Rich Pickings: What Buffett, Paulson, Soros and a Tiger did next

feature-eye-of-the-tiger-200It’s Wall Street’s version of nature watching.

One of the great traditions of the US investment scene is the release of the 13F filings. Under US law, every investment fund with more than $100 million must release the details of the portfolio within 45 days of the end of each quarter.

Naturally, this select group – which includes Warren Buffet, George Soros, John Paulson, Carl Icahn and David Einhorn – releases their filings on the last day possible and generally all at the same time. No doubt they have a bit of a laugh at the way the market madly rushes to figure out which holdings they have increased, which they’ve dumped and which they’ve added.

But watching what the Whales of Wall Street have done in the last three months is great fun and a chance to try and pick up some broad trends from these investment gurus.

It’s not just individual stocks that are worth looking at. Often the themes within portfolios or themes across different portfolios are where the real gold is to be found. There’s a fair bit of reading between the lines to be done and of course the gurus themselves don’t explain their moves.

But let’s dive in and look at what the biggest names are doing, plus a few other insightful stock picks.

Buffett greases the new wheels

Warren Buffett’s quarterly stock moves are always the first to be scrutinised and there were a number of key changes noted this quarter.

Buffett reduced his position in a number of household names that have been mainstays of his portfolio, including United Parcel Service (better known as UPS), pharmaceutical groups Johnson & Johnson and Procter & Gamble (NYSE:PG),  Kraft Foods, Visa and General Electric.

He added to his holdings in IBM, Bank of New York, Viacom and the old Buffett favourite, Wells Fargo.

But the biggest news was generated by the addition of two oil companies: National Oilwell Varco and Phillips 66. These relatively small additions, and the notable sell-downs, have led many to speculate that Buffett is handing some control (and more capital) to the two young stockpickers he has appointed to his funds: Todd Combs and Ted Weschler.

The two oil stakes were bought by Todd and Ted. The handover is happening.

Paulson goes for gold again

Gold prices have been falling of late, but billionaire investor John Paulson never minds going against the crowd – he’s famous for making billions betting against the US property market in the year before the subprime bust sparked the GFC.

Paulson added to his stake in gold fund SPDR Gold Trust in the June quarter for the first time since 2009. And it was no small move either; his stake increased by more than 23% at a cost somewhere north of $600 million. He also raised his stakes in gold mining companies including NovaGold Resources and Allied Nevada and added another miner NovaCopper to his portfolio.

Paulson is coming off an ugly year in 2011, when some of his funds experienced record losses due to what many saw as a poorly-timed bet on a US economic recovery – he was a big investor in bank stocks last year.

The increased investment in gold could be a reflection of this pessimism. However, Paulson’s gold fund is also struggling; according to a recent investor update in early August obtained by Bloomberg, the fund has declined 23% this year.


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