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Warren Buffett's Portfolio Gains with Wells Fargo

Written By Brian Hicks

Posted September 18, 2012

In news that’s sure to surprise almost no one, Warren Buffet’s investment in Wells Fargo (NYSE: WFC) has been paying off nicely. Wells Fargo & Co. has rallied by around 24 percent since the end of December last year.

Currently, Wells Fargo comprises roughly 17 percent of Berkshire Hathaway’s (NYSE: BRK.A) domestic portfolio and about 1.4 percent in the S&P 500 Index. As the bank has seen its shares rise, so has Berkshire’s portfolio.

Buffett, now 82, continues to oversee the majority of Berkshire’s near-$90 billion equity portfolio, which has its biggest stakes in IBM (NYSE: IBM) and Coca-Cola Co. (NYSE: KO). He also continues his long-held philosophy of intensively researching stocks before buying them and buying while leaving healthy margins of safety should his estimates prove erroneous. He also likes long-term holdings.

Bloomberg reports:

“That’s a proven way to maintain a competitive advantage in this crazy business, where people judge their performance on a daily basis and do stupid things as a result,” said Jeff Matthews, a Berkshire shareholder and author of “Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett.”

So far this year, Berkshire has earned 13.9 percent on its portfolio, compared with 13.7 percent for the S&P 500 Index. That improves 2011’s performance by 4.4 percentage points. The company has also recently been spreading its risks around, moving away from giving too much into any one particular industry.