Warren Buffett's 3 New Stocks for 2022!

Well, it's that time again. 13F season is upon us, which means we get to glimpse inside the buys themselves of the world's, uh, biggest and most successful investors. Today, we're kicking things off with the granddaddy himself, Mr. Warren Buffett.

So, the 13F filing for Berkshire Hathaway has just been released, just a couple of hours ago, and it's for the fourth quarter of 2021. Yes, I know it's a little annoying considering that period ended 45 days ago, but they're the rules. The big investors get a 45-day period where they can keep their trades to themselves before it becomes public information. But that period is now over!

So, let's look into the stock market moves that Warren Buffett himself made in Q4.

Berkshire Hathaway's stock portfolio grew quite substantially in the quarter without actually a huge amount of buying. Their portfolio is now worth a record 330.9 billion US dollars, and that's just the stock portfolio. Then, consider the fact that they own more physical infrastructure than any other company in America, and you can understand why Berkshire is the country's sixth largest company, full stop.

So, 330.9 billion dollars in stock, and unfortunately, we haven't seen Berkshire's full year results yet. But if we just look at the Q3 financials, they had 149.2 billion in cash or short-term treasury bonds, meaning they're probably currently sitting somewhere around 31 percent cash, which is definitely a lot. But it's also about the same cash percentage that Buffett has maintained for the past few years now, so no huge changes there.

It's also important to remember that Buffett himself has said in the past that around 20 billion dollars of that is untouchable, you know, in case of emergency money. So, in reality, the percentage of usable cash will be a little bit lower, but no doubt 30 cash is still very high.

We know why this is; the unfortunate reality is that Warren Buffett has been really struggling to find great investments to sink a lot of money into. This is because of two reasons. One, obviously, the market's very overvalued; prices are sky high. But also, two, Berkshire Hathaway doesn't really have that many options out there, full stop.

Remember, they like to take around about five percent ownership stakes in businesses, but they also want to sink 10 to 20 billion dollars into the market per investment. So, that means they're really looking for businesses with a market cap of 200 to 400 billion dollars minimum, so that their investment actually shifts the needle for them.

And there aren't that many businesses out there that are that size, so it's tough at the top. But anyway, lots of cash, and Buffett continues to accumulate as he searches for that next big investment. But now, let's have a look at what he actually bought and sold in Q4.

The Berkshire Hathaway portfolio went into Q4 with 43 stocks and ended it with 44. So, there were two stocks that Berkshire sold out of during the quarter and three that they bought into.

Starting with the cells, Berkshire sold out of Teva Pharmaceutical Industries and Sirius XM Holdings. The Teva Pharmaceutical sale isn't too surprising, as Buffett has been selling the pharmaceuticals quite a bit recently. This was a broader industry kind of bet, like the airlines, that he's now backing away from.

Last quarter, he sold out of Merck and he reduced quite a bit in AbbVie and Bristol-Myers Squibb, so there's kind of a trend there, and that trend did continue into Q4. But I didn't see the Sirius XM sale coming. That is America's big satellite radio provider, but I honestly do not follow this one at all, and it was only a 0.09 change to the Berkshire portfolio. So, this one would have been way, way, way down the list—very, very minor in the grand scheme of things.

But then, Berkshire also bought into three new positions. The first one being Liberty Media Corp Formula One Series C—so, tongue twister! I always get so confused when I look into Liberty Media because they're one company that has nine different stocks you can buy.

They break themselves up into three groups: there's the Sirius XM group, the Formula One group, and the Braves group. Each of these groups owns a different percentage of their various properties and also has three classes of shares. I mean, come on, guys, that is ridiculous!

So anyway, what Berkshire has done is they've just taken a position in the Formula One group, and they've bought the C class shares, which are non-voting shares. These shares represent small part ownership stakes in some of Liberty Media's many businesses, but really, it represents Formula One.

As we've seen over the past few years, Formula One has had an insane increase in viewership on the back of the Netflix series "Drive to Survive." That, plus the insanely close championship of 2021 and new regulation changes in 2022, have really just kickstarted a new golden era of Formula One, and clearly, Berkshire wants in on this.

However, it is worth noting this is a very, very small stake in the grand scheme of things. This occupies just 0.04 percent of the portfolio and is the 33rd largest position in their portfolio. Hang on, there are 44 stocks in Berkshire's portfolio and Formula One is the 33rd largest position—coincidence?

