AN OBSERVATION OF WARRANT BUFFITT'S INVESTMENT

Warren Buffett is one of the most successful investors in the world (Farrington 2015). His investment portfolio or Berkshire’s portfolio is closed observed and followed by investors (Stockpickr, 2016). This paper is an... [ view full abstract ]

Warren Buffett is one of the most successful investors in the world (Farrington 2015). His investment portfolio or Berkshire’s portfolio is closed observed and followed by investors (Stockpickr, 2016). This paper is an attempt to examine Berkshire’s investment portfolio. First, Berkshire’s stock holdings are evaluated using Alman’s Z-score (Altman, 1968), and a Welch’s T test examines the means of Z-score between 2 groups: Berkshire’s holdings and non-Berkshire’s holdings. Secondly, top-3 performers in 29 sectors are selected using Zhang’s method (Zhang & Kersey, 2015). Then we observe if any of Berkshire’s holdings are in top-3 category. The result indicated that (1) the Z-score mean of Berkshire group is higher than that of non-Berkshire group, and (2) 83% Berkshire’s holdings are in top-3 category.