For Immediate Release
Chicago, IL – November 30, 2020 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
3 Top Lessons Learned from Buffett's 2020 Portfolio Moves
Welcome to Episode #214 of the Value Investor Podcast.
Market Edge From Zacks · 3 Top Lessons Learned from Buffett’s 2020 Portfolio Moves
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Recently, Warren Buffett’s Berkshire Hathaway filed its 13-F form for the third quarter which, under SEC regulation, must include the stocks it had bought and sold in the quarter.
This quarter’s 13-F had some surprises.
Berkshire reduced its position in the financials again, specifically the large banks, while taking 4 new positions in big cap pharmaceutical companies.
After selling out of its airline stocks earlier in the year, and with these recent moves, Buffett has remade the Berkshire portfolio as we head into 2021.
Should you do the same?
Three Top Lessons Learned from Buffett’s 2020 Portfolio Moves
1. If an industry or sector is heading into hard times, there’s nothing wrong with just getting out completely and redeploying into other industries. Berkshire did this at the start of the pandemic in the spring when he sold all of his airline stocks including Southwest (LUV).
The airline business is terrible right now and not expected to recover to pre-COVID levels for several years.
2. Don’t get overweight in one sector. A few years ago, Berkshire had 55% of the portfolio in financials. Since then, Buffett has been selling.
In the third quarter, he sold nearly all of the position in JPMorgan Chase (JPM) and most of the Wells Fargo (WFC) shares. Berkshire has owned Wells Fargo for almost 20 years. But businesses, and management, change.
Additionally, Apple (AAPL), Berkshire’s largest stock holding, continues to become a bigger chunk of the portfolio as the shares soar. Berkshire sold 3% of the position in the third quarter but it still makes up 47.8% of the portfolio. Be careful allowing any single stock to become too dominant in a portfolio. Even Apple.
3. There are still classic value stocks out there to buy even as stocks hit new highs. Why not rotate money into those?
Berkshire jumped into 4 big cap drug makers in the third quarter, including AbbVie (ABBV) which recently merged with Botox maker Allergan. It’s cheap, with a forward P/E of just 9.9 and it’s yielding a juicy 5% dividend.
What else do you need to know about adopting Buffett’s portfolio moves to suit your own portfolio?
Find out on this week’s podcast.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Southwest Airlines Co. (LUV) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Wells Fargo & Company (WFC) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research