"Tracking Warren Buffett’s Berkshire Hathaway Portfolio – Q1 2016 Update"
"Berkshire Hathaway's 13F stock portfolio decreased from $131.86B to $128.57B this quarter.Warren Buffett's largest three holdings are at ~52% of the entire portfolio.Berkshire Hathaway added Apple, dropped AT&T, and increased Phillips 66 and Liberty Global plc during the quarter.This article is part of a series that provides an ongoing analysis of the changes made to Berkshire Hathaway’s US stock portfolio on a quarterly basis. It is based on Warren Buffett’s regulatory  filed on 05/16/2016. Please visit our  article series for an idea on how his holdings have progressed over the years and  for the moves in Q4 2015.During Q1 2016, Berkshire Hathaway’s (BRK.A) (BRK.B) US long stock portfolio decreased 2.49% from $131.86B to $128.57B. The top-five positions account for over two-thirds of the portfolio: Kraft Heinz Co., Wells Fargo, Coca Cola, International Business Machines, and American Express. There are 44 individual stock positions many of which are minutely small compared to the overall size of the portfolio.() are a treasure trove of information and are a very good source for anyone starting out on individual investing.New stakes:Apple Inc. (AAPL): AAPL is 0.83% of the 13F portfolio stake established this quarter at prices between $93 and $110. The stock currently trades near the low end of that range at $93.88.Stake Disposals:AT&T Inc. (T): The original AT&T stake was acquired in Q3 2015 as a result of AT&T’s merger with DIRECTV that closed in July 2015. Berkshire held 31.35M shares of DIRECTV for which they received 59.32M shares (1:1.892 conversion ratio) of AT&T and $28.50 per share in cash. As a percentage of the portfolio, the position was relatively small at 1.22%. The DIRECTV stake was from Q3 2011 at a cost-basis in the low-40s. Last quarter saw a ~22% reduction at prices between $32.31 and $34.93 and the elimination this quarter was at prices between $33.51 and $39.45. Berkshire Hathaway harvested long-term gains from this position.Precision Castparts (PCP): The 0.74% of the portfolio PCP stake was built up over several quarters through Q1 2015. The bulk of the buying happened in the latter two quarters at prices between $200 and $241. On August 10th 2015, Berkshire Hathaway agreed to acquire PCP in a $235 per share cash deal and the transaction closed in January.Stake Increases:Liberty Media (LMCA) (LMCB) (LMCK): LMCA is a petite 0.89% stake first purchased in Q4 2011. It was increased by ~75% in Q1 2012 and roughly doubled the next quarter. Q2 2014 saw a ~24% stake reduction and since then had been kept steady. Last quarter saw the stake almost doubled at prices between $20 and $22.41 and that was followed with another ~29% increase this quarter at prices between $18.56 and $22.62. The stock is currently at $18.76.Note: On 4/15/2016, Liberty Media Corporation recapitalized its common stock into three tracking stocks, Liberty SiriusXM Group (LSXMA) (LSXMB) (LSXMK), Liberty Braves Group (BATRA) (BATRB) (BATRK) and Liberty Media Group (LMCA) (LMCB) (LMCK). Shareholders got 1 share of LSXMA/LSXMB/LSXMK, 0.25 shares of LMCA/LMCB/LMCK and 0.1 shares of BATRA/BATRB/BATRK for each share held. The prices quoted above for LMCA are adjusted for this transaction.Phillips 66 (PSX): The 2% of the US long portfolio PSX stake as of Q4 2013 was reduced to a 0.71% stake in Q1 2014. The reduction was due to a deal whereby Berkshire bought an operating business of PSX in exchange for ~19M shares of PSX stock. The position was further reduced by one-third the following quarter at prices between $76.69 and $86.33. Q1 2015 saw an about-turn: ~14% increase at prices between $59 and $80. Q2 2015 saw a ~300% increase at prices between $76.79 and $81.63 and that was followed with a stake doubling in the following quarter at prices between $70.55 and $84.32. This quarter also saw another ~23% increase in the high-70s price range. The stock currently trades at $78.68 which is very close to Berkshire’s overall cost-basis. The current position is fairly large at 5.09% of the portfolio (~14.4% of the business). For investors attempting to follow Berkshire Hathaway, PSX is a good option to