Berkshire Hathaway (NYSE: BRK-A, BRK-B) and Appaloosa Management have large stakes in a struggling division of GMAC.
According to The New York Post, value investing legend Warren Buffett and 2009 hedge fund all-star David Tepper are among those to hold large debt positions in ResCap – a real estate financing division of struggling auto lender GMAC. ResCap has reportedly lost -$10 billion over the last three years, and $12.5 billion taxpayer dollars have helped keep its parent company in business. Close calls with insolvency haven’t scared the billionaire investors from another bet on the U.S. economy, and the investment theme has yielded both significant returns since the pullback.
Last week we covered David Tepper’s outstanding stock picking in 2009, which earned his investors a reported 120% return by the start of December and is set to net him a personal $2.5 billion. A look at Appaloosa’s largest holdings at the end of Q3 shows that the fund still held significant stakes in Citigroup (C), Bank of America (BAC), and Hartford Financial (HIG), all of which dipped to Armageddon pricing during the recession.
Tepper told The Wall Street Journal, “If you think the economy will be fine, as we do, then we’re going to do very well” – commenting on his appetite for highly rated commercial mortgage-backed securities.
Meanwhile, Buffett’s Berkshire Hathaway made what he called an “all-in wager on the economic future of the United States,” purchasing the remaining portion of railroad Burlington Northern Santa Fe (BNI) for $26 billion last month. Berkshire’s top end-of-Q3 holdings also include big stakes in a handful of other iconic American brands. Coca Cola (KO), Wells Fargo (WFC), and American Express (AXP) remain among Buffett’s favorites. Preferred shares of Goldman Sachs (GS), which Berkshire bought during the recession, were also among the holding company’s biggest positions as of the most recent regulatory filings.
It will be interesting to see how Tepper and Buffett perform throughout 2010. For a performance chart of their top 13F-reported holdings, and portfolio data from more than 3000 other Pros visit tickerspy.com.
Pro portfolio performance is based on institutions’ top-15 holdings as disclosed in quarter-end filings with the SEC. Pro performance does not take into account additional holdings beyond the top 15 nor does it include positions that are not required to be disclosed by the SEC. As such, Pro portfolio performance should be considered an approximation and not a precise record of how an institution has performed over time.
Tags: AXP, BAC, BNI, BRK-A, BRK-B, C, GS, HIG, KO, WFC
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