Warren Buffett is the chairman of Berkshire Hathaway, and has a large say in what the company invests in. His successful track record over many decades means that people are keen to track the actions he’s taking. In the US, each quarter a breakdown of stock positions has to be reported (known as a 13F). So based on the latest filing from Q4, here are the actions that I want to copy.
Staying focused on the long term
Firstly, even as sentiment in the stock market started to become more cautious late last year, Warren Buffett didn’t panic. At the time, there was concern that high inflation was going to cause the central banks to raise interest rates quickly in 2022. In fact, this is one reason why the Nasdaq fell so heavily in January.
Even with this backdrop, Warren Buffett stood firm regarding his holdings of Apple, Bank of America and American Express. These are his three largest holdings. What this tells me is that he wasn’t overly concerned about the outlook late last year. It also indicates to me that even if he thought that there could be a correction, his mindset was — and is — focused on the long term. This ties in with his overall investment philosophy. He aims to look past the ‘noise’ and stay focused on the outlook for a company based over several years.
Personally, this makes me less focused on buying and selling frequently. After all, even if I manage to sell before a move lower, it’s hard to pick the perfect time to buy back again. To avoid the stress of trying to perfectly pick the best moments to sell, it’s easier for me to stay invested.
Mixing up value and growth options
In terms of buying, Buffett increased his stake in Chevron and added a new position in Activision Blizzard. This indicates a couple of points to me. On eis that he’s still keen on value investing, shown by him buying more Chevron shares. The oil and gas company is active in 180 countries, and has a rich history. Then he’s also interested in what’s hot at the moment. Activision Blizzard is a leader in video games creation and digital graphics. With the acquisition from Microsoft due to be completed in 2023, Warren Buffett was clearly thinking ahead with this smart pick.
From my point of view, I want to get a similar balance of investing in reliable, dependable names alongside some more adventurous options. I think I can find good quality from UK banks and other financial services companies. As for the hot areas, I think renewable energy is the sector to be looking at right now.
Learning from Warren Buffett
Although I appreciate that the 13F form will always reflect past actions, it does give me a good insight into what Warren Buffett and his management team are thinking. Over time, I can take these broader principles and apply them myself, to try and improve my own performance.