consider for further research.Note 2: Berkshire avoided disclosing PSX stake in the original Q2 2015 13F by making use of the “”. An amendment filed on 9/4/2015 disclosed the huge stake build up.Liberty Global PLC (LBTYA) (LBTYK): The position was established in Q4 2013 at prices between $37.50 and $44.50 (adjusted for the 03/2014 stock-split) and increased significantly in the following two quarters at prices between $38.49 and $46. The stock is now at $37.59 and the stake is at 0.68% of the US long portfolio. Last three quarters have seen a combined ~30% increase at prices between $30 and $50.Bank of New York Mellon Corp (BK):  BK is a 0.60% of the US stock portfolio stake. The bulk of the original position was purchased in Q2 2012 at prices between $19.51 and $24.67. The stake was increased by 30% in Q2 2013 at prices between $26.70 and $30.55. The five quarters thru Q3 2015 had seen an about turn as there was a combined ~18% reduction at prices between $36 and $45. This quarter saw a ~4% increase. The stock currently trades at $39.74.Charter Communications (CHTR): CHTR is a 1.63% of the US long portfolio position. It was established in Q2 2014 at prices between $118 and $158 and more than doubled the following quarter at prices between $151 and $164. Q4 2014 saw a further ~25% increase at prices between $140 and $170. In Q2 2015, the position was again increased by ~42% at prices between $168 and $193 and that was followed with another ~21% increase the following quarter at prices between $167 and $195. The stock currently trades at $204 compared to Berkshire’s cost-basis of $161.06. They control ~9% of the business. This quarter saw a marginal increase.Deere & Company (DE): DE stake was first acquired in Q3 2012 when around 4M shares were purchased at prices between $75.11 and $82.70. The position remained steady until Q3 2014 when an additional ~3.6M shares were purchased at prices between $82 and $91.38 - Berkshire avoided disclosing DE stake in Q3 2014 by making use of the “”. In Q4 2014, the position was increased by another 125% at prices between $80 and $91. Last quarter also saw another ~34% increase at prices between $72.89 and $80.91. The stock currently trades at $83.63 which is very near Berkshire’s cost-basis of ~$80. The stake is at 1.39% of the portfolio and they control ~7.4% of the business. This quarter saw a very minor increase.International Business Machines (IBM): IBM is Buffett’s fourth-largest stake at 9.57% of the portfolio. The original position was purchased in Q3 2011 at prices between $157.54 and $185.21. Since then, the stake has gone up by almost 40% through periodic purchases. The stock currently trades at $149. Berkshire’s cost-basis on IBM is at around $170. Buffett is very bullish on IBM and controls 8.5% of the business. For investors attempting to follow Buffett, IBM is a very good option to consider for further research.Note: Berkshire Hathaway’s  had the following regarding the IBM investment: “Unrealized losses at March 31, 2016 included approximately $1.5 billion related to our investment in IBM common stock, which represented 11% of our cost. IBM continues to be profitable and generate significant cash flows. We currently do not intend to dispose of our IBM common stock and we expect that the fair value of this investment will recover and ultimately exceed our cost.”Visa Inc. (V): Visa is a very small 0.61% of the portfolio stake. The position saw a minor increase this quarter.Stake Decreases:Wal-Mart Stores (WMT):  WMT stake was first purchased in 2005. It has since been built up to a 2.61% position. The last significant activity was a 17% increase in Q1 2014 at prices between $72.66 and $78.91. Q3 2015 saw a ~7% trimming at prices between $63.10 and $73.88. The stock currently trades at $66. Berkshire’s cost-basis is at around $56. This quarter saw a ~3% stake increase.Procter & Gamble (PG):  PG position is now minutely small at 0.02% of the 13F portfolio. The original stake was huge but was almost eliminated this quarter as a result of a deal with Procter & Gamble for Duracell: $4.2B in PG stock was exchanged for a recapitalized Duracell. The transaction closed on February 29, 2016.Wabco Holdings (WBC): The