Berkshire Hathaway Just Bought 54,000 More Shares in Amazon

I don’t think I need to remind you that Berkshire Hathaway, the giant among holding companies, knows how to make a profitable investment. But it might be surprising to hear that it only recently started investing in Amazon. After all, who wouldn’t want in on the money that Amazon is bringing?

It might’ve taken them so long because Warren Buffett usually stays far away from tech companies, even the giants. He prefers to stick to the basics…what he knows. Companies like Amazon and Google, while successful, could also be seen as too technical and too outside of Buffett’s expertise. In his own words, he prefers “simple businesses” and “If there’s lots of technology, we won’t understand it.” No wonder some of his largest holdings are in standard industries, such as Bank of America (11% of the portfolio) and Coca Cola (10% of the portfolio).

This is not to say that Berkshire Hathaway never invests in tech companies. They held IBM stock for about 7 years, only selling them off completely about a year ago. Even though they weren’t wildly successful with IBM, Buffett continued investing in tech, buying up Apple stocks. Even with their recent 9% drop, losing Berkshire about $4 billion, Apple still represents the largest holding in Berkshire’s portfolio…a staggering $50 billion holding makes it nearly a quarter of their portfolio.

Nevertheless, Berkshire has finally kicked up its investments in Amazon even more now. In fact, the company just bought 54,000 more shares in Amazon recently, bringing its total investment to about $1 billion. While that may sound like a lot, Berkshire owns about $200 billion in stock…so, only 0.5% is now represented by Amazon shares. But we should also look at the rate of pruchasing. Any big increase in investment is telling, and Berkshire’s recent purchase represents about 11% increase in their original stake in Amazon. That’s a lot.

So, keep an eye out on further activity from the Oracle of Omaha…for now, he’s trying to tell us something about Amazon shares, and a good investor will know how to listen.

-Investing Insider Magazine

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