Banking, finance, and taxes
Warren Buffett Has a Secret Stock He's Hiding - Here's 3 Stocks That Could Be It
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Is there anything more intriguing than investing in a stock Warren Buffett has kept secret from the world?
Buffett’s Berkshire Hathaway (NYSE: BRK.B) continues to ask regulators not to disclose a holding that the Oracle of Omaha is accumulating in secret. Yet, even while asking regulators for secrecy, there are clues that have emerged as to which stock Buffett could be buying.
Let’s dive into the details and make a prediction about the stock Buffett’s loading up on in secret.
Every quarter Buffett’s Berkshire Hathaway must report its public company holdings. If we look at Berkshire’s most recently filings we find:
By the time we get outside Buffett’s top 10 holdings, his 11th largest holding (Kroger) is worth $2.8 billion.
This makes Buffett’s secret stock even more intriguing because he could be building a position that’s a top-10 holding. While Buffett can ask regulators not to disclose this holding while building a stake in it, there are other regulatory requirements that Buffett can’t avoid.
For example, we can still see the cost basis of Berkshire Hathway’s stocks divided into industries. And the cost basis for Buffett’s banks and insurance holdings jumped by $2.4 billion in the fourth quarter. It also jumped by $1.2 billion in the third quarter.
This makes it highly likely Buffett’s new secret stock is in the financial sector.
So, we have Buffett building a position of a stock and asking for confidentiality from regulators. More importantly, he could be building this secret stock into a top-10 position in Berkshire’s portfolio.
This could be very important news because of Buffett’s history asking for confidentiality on stocks he’s building. In 2020 Buffett asked for confidentiality as he built a position on another stock, which later was found to be Chevron (NYSE: CVX).
Flash forward to today and Chevron is Berkshire Hathaway’s 5th largest position and the company owns $18.9 billion in the stock.
The reason that Buffett asks for confidentiality is simple: if news got out which stock he’s buying the shares may take off, giving Berkshire a significantly less attractive price. So, you can see why it would be valuable buying shares in the company of whatever Buffett’s secret stock is before the name is revealed in a future 13-F filing.
I want to make clear: no one knows the identity of Buffett’s secret stock with certainty. There’s not enough information available to positively ID it. Yet, I will suggest a few names that are worthy of more research and fit the profile Buffett could be looking at.
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