Buffett has revealed that in 2012, Combs and Weschler outperformed the S&P by “double-digit margins” and “left me in the dust as well,” and they “handily” beat the S&P, and Buffett’s own investments, the next year.
We’ll be looking at the annual report to see what happened with Berkshire’s record $157.2 billion in cash as of September 30. The general expectation is that it grew over the following three months, just as it has grown for five straight quarters.
With interest rates relatively high right now, all that cash is generating a lot of low-risk earnings, making many investors even more patient as Buffett continues to look for what he’s called an “elephant,” a major acquisition at a good price that can move the needle at Berkshire.
So far, it has been elusive, but money-manager James Armstrong tells The Wall Street Journal, “The fact that they’re willing to wait for an attractive bargain on a good stock or a good company is one of their strengths.”
Berkshire’s stock repurchases during the fourth quarter will also be a point of interest. It spent around $7 billion during the first three quarters.
And while it seems unlikely, it’s possible Buffett could reveal the “mystery stock” that Berkshire started buying in last year’s third quarter but has been keeping out of its SEC portfolio filings.
We will, however, be combing through the annual report to see if there are any clues like the third quarter increase in Berkshire’s cost basis for banks, insurance, and finance stocks that has fueled speculation Buffett’s target is in that sector.
Look for a special edition of Warren Buffett Watch with details tomorrow.
