The Capitalist Investor - Episode 65

Warren Buffett has been making a lot of portfolio moves. He recently sold 11 stocks—and then bought 10. We won’t dissect all of them but we do want to talk about the common themes. What sticks out? What confuses us? Would we make any of the same trades? Listen to this episode of The Capitalist Investor to learn more!

Outline of This Episode

  • [2:03] Warren Buffett’s 21 portfolio moves
  • [2:45] The stocks that Warren Buffett dumped
  • [12:43] Warren Buffett’s buys
  • [21:13] Our final takeaway: does anyone care?

The stocks that Warren Buffett unloaded

Warren Buffett unloaded 11 stocks, including trimming his major bank positions. He unloaded US Bancorp, diluted Wells Fargo, and fully exited JPMorgan Chase & Co and P&C Bank. None of this surprised us.

Neither did his sales of Apple. Why? Because he simply trimmed the amount of Apple that he owned by 6%. He’s been on record saying that he feels like Apple is the 3rd part of his company because he owns so much. The stock has tripled since January of 2019. He’s taking profits and managing his risk.

He also sold Ford + GM right before their upswing, which may have been his most ill-timed trade. But what surprised us the most is that he bailed on Pfizer. Does he know something we don’t know? It doesn’t make sense since he loaded up on Merck.

Warren Buffett’s buys

Warren didn’t add any “new economy” stocks or work-from-home stocks. It’s not his strategy. He wants to invest in companies that he understands. So what did Warren Buffett buy? Restoration Hardware (RH) made the list. RH can be described as a high-end very expensive furniture store that does fixtures, bathroom vanities, etc. with reclaimed wood.

He also bought Bristol Myers Squibb, which we’re a fan of. COVID was the C-word in 2020. But once we move past it, the C-word will become cancer again. He also bought Merck.

A complete surprise on his list was buying T-Mobile—the 5th rated cell phone carrier. Why would Warren Buffett buy it? We’d expect him to own AT&T or Verizon (which he does). Maybe it’s because it’s at a good price right now when everything else is super expensive? Maybe it’s a value play?

We aren’t fans of energy trades in the long run, but he made some money buying Chevron. Electric vehicles are the way of the future. Tesla is years ahead, but Ford and GM won’t go away quietly.

Our final takeaway: does anyone care?

Does anyone care what Warren Buffett is buying anymore? He had been front and center as “the guy” that everyone wanted to emulate, but he’s faded over the last couple of years. We love tracking him because he’s a legend—but people don’t look at his moves to do the same thing with their portfolio.

As we come out of the pandemic, we will enter a period where picking stocks—versus riding along in an index—will get you further along. You can’t be a set it and forget it type of investor. Everyone got a free pass in 2020. That will change.

Resources & People Mentioned

Connect with Derek Gabrielsen

Connect With Mark Tepper

Send your questions and comments to us at info@SWPConnect.com

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Keep Listening to The Capitalist Investor:
Episode 13:
Fireside Chat with a Firefighter, Ep #13
Episode 29:
Is a Vacation Home an Investment? Ep #29
Episode 45:
Spooky Stocks: Proceed with Caution, Ep #45
Episode 61:
Special Episode: The Super Bowl Indicator, Ep #61
Episode 14:
Positioning Your Portfolio During A Recession, Ep #14
Episode 30:
The “New Normal” Investing Playbook, Ep #30
Episode 46:
Red or Blue, These Stocks are Tried and True, Ep #46
Episode 62:
6 Actionable Lessons for Investors, Ep #62