very small 0.27% position saw a ~3% trimming this quarter. As a percentage of the business, the stake is significant at ~6%.MasterCard Inc. (MA): MA is a very small 0.36% of the 13F portfolio stake. The position saw a ~6% reduction this quarter.Kept Steady:American Express (AXP) and Coca Cola (KO):  These are very large stakes that were kept steady during the last twelve quarters. Buffett has said these two positions will be held “permanently”. Berkshire’s cost-basis on AXP and KO are at around $8.49 and $3.25 respectively.Note: Per AR 2015, Coca-Cola ownership grew from 9.2% to 9.3% and American Express from 14.8% to 15.6% due to buybacks.DaVita Inc. (DVA):  DVA is a 2.20% of the US long portfolio position that was aggressively built-up over several quarters: the original stake was doubled in Q1 2012, increased by over 50% in Q2 2012, 24% in Q4 2012, and an additional 16% in Q1 2013. There has been marginal buying since. The bulk of the stake build-up happened at prices between $30 and $49. The stock currently trades at $77.07 compared to Berkshire’s overall cost-basis of $45.33. In May 2013, Berkshire’s Ted Weschler signed an accord with DVA, limiting open-market purchases to 25% of the company- the position is currently at 17.9% of the business.General Motors (GM):  GM is a 1.22% of the US long portfolio position that was first purchased in Q1 2012 at prices between $21 and $30. The stake was increased by 60% in Q2 2013 at prices between $27.53 and $35.03.  Q1 2014 saw a 25% reduction at prices between $34 and $41 and the following quarter saw an about-turn: ~10% increase at prices between $31.93 and $37.09. Q3 2014 saw another ~21% increase at prices between $31.94 and $37.97. There was another ~22% increase in Q3 2015 at prices between $27.28 and $33.33. The stock currently trades at $30.68.Goldman Sachs (GS): GS is a 1.34% of the US long portfolio stake established in Q4 2013. Berkshire Hathaway received $5B worth of warrants to buy GS stock during the financial crisis (October 2008) at a strike price of $115 (43.5M shares) that was to expire October 1, 2013. Buffett exercised the right before expiry to start this long position. Q3 2015 saw a ~13% reduction at prices between $172 and $213. It currently trades at $155.Kinder Morgan Inc. (KMI): KMI is a very small 0.37% of the 13F portfolio stake established last quarter at prices between $14.54 and $32.68. The stock currently trades at $17.22.Kraft Heinz Co. (KHC): KHC is currently the largest 13F stock position at 19.90% of the portfolio. Kraft Heinz started trading in July 2015 with Berkshire owning just over 325M shares (~27% of the business). The stake came about as a result of two transactions with 3G capital as partner: a $4.25B investment in 2013 for half of Heinz and a $5B investment for the acquisition of Kraft Foods Group earlier this year. All told, Berkshire’s cost-basis on KHC is just below $30 per share compared to the current price of $85.87.Moody’s Inc. (MCO):  MCO is a 1.85% of the US long portfolio stake. It is a very long-term position and Buffett’s cost basis is ~$10.  The stock currently trades at $94.77. Berkshire controls 11.5% of the business.Restaurant Brands International (QSR): QSR is a 0.25% of the US long portfolio position established in Q4 2014 at prices between $35 and $42. The stock currently trades at $40.25. It started trading in December 2014 following a merger/rename transaction between Tim Hortons and Burger King Worldwide. Berkshire’s stake in the business is ~4.2%.Suncor Energy (SU): SU is a small 0.65% of the US long portfolio position first purchased in Q2 2013 at prices between $27.40 and $32. 