Monday, May 18, 2009

What Stock Would Buffett Put All His Wealth In?

What stock would Buffett put all his wealth in, if he had to choose just one? According to a recent Bloomberg report, which details his latest investment positions, it would Wells Fargo.

Banks that attract deposits at low rates were undervalued in the first quarter because investors wrongly believed that the entire industry was hobbled by risky bets and reckless lending, Buffett said at Berkshire’s annual meeting earlier this month. The KBW Bank Index fell 37 percent in the first quarter.

“All banks aren’t alike by a long shot, and in our view Wells Fargo, among the large banks, has some advantages the others do not.”

Before you get all excited, and rush to buy Wells Fargo at once, it has to be pointed out that he was speaking about buying the bank at a certain price--namely it's recent low of around nine dollars a share.

The Bloomberg article goes on to point out a few interesting things. For example, the amount Berkshire has invested in equities is the lowest it has been since 2005 (no doubt influenced, however, by the lower value of shares owned).

Also, Buffett took losses in ConocoPhilips, United Health and Carmax, adding to positions in Union Pacific, Nalco Holding, and (not surprisingly perhaps) Wells Fargo--the bank whose stock he said he would go all-in on at nine dollars.

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