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How Warren Buffett’s Investment Philosophy Has Evolved


Mar. 4 2019, Updated 1:24 p.m. ET

Warren Buffett’s investment philosophy

Last month, we had two key regulatory filings from Berkshire Hathaway (BRK-B). On February 14, Berkshire Hathaway released its 13F for the fourth quarter. The 13F was followed by its annual letter on February 22. The key attraction of Berkshire’s annual report is the annual shareholder letter from chair Warren Buffett. Over the last five decades, Buffett has used his annual letters to communicate with investors. These letters have also provided a lot of insight into Buffett’s investment philosophy.

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Berkshire Hathaway trimmed stakes in Apple (AAPL), Wells Fargo (WFC), Southwest Airlines (LUV), United Continental (UAL), Phillips 66 (PSX), and Charter Communications (CHTR). However, it added more shares of US Bancorp (USB), J.P. Morgan Chase (JPM), Bank of America (BAC), and Bank of New York Mellon (BK). Berkshire Hathaway added Suncor (SU) and Red Hat (IBM) (RHT) to its portfolio and exited Oracle (ORCL). Read Is Warren Buffett Expecting a Market Crash for more information.

Annual letter

In his annual shareholder letter, Buffett expressed his views on several issues including buybacks and the economy (SPY). He also said that Berkshire is looking at a big acquisition but lamented the lack of big acquisition opportunities at reasonable prices. Buffett also warned against doomsayers and highlighted that equities tend to deliver good returns over the long term. Buffett also apparently took a dig at US President Donald Trump. Read Warren Buffett and the Problem with Elephants for more analysis of Buffett’s annual letter.

Buffett’s investment philosophy has evolved over the last five decades. One of the most recent changes is that Buffett has stopped highlighting the change in Berkshire Hathaway’s book value. We’ll discuss this in detail in the next article.


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