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Buffett's Lieutenants Impact Berkshire's Most Recent Purchases

DIRECTV stands out among Berkshire's fourth-quarter stock purchases; IBM and Wells Fargo are other big buys.

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By Drew Woodbury | Stock Analyst

When we relaunched the Ultimate Stock-Picker concept two years ago, we made a point of including a few insurance companies in our list of top managers because, unlike their peers in the mutual fund business, the portfolio managers at insurance companies tend not to be impacted by investor redemptions during weak market environments. They're also a bit more long-term oriented than most fund managers, investing their portfolios according to the time horizon and payout profiles associated with the product lines that are underwritten by their firms. While fixed income tends to dominate the average insurance company's investment portfolio, as the asset class provides a steady stream of cash flows necessary for duration matching, some insurers choose to hold a larger portion of their investment portfolios in stocks, which have historically generated superior returns over other investments when looked at in the long term.

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