Berkshire's common stock investments

Investments

Below we show our common stock investments that at year end had a market value of more than $1 billion.

12/31/09

Shares
Company
Percentage of Company Owned
Cost *
Market
(in millions)

151,610,700
American Express Company . . . . . . . . . . . . . . . . . . . . . . . .
12.7
$ 1,287
$ 6,143

225,000,000
BYD Company, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.9
232
1,986

200,000,000
The Coca-Cola Company . . . . . . . . . . . . . . . . . . . . . . . . . .
8.6
1,299
11,400

37,711,330
ConocoPhillips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.5
2,741
1,926

28,530,467
Johnson & Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.0
1,724
1,838

130,272,500
Kraft Foods Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.8
4,330
3,541

3,947,554
POSCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2
768
2,092

83,128,411
The Procter & Gamble Company . . . . . . . . . . . . . . . . . . . .
2.9
533
5,040

25,108,967
Sanofi-Aventis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.9
2,027
1,979

234,247,373
Tesco plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.0
1,367
1,620

76,633,426
U.S. Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.0
2,371
1,725

39,037,142
Wal-Mart Stores, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.0
1,893
2,087

334,235,585
Wells Fargo & Company . . . . . . . . . . . . . . . . . . . . . . . . . .
6.5
7,394
9,021

Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,680
8,636

Total Common Stocks Carried at Market . . . . . . . . . . . . . .
$34,646
$59,034

*This is our actual purchase price and also our tax basis; GAAP “cost” differs in a few cases because of write-ups or write-downs that have been required.

In addition, we own positions in non-traded securities of Dow Chemical, General Electric, Goldman Sachs, Swiss Re and Wrigley with an aggregate cost of $21.1 billion and a carrying value of $26.0 billion. We purchased these five positions in the last 18 months. Setting aside the significant equity potential they provide us, these holdings deliver us an aggregate of $2.1 billion annually in dividends and interest. Finally, we owned 76,777,029 shares (22.5%) of BNSF at year end, which we then carried at $85.78 per share, but which have subsequently been melded into our purchase of the entire company.

In 2009, our largest sales were in ConocoPhillips, Moody’s, Procter & Gamble and Johnson & Johnson(sales of the latter occurring after we had built our position earlier in the year). Charlie and I believe that all of these stocks will likely trade higher in the future. We made some sales early in 2009 to raise cash for our Dow and Swiss Re purchases and late in the year made other sales in anticipation of our BNSF purchase.

We told you last year that very unusual conditions then existed in the corporate and municipal bond markets and that these securities were ridiculously cheap relative to U.S. Treasuries. We backed this view with some purchases, but I should have done far more. Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.

We entered 2008 with $44.3 billion of cash-equivalents, and we have since retained operating earnings of $17 billion. Nevertheless, at year end 2009, our cash was down to $30.6 billion (with $8 billion earmarked for the BNSF acquisition). We’ve put a lot of money to work during the chaos of the last two years. It’s been an ideal period for investors: A climate of fear is their best friend. Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance. In the end, what counts in investing is what you pay for a business – through the purchase of a small piece of it in the stock market – and what that business earns in the succeeding decade or two.

http://www.berkshirehathaway.com/letters/2009ltr.pdf