Short Sellers Back Off Buffett & Berkshire Holdings (BRK-A, AXP, BNI, KO, COP, GE, KFT, PG, USB, JNJ, GS, MCO, WFC, WMT)

Everyone wants to know what the Oracle of Omaha is up to.  The great Berkshire Hathaway Inc. (NYSE: BRK-A) stock has proven to be far from immune to the woes of the market and was down 50% from its highs on Monday.  But what is interesting here is that short sellers have actually lightened up on their bets against many of Buffett’s major stock positions where Berkshire Hathaway had or has more than $1 billion worth of the stock.

Here are the stocks we eyeballed which Warren Buffett either invested over $1 billion or holds over $1 billion in.  This list may be incomplete as much of the exact data is never known on his true cost basis.  Here are the results:

STOCK (TICKER)                             Feb. 13              Jan. 30          Change
American Express Co. (AXP)  28,034,098     29,314,027    -4.4%
Burlington Northern (BNI)      8,127,597        8,575,298      -5.2%
The Coca-Cola Company (KO) 15,687,288     20,519,989     -23.6%
ConocoPhillips (COP)                 20,396,497     20,584,446    -0.9%
General Electric Co. (GE)         166,144,011    167,972,565   -1.1%
Kraft Foods Inc. (KFT)              23,539,806     24,753,773     -4.9%
Procter & Gamble Co. (PG)      30,063,903    30,287,280     -0.7%
U.S. Bancorp (USB)                     53,836,150     64,108,356     -16.0%

There are of course some increased short selling bets against some of the Buffett stocks.  But there are some exceptions as well.  On Johnson & Johnson (NYSE: JNJ), Buffett actually cut his stake by more than half, so an increased short selling here might not technically be against Buffett.  Also, his Goldman Sachs Group (NYSE: GS) stake is  not a common stock stake and pays him way above market interest rates.

Here are the gains in short selling in the Buffett stakes:

STOCK (TICKER)                                      Feb. 13            Jan. 30           Change
Johnson & Johnson (JNJ)                26,746,826   25,595,022      +4.5%
Goldman Sachs Group, Inc. (GS)   16,304,396   12,888,489      +26.5%
Moody’s Corporation (MCO)           28,386,043   27,859,036      +1.9%
Wells Fargo & Company (WFC)     124,486,523  111,677,537    +11.5%
Wal-Mart Stores, Inc. (WMT)          40,897,102   40,345,362     +1.4%

The decline in the short-selling at G.E. is noteworthy.  His common stock holdings are small, but he is a large investor in preferred shares that carry that 10% note.

As far as betting against Berkshire Hathaway stock, there is a divergence between the A-shares and B-shares short interest.  But very few actually “short sell” these stocks because of the price and liquidity.  From what we have gathered it seems that many shorts are actually “short against the box” where they effectively use the stock as collateral.  Berkshire’s shorts below:

STOCK (TICKER)                                     Feb. 13   Jan. 30     Change
Berkshire Hathaway Inc. (BRK-B)  88,809   96,384      -7.9%
Berkshire Hathaway Inc. (BRK-A)  2,907       2,765       +5.1%

As always, here is the list of Buffett’s full common stock holdings as of the end of the last quarter.

Jon C. Ogg
February 26, 2009