Whale Watching: What Did Berkshire, Paulson Catch?

by Todd Shriber

In addition to quarterly income statements, this is also the time of year when 13F filings start flowing, which disclose what some of the biggest names on Wall Street were buying and selling in the previous quarter.

Not surprisingly, the 13F’s for noted hedge fund manager John Paulson’s Paulson & Co. and Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) are chock full of compelling highlights.

As for Paulson, he made a mint for his firm and investors by betting against the subprime mortgage mess, then he turned around and went long on many of the financial services sector’s worst offenders.

Paulson still likes big financials, just a tad less than he did previously. In the first quarter, Paulson’s hedge fund pared stakes in Bank of America (BAC) and Citigroup, respectively the largest and third-largest U.S. banks by assets, according to the firm’s 13F. Paulson & Co. also trimmed its holdings of Hartford Financial (HIG) and regional bank SunTrust (STI).

Paulson also took new positions in two companies involved in two of the first quarter’s most high-profile acquisitions. The firm held 12 million shares of coal miner Alpha Natural Resources (ANR) at the end of the quarter and 6 million shares of Lubrizol (LZ), the specialty chemicals company Berkshire announced in March it will acquire for $9 billion.

Speaking of Berkshire, the firm revealed just one new holding in its 13F, MasterCard (MA), Bloomberg reported. Curiously, the firm continues to trim its stake in ConocoPhillips (COP), the third-largest U.S. oil company. The firm sold 8,000 Conoco shares during the first quarter, the Associated Press reported to bring its stake in the oil giant to about 29.1 million shares.

What’s odd about Buffett and Conoco is that this trade is rarely, if ever, highlighted as one of his rare losers. As CNBC reports, Berkshire was once Conoco’s largest shareholder, with 84 million shares or 5.6% of the shares outstanding, back in 2008.

Given that many of those shares were purchased when oil was trading around its record high in 2008 and when Conoco itself was trading at levels that have yet to be seen again, it would seem this is a losing trade for someone that rarely has them. Good thing for Buffett that his holding period in a stock is often ”forever,” as he has said in the past.

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