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Market Update

Berkshire Sells More Legacy Holdings in 3Q

Trading activity picks up with Buffett's two lieutenants, Ted Weschler and Todd Combs.

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 Berkshire Hathaway's (BRK.A) (BRK.B) third-quarter 13-F filing, which details the firm's equity holdings, continued to show evidence of the primary theme that we expect to drive portfolio movements over the near to medium term. With Berkshire's appointment of Ted Weschler and Todd Combs as lieutenants to Warren Buffett, the company has been active over the last several quarters selling legacy positions and in the process raising capital for the two managers to invest. 

While a fair amount of the buying activity of late has been initiated by Buffett--with his favorite target continuing to be  Wells Fargo (WFC)--we have seen plenty of trading activity on the part of Weschler and Combs. And while Buffett did make a point during the third quarter of noting that each of these two managers would be working with a "bank" of around $4 billion each (exclusive of any gains/losses on capital that has already been put to work)--up from $1.75 billion each at the end of last year and $2.75 billion each at the end of the first quarter--we think that this amount could rise even higher in the near term, given the amount of selling that has taken place in the portfolio.

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Greggory Warren does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.