But yes, Formula One gets the Buffett nod! Then, moving on to the next buy, we have Activision Blizzard. What big granddaddy Buffett has been playing "Call of Duty" lately!

This is definitely an interesting one. Activision Blizzard is, of course, the big video game developer that owns titles like "Call of Duty," "Tony Hawk Pro Skater," "Crash Bandicoot," "Diablo," "Warcraft," "Overwatch," "Starcraft," and of course, "Candy Crush."

This one's been in the news a lot lately. Most recently, actually, Microsoft has said they intend to acquire the company for 69 billion. But before the big news, of course, the stock was getting hammered because, very sadly, there were confirmed reports of toxic corporate culture at the company where many of their female and some male workers were sexually harassed.

That ongoing saga sent the stock down about 45 percent from its February high to a 52-week low of 56.40, and at that price, clearly, it seemed cheap for the actual financial performance of the business. Thus, Berkshire added it to the portfolio. 0.29 of their portfolio sits at number 24.

Now, of course, Berkshire got in way before the news of a Microsoft acquisition. So, for Berkshire, this is actually already an insanely good investment because no matter when they bought it in Q4, they'd pretty much definitely be guaranteed to be up on their position. They could potentially be up as much as 42 percent in just a few short months.

So that's Activision Blizzard. Then, the third stock Berkshire added in Q4 was New Holdings, which is a Brazilian fintech company that provides a digital banking platform that offers customers products across spending, saving, investing, borrowing, and protecting. You can tell I just read that off a piece of paper, can't you?

I'm not going to lie, I don't know much about this one, but you know, although it is a neo bank, it's also the largest financial technology bank in Latin America, and Buffett does know a thing or two about banks. Overall, the position makes up 0.3 percent of the portfolio; it's worth about a billion dollars and it comes in at number 23 on the list.

So, that's all the new buyers. But to be perfectly frank, I don't actually think Buffett bought any of those companies because we have to remember that Buffett is only one of the three people that manages investments under the Berkshire Hathaway name. There's also Ted Weschler and Todd Combs, two guys that Buffett brought on and gave 10 billion dollars each to manage.

Let's be real, it's highly unlikely that Buffett is making any stock moves that are less than one percent of Berkshire's total portfolio. I think he's probably responsible for, say, the top 20 positions, and then the rest is probably Ted or Todd.

If we look at those top 20 positions, then there's not really a lot going on: Apple, Bank of America, American Express, Coca-Cola, Kraft Heinz, Moody's, Verizon, US Bancorp—all left untouched, and they make up 87 percent of Berkshire's portfolio.

So if you ask me what I think Buffett did in the quarter, I'd say he probably added 33 percent to Chevron. He reduced 0.61 in Kroger; he reduced 8.55 in Charter Communications, and he told his team to continue to sell down the pharmaceuticals, which resulted in a 79 percent reduction in AbbVie, a 76 percent reduction in Bristol-Myers Squibb, a 34 percent reduction in Royalty Pharma, and of course, the complete sellout of Teva Pharmaceutical.

That's what I think Buffett did this quarter, and I think the rest was probably Ted or Todd. It makes sense, right? Do you see Buffett buying into Formula One? Probably not. Do you see him playing Overwatch or firing up the latest COD? Probably not.

So, in all honesty, I think Buffett actually did very little in Q4, with only one significant change in the top 10 to 15 holdings; that being the 33 percent addition to Chevron. What might be more interesting, though, is seeing whether Buffett did any buying of Berkshire Hathaway stock during the quarter through, of course, share repurchases. But we'll have to wait until the end of the month to know that, as that's when Berkshire will be recording or reporting their Q4 numbers.

But anyway, guys, that was Berkshire's 13F filing for Q4 2021. Hope you enjoyed the video! Leave a like if you did enjoy it or if you found it useful. Subscribe if you're interested in learning more about value investing. Thanks very much to the Patreon supporters for helping fund the content on the channel. If you wanted to learn more about Warren Buffett's strategy and wanted a step-by-step walkthrough, then "Introduction to Stock Analysis" is always linked in the description.

But apart from that, guys, thank you very much for watching, and I'll see you all in the next video.