Friday, February 13, 2015

Some questions on an above average interesting 13-F season

A great business less from Peter Drucker- it's amazing what you can achieve as a team if you don't care who gets the credit. A related theme for individual investors is - its amazing the ideas you can uncover if you don't mind cloning. This time of year is always interesting. Charlie Munger and Mohnish Pabrai talk about the virtues of cloning ideas:

Pabrai says most of his investment ideas come from other great investors -- though I think he's being modest. "God bless the SEC for their 13-F requirements," he said. "In fact, Nov. 14 was the last time when the 13-Fs came out, and you know, I'm like a pig in [expletive]. It's just great because there's so much to look at. That keeps me busy for a few weeks, and then the next 13-Fs come out."

Sites like Dataroma and GuruFocus do a great job of summarizing the information. Given the energy washout and other knock on events, this season figures to be more interesting than most.

Two investment operations that I follow are Tom Gayner at Markel and Berkshire Hathaway.

Tom Gayner had a couple of large and somewhat surprising moves in the last quarter. First, he sold out of all of his Coca Cola and sold out 74% of Markel's Berkshire Hathaway holdings.  Reading the tea leaves is always hard. Coke was a relatively small position and so perhaps it was just time to move on.  However, its does not appear overvalued to me. The Berkshire selling is harder to figure. Granted Berkshire appreciated quite a bit last year, but I assume that Markel incurred a fair amount of capital gains on the transaction. The sells were the most interesting events, Gayner did not make major investments in energy, though he did nibble a bit in energy. The biggest buy was Deere which takes advantage of the weakness in Ag stocks. Raven has been suffering for similar reason.

The Berkshire 13-F should be out very soon. Its always interesting to see what they do with buying new positions or managing existing ones. Given the context, this year there are a lot of interesting questions:

* Did they buy more IBM. Buffett laid out a great case for IBM when he bought it and said he did not expect a ton of growth in the near term, but I doubt he expected the challenges they faced. For one thing, buybacks were a big part of the thesis and those are halted. IBM is one the largest single buys he has ever made, and the price has gone down. Did he buy more?

* Energy - Exxon has only gotten cheaper, did Buffett buy more of that? Ted Weschler and/or Todd Combs own CBI also in energy, price got cut in half - did they buy more? Same goes for Suncor, National Oilwell Varco, and other evergy holdings.

The 13-F will be followed by a special 50th anniversary letter by both Buffett and Charlie Munger, so February promises to be a great month for reading.

No comments:

Post a Comment