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Investing Specialists

What Berkshire Hathaway Has Been Buying and Selling

Berkshire's quarterly holdings are always well received (and well picked through).

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By Bill Bergman | Senior Stock Analyst

When we relaunched Ultimate Stock-Pickers last year, we made a point of including a few insurance companies because, unlike their peers in the mutual fund business, the portfolio managers at insurance companies are not impacted by investor redemptions during poor market environments. They also tend to be a bit more long-term oriented than fund managers, investing their portfolios according to the time horizons and payout profiles inherent in their companies' product lines. Fixed income tends to dominate the investment portfolios of most insurance companies, as the asset class provides a steady stream of cash flows and (in most markets) less risk than equities. That said, there will always be room for stock holdings, which provide the potential for capital appreciation.

Of the four insurance firms in our Investment Manager Roster-- Berkshire Hathaway (BRK.A)(BRK.B),  Markel (MKL),  Alleghany (Y), and Fairfax Financial, Berkshire Hathaway is probably the best known, owing to the legendary status that Warren Buffett and Charlie Munger have with investors. Buffett has been involved in Berkshire's investment portfolio for much of the last forty years, while Munger has been contributing to investment decisions at the firm for nearly as long. This type of longevity is rare among asset managers, and speaks to the success Berkshire has had finding investments that not only meet the needs of the business, but allow Buffett and Munger to demonstrate their investing acumen. Insurers are, ultimately, only as good as the promises they make (and keep), with the capital they collect and maintain (through their investment portfolios) playing a leading role in their ability to meet those promises.

The Morningstar Ultimate Stock-Pickers Team does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.