Warren Buffett's largest legacy investments continue to suffer, even as the shares of
have climbed over the past two weeks.
Consider the poor short-term and long-term charts of Berkshire's four largest equity investments (number of shares, percentage ownership and year-end dollar value follow ticker):
- Coca-Cola (KO) - Get Report -- 200 million shares, 8.6% of total outstanding shares and $12.3 billion;
- Wells Fargo (WFC) - Get Report -- 303 million shares, 9.2% of outstanding shares and $9.2 billion;
- Kraft (KFC) -- 124 million shares, 8.1% of outstanding shares and $8.1 billion; and
- American Express (AXP) - Get Report -- 151 million shares, 13.1% of outstanding shares and $7.9 billion.
Holding these four stocks "forever" has not been value-additive to Berkshire over the last decade; it's been a particular drain over the short term. Indeed, lugging these sizeable investments has resulted in lost opportunities. Moreover, to paraphrase the Master, "Where are the future moats at Coca-Cola, Wells Fargo, Kraft and American Express?"
Warren Buffett, who has achieved a remarkable investment record over 50 years, has begun to morph from the "Shakespeare of investing" into the "Mozart of marketing" -- of course, I am using exaggeration to make my point! -- as the law of large numbers has begun to disadvantage Berkshire. The company's asset and earnings bases are simply too large for the business to make outsized gains in the future.
shorted more Berkshire Hathaway yesterday.
Doug Kass is the author of The Edge, a blog on
that features real-time shorting opportunities on the market.
At the time of publication, Kass and/or his funds were long Wells Fargo and short Berkshire Hathaway, although holdings can change at any time.
Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Short Offshore Fund, Ltd.