2014 saw a ~24% increase at prices between $27.74 and $43.08. Q3 2015 saw another roughly one-third increase at prices between $24.81 and $29.04. The stock currently trades at $27.13.Twenty First Century Fox (FOX) (FOXA): FOXA is a minutely small 0.19% of the US long portfolio stake established in Q4 2014 at prices between $31.77 and $39.01 and increased by ~31% the following quarter at prices between $32.80 and $38.40. Q3 2015 saw another ~44% increase at prices between $25.19 and $34.49. The stock currently trades at $28.93.US Bancorp (USB): USB, a 2.69% stake has been in the portfolio since 2006. The position was tripled during the 2007-2009 timeframe and since then was reduced by around 15% overall as of EOY 2012. In Q2 2013, ~17M shares were purchased at prices between $32.27 and $36.15. Q1 2015 saw a 4.57% increase at prices between $40.94 and $45.12 and that was followed with marginal increases in the following two quarters. Berkshire’s cost-basis on USB is ~$32 and the stock is now at $41.69. Buffett controls 4.7% of the business.USG Corporation (USG):  USG is a very long-term holding and there was a significant 21.39M share stake increase in Q4 2013 due to conversion of notes at $11.40 per share - Berkshire acquired the convertible notes during the financial crisis (2/2009) and USG opted to redeem them on 12/16/2013. Q2 2014 saw a ~11.5% stake increase at prices between $29.57 and $33.16. The stock currently trades at $28.24. Buffett controls around 27% of the business and his cost-basis is at around $19. For investors attempting to follow Berkshire, USG is a good option to consider for further research.Verisign Inc. (VRSN): VRSN was first purchased in Q4 2012 at prices between $34.15 and $49.48. The position was more than doubled in Q1 2013 at prices between $38 and $48 and another one-third the following quarter at prices between $44.39 and $49.27. Q1 & Q2 2014 also saw a combined ~17% increase at prices between $47 and $63. The stock currently trades at $85.15. The current position is at ~10% of the business.Note: A Form 4 regulatory filing on 5/3/2016 shows Berkshire owning 12.95M shares compared to 12.99M shares in the 13F - marginal reduction at ~$90 per share.Verizon Communications (VZ): VZ is a small 0.63% of the US long portfolio position established in Q1 2014 at prices between $46 and $49.30. It was increased by ~36% the following quarter at prices between $45.94 and $50.05. The stock currently trades just outside those ranges at $51.22.Wells Fargo & Co. (WFC):  WFC is Buffett’s second-largest stake at 18.04% of the US long portfolio. Q1 2015 saw a ~7M share stake increase at prices between $50.72 and $56.17. The previous significant activity was in Q2 2013: over 18M shares were purchased at the time at prices between $34.66 and $38.20. The stock currently trades at $48.26. Berkshire’s cost-basis is at ~$25.50. Last quarter saw a 2% increase at prices between $51 and $56.Note: Per a regulatory filing, Berkshire’s stake in WFC has crossed the 10% ownership threshold as a result of Wells Fargo’s buybacks.Axalta Coating Systems (AXTA): AXTA is a small 0.53% of the portfolio stake established in Q2 2015 at prices between $27.62 and $36.37 and increased by ~16% the following quarter at prices between $24.49 and $33.52. The stock currently trades at $28.68. Although the position relative to the size of the portfolio is small, it is very significant that Berkshire owns ~9.8% of the business. Last quarter saw a marginal increase. For investors attempting to follow Berkshire, AXTA is a good option to consider for further research.Costco Wholesale (COST), General Electric (GE), Graham Holdings (GHC), Johnson & Johnson (JNJ), Lee Enterprises (LEE), Liberty LiLAC Group (LILA) (LILAK), M&T Bank (MTB),  Media General (MEG), Mondelez International (MDLZ), NOW Inc. (DNOW), Sanofi (SNY), Torchmark Corporation (TMK), United Parcel Service (UPS), and Verisk Analytics (VRSK): These are very small positions (less than ~0.5% of the portfolio each) kept steady this quarter.Note 1: Although the relative size of the position is small, it should be noted that Berkshire controls ~2.7% of Media General.Note 2: Per the , Berkshire has a $1.9B position in Sanofi - so in addition to the 13F securities listed in the spreadsheet, Berkshire also owns Sanofi securities listed in Euronext Paris.The spreadsheet below highlights changes to Berkshire Hathaway’s US stock holdings in Q1 2016:Note: 13F HR/A, 13D/G/A, Form 3/4 since 8/14/2015: 9/9/2015 Form 4 shows PSX ownership at 61.49M shares. 9/4/2015 13FHR/A: Adds new entries for PSX. Include this in the next report. 