Warren Buffett's Portfolio

By Arthur Pinkasovitch | May 19, 2010 AAA

Warren Buffett is without a doubt one of the, if not the, greatest investors of all time. The Oracle of Omaha truly epitomizes the values of long-term investing, believing that a stock which cannot be held for 10 years should not even be owned for 10 minutes. Warren Buffett's first rule of investing is "never lose money;" the second, "never forget rule number one."

IN PICTURES: World's Greatest Investors

The Oracle of Omaha
Buffett has had a profound influence on the investment community, and although he is almost 80 years old, he still holds respect and admiration from his peers and followers. Berkshire Hathaway's annual meetings have become the "Woodstock of capitalism."

Buffett learned the art of value investing under Benjamin Graham. However, while Graham focused strictly on uncovering hidden value from the financial statements of a company, Buffett took the discipline further, analyzing the management team and competitive advantage that the firm has to offer.

A look into Buffett's portfolio reveals to outside investors where the billionaire sees hidden value. Those who base their investment strategy to mimic the holdings of the professionals should take note. The table below provides seven of the top holdings of Warren Buffett's Berkshire Hathaway.

Top Portfolio Holdings
American Express (NYSE:AXP)
Coca-Cola (NYSE:KO)
Kraft (NYSE:KFT)
Procter & Gamble (NYSE:PG)
Wal-Mart (NYSE:WMT)
Wells Fargo (NYSE:WFC)
US Bancorp (NYSE:USB)

Kraft
Warren Buffett sold over 31 million shares of Kraft, following its acquisition of Cadbury. Since Buffett views the company shares as undervalued, he criticized Kraft for using stock, rather than cash, for the acquisition. Nonetheless, Berkshire remains Kraft's largest shareholder with 106.7 million shares (as of March 31, 2010). Buffett's position in ConocoPhillips (NYSE:COP), which ranks in the top 10 holdings, was also reduced in the first quarter by 9.4%.

Coke
Coca-Cola is one of Warren Buffett's favorite stocks, due to its low business risk, high profit margins, high cash flows and dividend payouts. Berkshire currently holds 200 million Coca-Cola stocks. With a holding value of over $10 billion, this makes KO the largest holding. Buffett owns 320 million Wells Fargo shares, which are currently worth almost $9.5 billion.

Financials
The two other top financial positions held by Warrant Buffett are U.S. Bancorp and American Express, which respectively have 69 million and 151.6 million shares held by Berkshire. According to newsreview.com Buffett's holding company receives 12.7% of the profits made on American Express card purchases.

Selling Shares
While Warren Buffett retains 79 million shares of Proctor & Gamble, a position that doubles his Wal-Mart holding, Berkshire recently reduced its stake in the consumer goods manufacturer. Although Buffett has recently been selling large chunks of some of his major holdings, investors should still take note of the positions retained.

The Bottom Line
Warren Buffett's portfolio has undergone some major changes in the last quarter, but his major positions remain the same. The stocks he selects are determined with great depths of research, and could prove to be healthy additions to one's portfolio.

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