Tags: CNNMoney Buffetts Top Stocks Are All Dogs

CNNMoney: Buffett's Top Stocks Are All Dogs

CNNMoney: Buffett's Top Stocks Are All Dogs
Warren Buffett (AP)

By    |   Wednesday, 21 October 2015 09:18 AM

Most of billionaire investing icon Warren Buffett’s favorite stocks are having terrible years, costing the chief executive officer of Berkshire Hathaway Inc. breath-taking losses.

“Buffett adores blue chip companies that are relatively easy to understand. He's shunned the new economy darlings like Facebook (FB), Amazon (AMZN) and Netflix (NFLX) in favor of older, more mature businesses,” CNN Money reported. “But that's been a bad strategy this year.”

Among the Oracle of Omaha’s favorites:

IBM (IBM)

Big Blue is one of Berkshire's top four stocks, with Buffett buying even more this year, CNNMoney reported. IBM just reported its 14th consecutive quarter of sales declines and its shares sank nearly 6% Tuesday and are down 12% year-to-date.

“Berkshire Hathaway’s stake of nearly 80 million IBM shares was worth about $664 million less Tuesday morning, after Big Blue whiffed on quarterly revenue expectations and gave little indication things are going to get any better in the short term,” Forbes.com reported.

Wells Fargo (WFC) and other big banks

Shares of the megabank, Berkshire's second-largest investment, are down 3%. Buffett also has decent-sized stakes in U.S. Bancorp (USB) and Goldman Sachs (GS). Both of those banks stocks are in the red this year too.

Coca-Cola (KO)

Coke, Berkshire's third-largest holding, reported lower-than-expected quarterly revenue as a strong dollar reduced the value of sales in markets outside North America, Reuters said. But rivals Pepsi (PEP) and Dr Pepper Snapple (DPS) have been much better performers.

AmEx (AXP), P&G (PG) and Wal-Mart (WMT)

CNNMoney described this trio as “the real dogs of Berkshire's portfolio”:

  • American Express, Berkshire's fifth largest holding, has plunged 17% this year. 
  • Procter & Gamble, Berkshire's seventh biggest investment, is down 18%.
  • Wal-Mart stock has plummeted more than 30% this year and is the worst stock in the Dow.

Wal-Mart last week suffered its worst drop in more than a decade after warning that upcoming profits will be far weaker than projected. “That dive cost Buffett’s fellow billionaires the Walton family more than $9 billion in a single day and knocked $405 million off Berkshire’s stake,” Forbes reported.

But “losing a billion dollars from a single day’s worth of market action isn’t exactly going to send Buffett to the poorhouse. He’s worth $62.7 billion, good for second on the Forbes 400 behind Bill Gates” in the latest rankings, Forbes reported.

“Buffett’s investments aren’t intended for short-term wins though, and historically the 85-year-old has used periods of weakness to build positions on the cheap. If there’s one investor with the patience and pocketbook to withstand the wreckage in stocks like Wal-Mart and IBM, it’s Buffett,” Forbes pointed out.

But others have cast doubt over Buffett's once Midas touch for investing.

Martin Sosnoff, CEO of money manager Atalanta Sosnoff Capital, offers a bold critique of Buffett. "You don’t want Buffett at this stage in his career for stock picking," Sosnoff writes on Forbes.com. "Rather, his investment banking and deal prowess is now the existential core of his closing career years."

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Most of billionaire investing icon Warren Buffett’s favorite stocks are having terrible years, costing the chief executive officer of Berkshire Hathaway Inc. breath-taking losses.
CNNMoney Buffetts Top Stocks Are All Dogs
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2015-18-21
Wednesday, 21 October 2015 09:18 AM
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