by Jeff Reeves | February 3, 2012 11:34 am
Well, January sure set a pleasant tone for 2012. The market recorded its best first month of the year since 1997, with the S&P 500 up 5%, the Dow up over 4% and Nasdaq up a stunning 9% from Jan. 1 to Feb. 1.
Warren Buffett didn’t seem to fare as well, though, with his iconic Berkshire Hathaway (NYSE:BRK.B) underperforming with a less than 3% return in January. But investors should know by now that Buffett stocks aren’t meant to be in your portfolio for a matter of weeks but for many months. The Oracle of Omaha has famously said that even if the market was open for just one day a year, he would still buy shares.
So don’t take this as a sign that Buffett has lost his edge just yet.
Which stocks is Buffett banking on in 2012? Here are the leaders so far. Share totals are as of the November filing for Berkshire Hathaway disclosure of equity stakes:
USG (NYSE:USG), 17.1 million shares. USG stock is up over 45% year-to-date in 2012.
Bank of America (NYSE:BAC), $5 billion in preferred shares bought with warrants at $7.14 per share. Common stock of BofA is up about 40% YTD, approaching $8 a share.
Ingersoll-Rand (NYSE:IR), 636,600 shares. Ingersoll-Rand is up 22% so far this year.
Moody’s (NYSE:MCO), 28.4 million shares. The ratings agency is up 14% in 2012.
Intel (NASDAQ:INTC), 9.3 million shares. Intel is up 11% so far this year.
Wells Fargo (NYSE:WFC), 361 million shares. Wells is also up 11% YTD.
American Express (NYSE:AXP), 151.6 million shares. AmEx is up 10% so far in 2012.
It’s no surprise that financials are the leaders here. Buffett’s value investing style has caused him to plow lots of cash into the financial sector in the wake of the crisis, and other Berkshire Hathaway holdings not making this list of double-digit gainers include U.S. Bancorp (NYSE:USB), Bank of New York Mellon (NYSE:BK) and M&T Bank (NYSE:MTB), all up roughly 8% so far in 2011.
It’s strange, then, that Berkshire would underperform with so many high fliers in there. But remember, the stakes are far from equally distributed. Berkshire’s portfolio has are some 200 million shares of Coca-Cola (NYSE:KO) — with a total value of $13.6 billion, give or take a few hundred million. Coke stock is in the red year to date, and that has held back Buffett & Co.
But you can be sure that if financials keep rallying and Coke turns around, Buffett will do just fine in 2012.
In the meantime, take a good look at what Buffett has been buying, and ask yourself if any of these picks are right for your own portfolio.
Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace??.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. Jeff Reeves holds a position in Alcoa, but no other publicly traded stocks.
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