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Warren Buffett bets big on stocks

Marketplace Contributor Nov 7, 2011

Warren Buffett bets big on stocks

Marketplace Contributor Nov 7, 2011

Bob Moon: If there’s one thing billionaire investor Warren Buffett is known for, it’s not changing things up too often. He likes his steak every day from the same diner, and he famously invests for the long haul.

But in the latest earnings report we learned that his Berkshire Hathaway invested nearly $24 billion last quarter, the most in over a decade. When Buffett shakes things up, he can cause an avalanche of copycat investing. Solution: Just tuck some of those investments away from the public eye, with the blessing of regulators.

Our New York bureau chief Heidi Moore reports.

Heidi Moore: You ever get the feeling that someone’s watching you? Imagine you’re Warren Buffett.

Jeff Kern: Whose every move is watched. Every time he invests money, somebody thinks he must know something.

That’s Jeff Kern, a partner with the law firm Sheppard Mullin. Buffett controls the influential conglomerate Berkshire Hathaway. It owns stock in everything from insurance companies to railroads to Coca-Cola. Regulations require powerful money managers to disclose their investments. But the SEC can grant exceptions, says Paul Hastings partner David Hearth.

David Hearth: In my experience, it’s unusual.

Not so for Buffett, who doesn’t always like to show his full hand. He has a good track record of getting privacy, says University of Maryland professor David Kass.

David Kass: This is not unusual. It’s at least 50 percent of the time. And this has been going on for years.

Buffett often buys and sells big blocks of stock that could move the markets, says Kass.

Kass: He may be getting special treatment largely because there are probably thousands of investors who would follow along and just make similar purchases or sales.

Michael Yoshikami, a portfolio manager, owns shares of Berkshire Hathaway. He says he uses Buffett’s public list of investments as a smell test to tell him if he’s on the right investing track.

Michael Yoshikami: I think it is a bit disheartening that even Berkshire Hathaway is at this point moving towards less transparency.

Berkshire Hathaway didn’t comment. Buffett has a new moneyman, Todd Combs, and a lot of investors want to know what he’s thinking.

In New York, I’m Heidi Moore for Marketplace.

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