants like COP and XOM have you second guessing your own energy positions? Are you planning to make any changes to your portfolio now that Buffett's holdings have gone public? Feel free to leave a comment below.
-- Written by Don Dion in Williamstown, Mass.
At the time of publication, Dion did not have any positions in the equities mentioned.
Don Dion is president and founder of
, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.
Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.