CNBC's Jim Cramer: Now's the Time to Bet on Buffett

Friday, 11 Apr 2014 07:28 AM

By Dan Weil

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After a New York Times story Sunday said that Berkshire Hathaway, led by Warren Buffett, underperformed the S&P 500 in four of the last five years, CNBC commentator Jim Cramer rushed to the investing legend's defense.

"Whenever I see an article that criticizes the stock holdings of Warren Buffett's Berkshire Hathaway, I know it's time to break out his portfolio and look it over for some terrific ideas," he said on his "Mad Money" show.

"Just when it starts to seem like Buffett may have lost his touch, that's when his bets really start to pay off."

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Cramer went through Berkshire's 10 largest U.S. stock holdings and had good things to say about all of them — Wells Fargo, Coca-Cola, American Express, IBM, Procter & Gamble, ExxonMobil, Wal-Mart, US Bancorp, DirecTV and DeVita HealthCare.

"I think anyone looking for 10 non-momentum, total-value ideas would be hard-pressed to find many better than this portfolio," Cramer said. "Warren Buffett: I'm a buyer, not a seller. I think this year his luck's about to change."

Greggory Warren, a stock analyst at Morningstar, sees both opportunities and constraints for Berkshire.

"While the firm is likely to continue to putting money to work in value-creating projects in the near to medium term, much as it has in the past, we think the huge sums of cash Berkshire generates and maintains on its balance sheet will ultimately limit its ability to produce outsize returns," he wrote on Morningstar.com.

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