Berkshire Made $60M+ By Selling Intel

by Tom Taulli | September 14, 2012 10:42 am

Berkshire Made $60M+ By Selling Intel

For decades, Berkshire Hathaway’s (NYSE:BRK.A[1], BRK.B[2]) Warren Buffett has talked about his core principles of investing. These include focusing on companies he understands, finding overlooked value and holding an investment for the long haul.

But Buffett is not a purest. Sometimes he deviates from his core ideas, such as seen with his investment in Intel (NASDAQ:INTC[3]), which he sold within less than a year[4]. Not to mention that Buffett traditionally chooses to stay away from tech stocks!

Still, the Intel investment turned out well, netting Berkshire a tidy $60 million-plus profit, for a gain of about 25% on the trade, according to Bloomberg.

The holding was relatively small, especially compared to Berkshire’s massive stakes in Coca-Cola (NYSE:KO[5]), Wells Fargo (NYSE:WFC[6]) and American Express (NYSE:AXP[7]). The Intel trade also likely was influenced Berkshire’s new managers, Ted Weschler and Todd Combs, who appear to have some differences in investing styles from the Oracle of Omaha.

But this is a good thing. Going forward, it won’t be easy to generate market-beating returns. A little creativity at Berkshire might go a long way.

Tom Taulli runs the InvestorPlace blog IPOPlaybook[8], a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling”[9] and “All About Commodities.”[10] Follow him on Twitter at @ttaulli[11]. As of this writing, he did not own a position in any of the aforementioned securities.

Endnotes:
  1. BRK.A: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.A
  2. BRK.B: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.B
  3. INTC: http://studio-5.financialcontent.com/investplace/quote?Symbol=INTC
  4. which he sold within less than a year: http://www.bloomberg.com/news/2012-09-14/berkshire-posts-25-intel-gain-by-shunning-buy-and-hold.html
  5. KO: http://studio-5.financialcontent.com/investplace/quote?Symbol=KO
  6. WFC: http://studio-5.financialcontent.com/investplace/quote?Symbol=WFC
  7. AXP: http://studio-5.financialcontent.com/investplace/quote?Symbol=AXP
  8. IPOPlaybook: http://investorplace.com/ipo-playbook/
  9. “All About Short Selling”: http://www.amazon.com/All-About-Short-Selling/dp/0071759344/ref=sr_1_1?s=books&ie=UTF8&qid=1302184310&sr=1-1
  10. “All About Commodities.”: http://www.amazon.com/All-About-Commodities/dp/0071769986/ref=ntt_at_ep_dpi_10
  11. @ttaulli: https://twitter.com/ttaulli

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