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Investing Specialists

A Closer Look at Berkshire Hathaway's Most Recent Purchases

IBM was not the only new addition to the insurer's stock portfolio during the third quarter.

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By Greggory Warren, CFA | Senior Stock Analyst

When we relaunched the Ultimate Stock-Pickers concept back in April 2009, we made a point of including several insurance companies on our list of top managers 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. This was evident during the most recent period, as most of the fund managers on our list were in net redemption mode, with many of them building up fairly meaningful cash positions as they closed out the third quarter. Meanwhile, the four insurance companies on our Investment Manager Roster-- Berkshire Hathaway (BRK.A) / (BRK.B) , Markel (MKL), Alleghany (Y), and Fairfax Financial (FRFHF)--were net buyers during the period, taking advantage of the dislocation in the global equity markets to either add to existing stakes or put new money to work in names that were not previously held in their portfolios. With the insurers tending to be a bit more long-term oriented than fund managers, investing their portfolios according to the time horizons and payout profiles associated with the product lines underwritten by their firms, we like it when these managers are putting money to work, or selling out of positions, as these moves tend to have a bit more conviction behind them.

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.