Every three months, the Securities and Exchange Commission (SEC) requires all large investors to file a statement of their holdings.
Berkshire Hathaway’s is usually the most widely anticipated as investors look for clues on Warren Buffett’s latest buys.
Studies have shown that following in Buffett’s footsteps can be profitable in the long-term. Individual investors don’t always read studies very closely. The most recent data seem to show that individual investors disagree with Buffett about the short-term outlook for stocks.
In the most recent SEC filing, Buffett showed more sells than buys. In fact, his sales totaled about $1 billion, making cash his latest acquisition.
Buffett has said that he likes to buy when no one else does, and indirectly, he is buying dollars now as other investors rush into stocks.
Buffett did make one significant purchase in the last quarter of the year. He added more than $200 million to his holdings of Well Fargo.
Mutual fund data compiled by the Investment Company Institute (ICI) show that as a group, individual investors were behaving exactly the opposite of Buffett.
They were busily decreasing cash in the fourth quarter of 2010. As Buffett raised a billion dollars, money market assets decreased by about $17 million.
At least some new savings were being added to the stock market in the fourth quarter. ICI data show that individuals added more than $1.3 billion to equity mutual funds.
Buffett has been wrong in the short-term but usually delivers over the long-term. Individual investors have a less enviable timing record, and the current picture offers a sharp contrast to consider.
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