8/28/2015 Form 3 & 4 Filing showed them owning 54.8M shares of Phillips 66 (PSX). Most probably, this was the one holding that was withheld in the 13F. Also, the reporting on this holding says the stake was reduced significantly in Q1 2014. This reduction was actually due to a deal whereby Berkshire bought an operating business of PSX in exchange for ~19M shares of PSX stock they held. Details here:  .Note: Berkshire has already doubled his investment in HNZ. See details at http://www.bloomberg.com/news/articles/2015-07-06/buffett-s-kraft-heinz-bet-valued-at-24-billion-in-debut and http://www.bloomberg.com/news/articles/2015-03-25/3g-capital-berkshire-to-buy-kraft-foods-merge-it-with-heinz. A 7/2/2015  shows them owning ~325M shares.Note: There was a note in the Q2 2015 13F (IT) that some confidential information is withheld. So, be on the look-out for a new holding for Q2 2015 in the next report.: Book Value increased from $146,963 to $149,735 per Class A share. Float also increased from $83.5B to $85.1B - $99.82 per Class B share - Buffett’s repurchase criterion is 120% of BV.11/14/2014: P&G Duracell deal with Berkshire Hathaway - .2/2016 - OFB Post - Berkshire Hathaway 2015 Annual Letter & Report - NotesThe Book Value (BV) of Berkshire Hathaway per  is $155,501 per BRK.A share or $103.67 per BRK.B share compared to $146,186 per BRK.A share or $97.46 per BRK.B share. The stock currently trades at $198,190 or 127% of BV - the premium over book value has gone down significantly over the last year as that percentage was at 151.25% ($221,180 share price) this time last year. Buffett’s repurchase criterion is 120% of BV or $186,601. The premium to book value has narrowed as the stock lost 12.5% over the last year compared to book value growth of 6.4%. Net earnings are at $14,656 per BRK.A share for a ttm-PE of 13.52. This is compared to a ttm-PE of 18.29 last year and 14.66 the year before.Historical Book Value (BV) and Market Value Growth:Book Value CAGR 1965-2015 is at 19.2% and for 2015 it is 6.4%.Market Value CAGR 1965-2015 is at 20.8% vs 9.7% for S&P 500. For 2015, it is (12.5%) vs 1.4% for S&P 500.Earnings per Share (EPS):$14,656 in 2015 vs $12,092 in 2014 vs $11,850 in 2013 and $8,977 in 2012 per BRK.A share.  21% YOY increase compared to 2% YOY last year and 32% the year before. The increases are attributable to impressive cash generation of its operating entities. It was also helped by realized investment gains (after tax) of $4,092 in 2015. PE is 13.52 including investment gains. This time last year, PE was at 18.29.  Roughly a third of Berkshire earnings are realized gains historically.Intrinsic Business Value:The two quantitative components of value:Per-share investments grew 8.3% to $159,794. The growth achieved is marginally lower compared to 8.4% in 2014. CAGR since 1970 is at 18.9% but was only 6.6% in the 2000-2010 time period: long-term growth is stunning but recent growth is lower, andPre-tax earnings from businesses other than investments increased 2.1% to $12,304. CAGR since 1970 is 23.7%. It is higher compared to 20.6% reported last year mainly because Berkshire changed reporting so as to include insurance earnings. Those businesses has become more predictable and profitable and hence the change. Earlier, the assumption was that underwriting businesses will breakeven over the long-term but Berkshire has done substantially better over the last two decades.The third is a measure of the efficacy with which retained earnings will be deployed in the future - the subjective component.Growing operating earnings is the main focus. Berkshire did a few deals recently whereby ownership stakes in businesses were exchanged for parts of operating businesses: Phillips 66 and Graham Holdings shares were exchanged in 2014 in tax-free transactions. Also, they have a contract with Procter and Gamble to acquire Duracell the same way. It is set to close on February 29, 2016. For 2016, contribution from this area should be substantially higher as Duracell & Precision Castparts will be included.Plans to continue building Berkshire’s per-share intrinsic value by:Focusing on increasing earning power at subsidiaries both organically and through bolt-on acquisitions,Growth of equity investments,Repurchasing when there is meaningful discount to intrinsic value,Making acquisitions while rarely issuing new shares.Non-insurance businesses:Earned $18.8B in 2015 compared to $17.5B in 2014 and $15.5B in 2013.