Even if you wanted to ignore Warren Buffett and his annual shareholders meeting, you couldn’t. My co-host Matt Nesto will be reporting from Omaha surrounded by 40,000 passionate, slightly crazed, Berkshire Hathaway shareholders and Buffett followers.
If you want an analysis of Berkshire Hathaway (BRK.A) or its avuncular chairman, we will be offering more in the next few days. In terms of analyzing Berkshire Hathaway itself, the fact that the company is an amalgamation of transportation, insurance, and Buffett magic, makes it notoriously difficult to value.
The most transparent parts of Berkshire, and the parts investors can decide to buy or sell every day the market is open, are the massive stakes Berkshire has in publicly traded companies. There’s a list of them in every one of Buffett’s must-read annual letters.
On page 16 of BRK.A’s 2011 annual report there are 14 publicly traded stocks listed. Breakout welcomed Simon Baker of Baker Ave Asset Management to run through the portfolio and give us his picks and pans.
Baker likes IBM’s positioning, but he actually prefers Computer Associates, calling it a “mini-IBM in that space.” Stepping out on the risk curve, Baker thinks the financial holdings are a decent bet—particularly Wells Fargo and American Express.
On the dark side, he’s avoiding Kraft (KFT), a company of which Berkshire owns 79 million shares. “From a technical perspective, it just looks awful,” Baker says. “It’s got weak relative strength, doesn’t have a lot of momentum, and it’s got a lot of short sellers in it.”
Baker is not one of those short-sellers, but he plans to “be Krafy” and hang out on the sidelines.
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