Flashing a little plastic can come in handy even if you're a billionaire.
So it is with Warren Buffett, whose Berkshire Hathaway (BRKA) spent $54 million in the first quarter buying shares of the No. 2 U.S. card payment-network operator, Mastercard (MA). The purchase could mark the Berkshire stock-buying debut of Todd Combs, the company's first new portfolio manager in years.
Berkshire bought 216,000 shares of Mastercard at an average price of around $252 apiece, the company said Monday in a Securities and Exchange Commission filing.
Buffett has made a mistake or two in the credit card business, as he noted in last year's annual report. He once tried to offer a Geico credit card in a debacle that cost Berkshire $50 million, all told.
But so far, so good on this wager: Mastercard shares, up 31% over the past year (see chart, right), closed at $279 Monday before advancing to $281 in after-hours trading. That means Berkshire is up almost $6 million on its modest Mastercard bet.
The market rally has lifted the value of the rest of the portfolio as well. Berkshire's listed stocks were valued $53.6 billion at March 31, the company said, up $1 billion from Dec. 31.
The Mastercard purchase is the only new stock that appears in the quarterly listing of Berkshire's holdings. None of the company's other stock positions, led by big stakes in giant companies such as Coca-Cola (KO) and Procter & Gamble (PG), changed materially between year-end and March 31.
That marks a change from the previous quarterly report, which showed numerous changes as Geico investment chief Lou Simpson sold shares ahead of his retirement.
Buffett watchers have been wondering when the influence of Berkshire's new portfolio manager, Combs, would start showing up in these quarterly reports. Monday's filing may offer a glimpse, but it offers few clues as to Combs' style. Those will have to come over time.
Color Warren Buffett more mystified than angry over David Sokol's career suicide.
Sokol's illicit trading and deceit in the months leading up to his departure last month were "inexplicable and inexcusable," Buffett told Berkshire Hathaway (BRKA) shareholders at Saturday's annual meeting.
But the billionaire investor expressed no hostility toward Sokol and no regrets for Berkshire's initial press release, which was widely criticized as failing to hold Sokol accountable for his sins. Buffett said he believes Berkshire acted properly MOREColin Barr - Apr 30, 2011 1:16 PM ET
Berkshire Hathaway's first-quarter profit tumbled 58% from a year ago, as the company took a $1.1 billion pretax hit on last month's earthquake in Japan.
Berkshire's (BRKA) net profit dropped to $1.5 billion from $3.6 billion a year ago, the company said Saturday at its annual shareholder meeting. CEO Warren Buffett said Berkshire took $1.7 billion in pretax losses in its big insurance business, as the company reserved for probable claims MOREColin Barr - Apr 30, 2011 10:47 AM ET
Few can match Warren Buffett as stock picker. But is he a sound judge of character?
It's surely not a question the billionaire Berkshire Hathaway (BRKA) CEO relishes nowadays – not a month after David Sokol (right), his longtime right hand man and presumed successor, was unmasked as a selfish, rule-bending creep.
But however unfair it may seem, the judgment question is one the 80-year-old Buffett won't be able to avoid this weekend. He and Berkshire Vice Chairman MOREColin Barr - Apr 29, 2011 5:48 AM ET
Clearing the air before the coming Buffettpalooza weekend, Berkshire Hathaway belatedly slapped the wrist of its wayward son.
A report from the company's audit committee said Wednesday that David Sokol broke company trading rules and lied to CEO Warren Buffett. Sokol is the longtime top executive who unexpectedly quit Berkshire (BRKA) last month amid questions about his trading in shares of a company Berkshire was acquiring.
The company's statement comes three days before its heavily attended annual MOREColin Barr - Apr 27, 2011 5:00 PM ET
Are the wheels coming off the Wells Fargo stagecoach?
Shares of Warren Buffett's favorite bank fell 4% Wednesday to its lowest level since December after Wells (WFC) posted a mediocre first quarter and dodged persistent questions about the eyebrow-raising departure of its longtime financial chief.
Wednesday's quarterly report is Wells' first since Howard Atkins announced his retirement Feb. 8. Wells' failure to fully explain his reasons for leaving continues to chafe investors.
CEO John MOREColin Barr - Apr 20, 2011 11:20 AM ET
Warren Buffett's Berkshire Hathaway took a nearly billion-dollar hit on its stock portfolio after regulators questioned the firm's accounting.
Berkshire (BRKA) wrote down the value of its holdings in three big companies by $938 million at the end of 2010, reflecting a two-year-long slump in their share prices. The company cut the value of its investments in reinsurer Swiss Re, drugmaker Sanofi (SNY) and regional bank U.S. Bancorp (USB).
But correspondence the Omaha-based MOREColin Barr - Mar 28, 2011 2:16 PM ET
Warren Buffett's Goldman gravy train has lurched to a halt.
Goldman Sachs (GS) said Friday it will pay Buffett's Berkshire Hathaway (BRKA) $5.6 billion to redeem the loan the investment bank took from Berkshire at the height of the financial crisis.
That's good news for Goldman, which paid Buffett's company more than $1 billion* in preferred stock dividends over two and a half years. It is bad news for Buffett, who will get a big check MOREColin Barr - Mar 18, 2011 3:23 PM ET
Warren Buffett's company could walk away richer even if the self-proclaimed elephant gunner doesn't bag his latest target.
Lubrizol (LZ), the Wickliffe, Ohio, industrial lubricants company that agreed Monday to sell itself to Berkshire Hathaway (BRKA) for $9 billion, said in a securities filing Tuesday that it would pay Berkshire a $200 million termination fee if it breaks up the merger for a rival bid.
The breakup fee amounts to 2.2% of the equity Berkshire MOREColin Barr - Mar 16, 2011 6:49 AM ET
Rajat Gupta's most famous betrayal wasn't his most lucrative, by a long shot.
Gupta will go down as the board member who sold out Goldman Sachs (GS) in 2008 as it reached for a lifebuoy thrown by Warren Buffett. By leaking the news of that $5 billion investment a day early, Gupta netted the Galleon hedge fund that traded on his inside information nearly $1 million, securities regulators say.
But Gupta's illicit MOREColin Barr - Mar 1, 2011 12:51 PM ET
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