“Powerhouse Five”: Berkshire Hathaway Energy (BHE - formerly MidAmerican Energy), BNSF, IMC (Iscar), Lubrizol, and Marmon - $13.1B of the 2015 earnings is from these five businesses. This is compared to $12.5B last year.Due to the addition of Precision Castparts, “Powerhouse Five” is set to become “Powerhouse Six” from 2016.For 2015, they contracted for 29 bolt-on acquisitions - $634 million in aggregate. Last year, they contracted for 31 bolt-on acquisitions - $7.8B in aggregate. Also, Duracell close is delayed - H2 2015 was the projection in the last AR. It is now expected to close on February 29, 2016.Berkshire Hathaway Energy (BHE) & BNSF Railway are capital intensive businesses with a huge amount of regulated assets partially funded by long-term debt. The debt coverage is very good (8:1 for BNSF currently). Even under worst-case assumptions about economic conditions, earnings should cover interest payments easily. Further, the 8:1 coverage ratio is based on EBIT rather than EBITDA. EBITDA to interest is the commonly used measure but that is flawed as it ignores the capital-intensive nature of the business.Manufacturing, service & retail operations: ROC at 18.4% after-tax on $25.6B of tangible assets. This is compared to 18.7% and $24B last year.Finance Products: 34,397 homes sold compared to ~31K last year - $12.8B mortgage portfolio down slightly from $13B last year. Mortgage originations by Clayton are pristine as they are incentivized to do so - they keep 100% of the originations and so losses are theirs - no securitizations at all. Also, they borrow short-term and lend long-term. This may be viewed as a recipe for disaster, as there is no hedge against the risk of short-term rates rising sharply. However, Berkshire has a natural hedge - they have $20B in cash-equivalents that earn short-term rates.Underwriting profit at the insurance businesses stood at $1.8B for 2015 compared to $2.7B for 2014.Van Tuyl Automotive named Berkshire Hathaway Automotive - consists of 81 auto dealerships in 10 states.3G Capital Partnerships:3G’s methods are diametrically opposite compared to Berkshire’s approach to investing in businesses: Berkshire lets acquired businesses operate on their own in a decentralized fashion (except capital allocation) and avoids mass layoffs. 3G’s methods on the other hand are focused on changing the business to reach optimum profitability quickly - it generally involves cost cuts and layoffs. However, the following commonality makes 3G a very good partner: 3G and Berkshire are both focused on buying, building, and holding businesses that satisfy basic needs and desires.Co-Managers:2015: Precision Castparts acquisition partly credited to Todd Combs. In their investment management roles, Todd Combs and Ted Weschler are each managing $9B each.2014: their roles were expanded to also include running businesses - they took over as Chairman of one business each - combined, those businesses are very small earning around $100M annually - Buffett’s way of developing a deep-bench!2013: Todd Combs and Ted Weschler invested $7B each and they outperformed Buffett in 2013.Long-term economic goal:Maximize average rate of gain in intrinsic business value on a per share basis. Preference is to own a diversified group of businesses with consistent above-average ROC and second choice is to own parts of such businesses (security ownership of Berkshire’s insurance subsidiaries).Look-through earnings relevance:“Undistributed earnings of our investees, in aggregate, have been fully as beneficial to Berkshire as if they had been distributed to us”. So,It is preferable to purchase $2 of earnings that are not reportable rather than $1 of reportable earnings for the same acquisition cost, andLook-through earnings realistically portray yearly gain from operations.