There's good reason why Warren Buffett is a stock market legend. His investment conglomerate, Berkshire Hathaway (BRK.A -0.60%) (BRK.B -0.17%), boasts a $713 billion portfolio and more than 60 different businesses under its umbrella. In this episode of "The Rank" on Motley Fool Live, recorded on Feb. 28, Fool.com contributors Jason Hall, John Bromels, and Travis Hoium discuss two of their favorite, little-discussed Berkshire winners.
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Travis Hoium: Yeah. Gillette purchased $600 million of preferred stock. That was prior to 1990 because in 1991 that was converted into common stock. They ended up selling that to as part of the deal to sell Gillette to Procter & Gamble (PG 0.36%). In 2005, the company took a $5 billion paper profit. Basically a 10X return over that 15 years. That has now actually become the Duracell business, which sits under Berkshire Hathaway's subsidiaries. The interesting thing is Duracell is a huge business, like well-known batteries, but it is a small, fairly small portion of Berkshire's behemoth business, so it didn't even come up in the letter. [laughs] I think that's a telling piece about what has gone on with with all these acquisitions in the scale of Berkshire Hathaway's business overall. But I thought that was a very good acquisition in razor and razor blades. It's simple, but it made a lot of money.
Jason Hall: John.
John Bromels: Yes. I'm actually going with Moody's (MCO -1.84%), ticker MCO. As Travis was saying, a lot of Berkshire investments, Berkshire is so massive that they end up being very small portions of the portfolio, and so this is another one that wasn't even really mentioned at all in the shareholder letter. But I decided just to look at this in terms of numbers. Even though this is only just a little less than 3% of Berkshire's portfolio, Berkshire owns 13% of Moody's, the analytics corporation. I looked at it, though, in terms of what he paid, what Buffett paid for the stock, and what it's worth today. Aand so Buffett bought these shares, the first quarter he owned Moody's was Q1 of 2001, and paid an average price of $6.89 per share.
Hall: It's incredible.
Bromels: At the end of the last quarter, $390.58 per share.
Hoium: Not a bad little return.
Hall: That's pretty good, right?
Bromels: It's not bad. I mean, it's, only, what did I calculate that as, a 4,500% return?
