In Berkshire Hathaway’s latest update published Saturday, Warren Buffett reiterated support for his massive holdings in IBM, Wells Fargo & Co. and Coca-Cola Co. He says, , they “possess excellent businesses and are run by managers who are both talented and shareholder-orientated”. This is exactly the same phrase he used to describe them in his last report. See my January log, The Year Warren Buffett Revealed As The Emperor With No Clothes.
IBM fell 14 percent in 2015 and AmEx plunged 25 percent, with both extending their declines since year end. While Berkshire is still sitting on big gains from the American Express stake, IBM trades for less than what Buffett paid in 2011. The unrealized loss on IBM widened to $2.6 billion as of Dec. 31 from $2 billion at the end of the third quarter. “We currently do not intend to dispose our IBM common stock,” Berkshire said in its annual report Saturday. “We expect that the fair value of our investment in IBM common stock will recover and ultimately exceed our cost.” Wells Fargo has dropped about 12 percent over the last year and Coke is little changed in that period.
In the last six months Berkshire Hathaway share price has fallen 3.48%, weighed by these poor investments, versus an unchanged Dow Jones.