Accounting Charges Bite Buffett, But He’s Still Bullish On These Stocks (BRK.A, USB, SNY, KFT, WFC, BRK.B)
Due to an SEC inquiry regarding its practices for writing-down investment losses, Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) was forced to take an accounting charge related to the declines in three of the firm’s equity investments, but that isn’t stopping Berkshire from defending its view on those stocks.
Berkshire took a $938 impairment charge in the fourth quarter to reflect losses on investments in US Bancorp (USB), French pharmaceuticals giant Sanofi-Aventis (SNY) and Swiss Reinsurance, but Berkshire CFO Marc Hamburg said the levels those shares currently trade at doesn’t accurately reflect the real value of the stocks and noted in a letter to the SEC that “each security’s market price will grow to at least the intrinsic value that existed” when Berkshire made the investments, the Wall Street Journal reported.
Berkshire previously announced the charge, but didn’t disclose what holdings it pertained to. The company said that all three stocks are long-term investments and each shows strong financials and favorable business prospects, Bloomberg News reported.
Berkshire did not write down losses on Dow component Kraft Foods (KFT), the largest U.S. food company, or Wells Fargo (WFC), the second-largest U.S. bank by market value, because it expects those stocks to bounce back. All the impacted stocks were part of Berkshire’s equity portfolio as of the end of 2010.
If you want to see how your performance stacks up against Buffet’s or just view some of his top holdings, visit tickerspy.com to see the firm’s latest disclosed holdings and a chart of their combined performance.
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