“Big Four investments” (AXP, KO, IBM, WFC) - Berkshire’s share of their earnings was $4.7B - this is compared to the $1.8B dividends that is reported. But, since these are excellent businesses, the unreported $3B in earnings are as valuable as the $1.8B reported.Use of leverage:“We use debt sparingly and, when we do borrow, we attempt to structure our loans on a long-term fixed-rate basis”Selling businesses:No interest in selling good businesses Berkshire owns. Sub-par businesses are also not sold as long as they are able to generate at-least some cash and managers/labor relations are good. Capex decisions for the latter are made in a much more cautious fashion compared to the former - it is unlikely that sub-par businesses will see increased profitability with increased spending. Couple of excellent quotes in this regard:“The projections will be dazzling and the advocates sincere, but, in the end, major additional investment in a terrible industry usually is about as rewarding as struggling in quicksand.)”“Gin rummy managerial behavior (discard your least promising business at each turn) is not our style. We would rather have our overall results penalized a bit than engage in that kind of behavior.”BV growth vs S&P 500 Performance Comparison:While this comparison is shown in the first page of the Annual Letter, it has become less meaningful over time. The reasoning has to do with how Berkshire’s business structure has evolved: equity holdings tend to move with S&P 500 and that is now a much smaller portion of overall value. Also S&P 500 gains are reported at 100% while Berkshire’s realized gains get reported at 65% because of taxes.Also, there is another major shortcoming with this comparison: The carrying value of the businesses that are controlled by Berkshire is much more than their carrying value and so the BV far understates Berkshire’s Intrinsic Value (IV). But, IV by definition (discounted value of cash that can be taken out during the remaining lifetime) is an estimate and so is not quoted in any of the releases.Below is a YoY comparison of Berkshire Hathaway’s largest equity investments:AT&T, Charter Communications, and Phillips are new in the 2015 list as they have become large stakes. DirecTV is no longer in the list because of the AT&T acquisition. Munich RE and USG Corporation did not make the list as they are no longer in the top stakes. A regulatory filing in December 2015 showed Berkshire’s stake in Munich RE has dropped from 11.8% to 4.6% of the business.Below is a comparison of Berkshire Hathaway's asset distribution in the "Insurance and Other" area for the last three years:The equity exposure is at  ~52%. It is ~10% below the highs reached in 2013. On the other hand, cash has gone up by ~44% over that same period. It is probable that Berkshire would look to allocate some of that cash this year.Expects America to do well for the foreseeable future:It is incorrect to say that the next generation will not live as well as we do. The current 2% real growth in annual GDP should ensure over one-third increase in per-capita GDP growth over 25 years (assuming population growth remains steady at 0.8% and GDP growth also remains steady at 2%). As the country is starting from a high base of about $56,000 in per-capita GDP, the small 1.2% net increase per year still translates to a huge $19,000 increase in real GDP per capita or $76,000 gain for a family of four.() are a treasure trove of information and are a very good option for anyone starting out on individual investing. Two books that Warren Buffett recommended in this year’s letter follow:: My 40-year adventure with one of America's outstanding communications companies by Philip Beuth and K.C. Schulberg,: Words of Wisdom from the Partnership Letters of the World's Greatest Investor by Jeremy C. Miller.To learn more about how to profit from a strategy of cloning super-investors, check out our book .:Berkshire did a few deals whereby ownership stakes in businesses were exchanged for parts of operating businesses: Phillips 66 and Graham Holdings shares were exchanged in tax-free transactions. Also, they have a contract with Procter and Gamble to acquire Duracell the same way.Average cost-basis info: AXP - $8.49, KO - $3.25, DVA - $45.53, DE - $81.20, DTV - $59.06, GS - $57.42, IBM - $170.93, MCO - $10.05, Munich Re - $149.05, PG - $6.40, Sanofi - $77.63, USB - $31.30, USG - $19.27, WMT - $56.09, WFC - $24.55.Ownership stake increases due to buybacks: KO: 9.1% to 9.2%, AXP: 14.2% to 14.8%, WFC: 9.2% to 9.4%."