As the famous Warren Buffett quote goes, the time to be greedy is when others are fearful. And amid the euro zone debt debacle, political unrest in the Middle East and persistently high unemployment in America, there are plenty of reasons for most investors to be fearful these days.
That helps explain why, despite a horrific summer, Buffett’s Berkshire Hathaway (NYSE:BRK.A, BRK.B) went on a $24 billion shopping spree from June 1 to Sept. 30. Though the broader market lost about 14% in that three-month period, it seemed Warren Buffett was focusing on bargain buys instead of the daily gyrations of the market.
It was the biggest buying push for Berkshire in at least 15 years. And given the big surge in October and recent strength of the market, the purchases could end up being quite a shrewd move by Buffett and his Omaha company.
Leading the ledger was a big $5 billion investment in preferred shares of Bank of America (NYSE:BAC) and the formal closing of a $8.7 billion deal for chemical company Lubrizol months after a deal was announced and subsequently overshadowed by impropriety by Buffett protégé David Sokol.
However, absent these deals is still an aggressive $6.9 billion in common stock purchases for Berkshire Hathaway and its iconic leader, Warren Buffett. According to reports, Berkshire invested about $3.6 billion in common stock in the second quarter of 2011 and less than $1 billion in Q1.
Perhaps most interesting is that Buffett’s penchant for banks and consumer stocks was spiced up by moves into “commercial, industrial and other” companies, according to a regulatory filing. Coca-Cola (NYSE:KO) remains Warren Buffett’s top holding, at about one quarter of Berkshire’s portfolio and far above all others. In at No. 2 is Wells Fargo (NYSE:WFC) with a bit less than 2% of the total portfolio. These bulletproof blue chips are exemplary of the buy-and-hold, bargain-hunting philosophy of Warren Buffett.
Stock holdings labeled “commercial, industrial and other” soared 62% in the three months — but as for the specifics, investors will have to wait. Berkshire hasn’t filed its third-quarter stocks statement as of yesterday. However, Buffett disclosed earlier this year that the company had taken up new stakes in MasterCard (NYSE:MA) and discounter Dollar General (NYSE:DG). Berkshire Hathaway has requested permission to omit some information from its filings to limit copycat investing.
As for what’s next for Buffett, it’s hard to tell. Will he keep adding to his positions now that the market is rising — or is the buying going to slow down?
In a strange but interesting move a few days ago, Cheuvreux analysts in Europe wrote an open letter to Buffett, urging him to come bargain hunt in knocked-down euro zone blue chips like ABB (NYSE:ABB) and Unilever (NYSE:UL). Maybe Europe is indeed next on the bargain hunting list.
Of course, Warren Buffett seems to be spending as much time talking about taxes these days as investing. Worth about $39 billion, Berkshire’s iconic CEO is second only to Bill Gates’ $59 billion this year among America’s wealthy. So perhaps politics will stay the priority as the 2012 elections approach.
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. As of this writing, he did not own a position in any of the aforementioned stocks.
