It is widely known that the bulk of Warren Buffett’s substantial wealth is concentrated in Berkshire Hathaway (BRK.A, BRK.B) stock. But it isn’t, perhaps, as well known that Mr. Buffett derives the bulk of his income, not from his $100,000 salary from Berkshire but from dividend payments from his personal stock holdings. A recent article on Morningstar took a look at Mr. Buffett’s personal holdings through information gleaned from filings with the SEC. Here are some highlights:

  1. Buffett’s portfolio is valued at $1.86 billion and the portfolio has an annual yield of $42.58 million.
  2. The portfolio has just 10 stocks and the top holding — Wells Fargo (WFC) — makes up nearly a quarter of the portfolio.
  3. More than half the portfolio is held in four Dow Jones component stocks: Johnson & Johnson (JNJ), Procter & Gamble (PG), Kraft Foods (KFT) and Wal-Mart (WMT). In fact, two more stocks (Exxon Mobil and GE) in the portfolio are Dow Components.
  4. The Morningstar article points out that every single business in Buffett’s portfolio has been around for more than a century. The newest business would be UPS, which was founded as recently as 1907.

I went looking through SEC filings to figure out how Buffett’s portfolio holdings have changed over time. The furthest I could go was 2006 because prior to that Buffett’s holdings were either not reported or were combined with reporting from other related entities. The following table lists the holdings (number of shares) of Buffett’s personal portfolio as of December 31st for the period 2006-09:

Warren Buffett's Personal Portfolio

Some interesting points:

  1. 2009 was a busy year for Buffett. He increased his holdings in Wells Fargo significantly, added Wal-Mart and Exxon Mobil and sold Constellation Energy.
  2. Other major holdings are also recent additions. US Bancorp, Procter & Gamble and Kraft Foods were purchased in 2007.
  3. Overall, the portfolio has very low turnover. Other than Constellation Energy, which was purchased in 2008 and sold in 2009, Buffett adds stocks to the portfolio but rarely sells them.

This article has 11 comments

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  2. Nice to see Mr. Buffett ensures the gap between rich and poor further increases by remaining a stockholder in companies such as WalMart! Ever wonder what the real cost of “cheap” is?

  3. @ Dave From GP

    That seems like a bit of a cheapshot. If you want place blame for the gap in wages, blame the people who shop at WalMart and similar stores who buy the cheap goods. They guy donates a lot of money to charity. If some of that money comes from profiting off of a stock like WalMart, I have no problem with it. If it wasn’t him owning the shares, it would be someone else.

    And Buffett’s wage is only $100K!

  4. This site lists what managers are buying for their institutional funds:

  5. Canadian Capitalist

    @Dave: Buffett isn’t much into socially responsible investing. Remember the kerfuffle over his stake in Petro China a few years back? But that doesn’t mean that he won’t change his mind if society’s attitudes change. In the past, he has changed his mind on the economics of the tobacco business.

    I find it hard to draw the line when it comes to mixing ideals with investments. Where does one draw the line? Resource companies despoil the environment. Tobacco companies kill their own customers. Many financial companies employ predatory tactics, especially when it comes to their poorest customers. Many manufacturers are also involved in making war machines. Not even pharmaceuticals, which are in the business of saving lives, can claim to be squeaky clean.

    @Mathew: I agree with you. When it comes to Buffett, the positives far outweigh what in some eyes might be blemishes. We need more people like him around.

  6. One of many famous quotes from Warren Buffett is that it’s perfectly OK to have all of your eggs in one basket – as long as you watch that basket VERY VERY closely! I find it rather interesting that he has less diversification (in terms of number of different stocks) than I do and that he is walking his talk.

    I’ve always steadfastly maintained the rule of thumb that no single investment should constitute more than 5% of your portfolio – which is a Kevin O’Leary-ism. Of course, that means that we’re forced to try to monitor at least 20 (or likely many more) different investments. I admit that I sometimes find it difficult to stay on top of what each of my investments are doing – so perhaps maybe that strategy is worth reconsidering…

    Another big difference is that Buffett is solely invested in the large-cap household names whereas I have investments of all sizes in my portfolio. It will take work for me to get comfortable with holding a small number of names.

    • Canadian Capitalist

      @Phil: Yes, it’s interesting to see Buffett is really practicing what he preaches: (1) concentrated portfolio (2) Buy and hold “forever” (3) Businesses with wide moats (Kraft, Procter and Gamble, Johnson & Johnson) (4) Businesses with fairly predictable revenue streams (no Apple or RIM here).

      I also find it interesting that Buffett holdings include a big chunk of Dow components. But then, with such a large portfolio, it is probably impossible to buy small caps.

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  9. Doesn’t Mr. Buffett also pay less taxes in percentage terms than his secretary? 😉

    I’ve always liked his ideas of investing: Invest only in what you know and understand, and invest for the medium to long term and don’t look to jump in and out of the market trying to make quick gains.
    These really seem to be common sense ideas and they are appealing.

    I also like this paragraph: “The dirty little secret in the professional investment management business is that many hedge fund managers–like those investing in Berkshire Hathaway, American Express, Wells Fargo, and Wal-Mart–mimic Warren Buffett’s stock picks. For this privilege, their clients are charged 2% of their assets and another 20% of the realized profits. Buffett calls these professionals the “2 and 20 Club” or “helpers.” The irony is, these pros are not even thinking for themselves but are simply imitating what Buffett and others are doing with their investment portfolios.” 😛

  10. Actually the article you are quoting is incorrect. It does not make any sense to have the CEO of a corporation disclose his own personal holdings in his company’s SEC filings. The assets of the CEO and the corporation are separate. Buffett’s personal portfolio includes Berkshire Stock and most probably Wells Fargo (WFC) , which he has mentioned to be a buy in previous interviews.

    I have read over the net and am really amazed how people trust this article you are refering to, without questioning it at all.