Tags: berkshire | buffett | thumb | sucking

CNBC: Berkshire Holder Sells Stake, Accuses Buffett of 'Thumb-Sucking'

CNBC: Berkshire Holder Sells Stake, Accuses Buffett of 'Thumb-Sucking'
(Mohamed Ahmed Soliman | Dreamstime)

By    |   Monday, 14 October 2019 05:26 PM

David Rolfe, a longtime Berkshire Hathaway shareholder and chief investment officer at Wedgewood Partners, reportedly has dumped his stake in investment guru Warren Buffett’s company.

Rolfe told clients in a letter he sold the firm’s stake in Berkshire after decades of being shareholders, noting his frustration with the conglomerate’s massive cash hoard, lackluster investments and what he thinks are missed investment opportunities by the Oracle of Omaha and his team during the current bull market, CNBC.com reported.

Rolfe's RiverPark/Wedgewood Fund owned 48,000 shares of the Berkshire B class of stock, amounting to about $10 million, CNBC reported.

Berkshire Hathaway shares have lagged the S&P 500 over the current bull run, which started March 2009, CNBC explained. The Omaha, Nebraska-based conglomerate also owns more than 90 businesses such as the BNSF railroad, Geico auto insurance and Dairy Queen ice cream.

“Thumb-sucking has not cut the Heinz mustard during the Great Bull Market,” he reportedly wrote in the letter. “The Great Bull could have been one helluva of an astounding career denouement for Messrs. Buffett and [Vice Chairman Charlie] Munger.”

Berkshire ended June with a record $122.4 billion of cash and equivalents.

Berkshire’s biggest stock market commitment remains in financial services, where it is the largest shareholder in American Express Co. (AXP), Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC) and has a significant stake in JPMorgan Chase & Co. (JPM).

However, Buffett, the world’s fourth-richest person according to Forbes magazine, still has big-name fans in the investment community.

Billionaire U.S. investor William Ackman has long described how Buffett, often called the greatest stock picker ever, has influenced his career. Now he’s paying the Oracle of Omaha the ultimate homage with a new investment in Buffett’s Berkshire.

Ackman’s Pershing Square Capital Management bought 3.5 million Berkshire B shares during the second quarter, the fund manager said in a regulatory filing in AUgust, Reuters reported. At that time, the investment would be worth roughly $686 million.

It marks the first time that Ackman’s $8 billion fund has announced a new position since late last year when it bought a stake in Starbucks Corp. (SBUX).

The new stake in the company with a $510 billion market capitalization will be a passive investment for Ackman’s firm, a person familiar with his thinking said.

Pershing Square made its reputation as an activist investment firm by pushing for changes at companies ranging from railway Canadian Pacific to restaurant chain Chipotle Mexican Grill (CMG).

But Ackman is unlikely to offer suggestions or work behind the scenes to persuade the 88-year old Buffett, Berkshire Hathaway’s founder and leader, to change direction.

Indeed, Ackman has publicly credited Buffett with guiding his career. The 53-year old said he has studiously taken pointers from Buffett’s investor letters, including the ones he wrote before creating Berkshire Hathaway. Four years ago, Forbes featured Ackman on the cover of its magazine, calling him ‘Baby Buffett.’

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David Rolfe, a longtime Berkshire Hathaway shareholder and chief investment officer at Wedgewood Partners, reportedly has dumped his stake in investment guru Warren Buffett’s company.
berkshire, buffett, thumb, sucking
484
2019-26-14
Monday, 14 October 2019 05:26 PM
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