Based on his recent investments, it seems that Warren Buffet is incredibly optimistic about the U.S. economy. And while he has been investing at a breakneck pace, he has also been condemning the growing "income inequality" in the U.S.
“You’ve seen a period where the American workers have generally gone no place and where the really super rich as a group increased their incomes five-for-one in this rarified atmosphere,” he said in a recent Business Wire article.
Late Monday, Warren Buffett’s Berkshire Hathaway filed its third quarter 13-F form. The form provides investors with a glimpse at the holdings of Wall Street’s biggest funds. While investors do not know the trading strategy used by the big boys, the 13-F form can provide insight to how successful investors think (but keep in mind that this information is subject to change with the end of the third quarter).
Here’s what Berkshire Hathaway is doing with its money:
The most talked about new position is Warren Buffett’s stake in IBM (which is rare considering he generally avoids investing in tech companies). He now has a significant 5.4 percent stake in the blue chip giant at an average price of $170. Warren Buffett explained that IBM fits all of his principles. One such principle is the requirement for top-tier management (IBM recently announced that Virginia M. Rometty will succeed Sam Palmisano as chief executive).
Buffett revealed Berkshire accumulated the stake–about 64 million shares valued at $10.7 billion–from March to October. According to the 13-F, IBM is now Berkshire Hathaway’s second largest stock position.
With all this investing and buying, Buffett certainly must be confident in the U.S.’s ability to recover.
However, he still took the opportunity to comment on how he has been able to succeed while others failed, saying that “while there have been improvements in some areas of the economy, many others haven't fared so well,” writes the Huffington Post.
Winners, Buffett says, "include corporations, who have seen good equity returns, as well as the wealthiest American citizens."
Who isn't faring well? The American housing market and the average American.
"Through the tax code, there has been class warfare waged, and my class has won," Buffett told Business Wire CEO Cathy Baron Tamraz at a luncheon in honor of the company's 50th anniversary.
"It's been a rout."
Again, this shouldn't surprise anyone. Buffet has been on the forefront of criticizing what he calls an “increasing income inequality in the U.S.”
Recall that in August, Buffett decried the low tax rates for wealthy Americans in an op-ed for The New York Times.
He declared that the Obama administration should raise taxes on millionaire and billionaires and this led to President Obama dubbing the effort the "Buffett rule."
On the potential of having a tax named after him, Buffett said to Business Wire, “It was my childhood dream to have a tax named after me.”
However, instead of making a general donation to the U.S. Department of the Treasury Credit Accounting Branch (3700 East-West Highway, Room 622D
Hyattsville, MD 20782) because he's concerned about not paying enough, Buffett has been on a buying spree.
Berkshire Hathaway added smaller new positions in CVS, Intel, Visa, General Dynamics, and DirecTV.
In the third quarter, Buffett's company also added 9 million shares of Wells Fargo, 3 million shares of Dollar General, and 2.1 million shares of Verisk. Buffett has also stayed with Wells Fargo, despite the turmoil in the financial sector. As of the end of the third quarter, the bank is Berkshire Hathaway’s third largest portfolio position, with a holding value just over $9 billion.
Berkshire Hathaway also trimmed its positions in Kraft and Johnson & Johnson. Overall, the company held $59.1 billion in common stock at the end of the third quarter. This represents a nearly 13 percent increase from $52.4 billion in stock holdings at the end of the second quarter.
[Editor's note: portions of this article originally appeared on Wall St. Cheat Sheet.]