Thursday, December 29, 2011

Cutting Buffett Helps Sequoia Fund

Sequoia Fund Inc., recommended by Warren Buffett when it opened, beat the U.S. stock market over the past four decades, in part because a large piece of the fund was invested in his company, Berkshire Hathaway Inc., reports Bloomberg. Heeding Buffett’s warning that Berkshire wouldn’t grow as fast as it once did, the managers of the $4.7 billion fund cut their reliance on the stock almost in half in 2010, and Sequoia is beating other value stock funds again this year, gaining 14 percent through Dec. 27, according to data compiled by Bloomberg.

Heeding Buffett’s warning that Berkshire wouldn’t grow as fast as it once did, the managers of the $4.7 billion fund cut their reliance on the stock almost in half in 2010 and put the cash into companies such as Valeant Pharmaceuticals International Inc. (VRX), a drug distributor. Sequoia is beating the pack again this year, gaining 14 percent through Dec. 27, better than 99 percent of value stock funds, according to data.

“They have the kind of portfolio Buffett might have if he ran a mutual fund,” Steven Roge, a portfolio manager with Bohemia, New York-based R.W. Roge & Co., said in a telephone interview. His firm, which oversees $200 million, holds shares in Sequoia.
Like Buffett, the managers of Sequoia look for high-quality companies with competitive advantages that the fund can hang onto for long periods….

Read more at http://www.bloomberg.com/news/2011-12-29/cutting-buffett-helps-sequoia-fund-top-value-investor-rankings.html

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