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Why is J&J falling? Maybe because Buffett’s buying…

Sometimes stocks act irrationally, weird and the opposite way than one would expect. Sometimes the whole market does that as well. Especially these days. I am closely watching my holdings as everybody should do and I am also watching Johnson & Johnson (JNJ), since the price drops make me nervous even though I am repeating myself every day that those drops are insignificant, look for the whole picture, not just this crazy period.

Warren Buffett’s company has partially rebuilt the stake in Johnson & Johnson (JNJ) he reduced over the past two years to raise cash for other investments as per Associated Press. Berkshire detailed its $46.4 billion U.S. stock holdings Monday in a filing with the Securities and Exchange Commission. The document revealed several changes in the Omaha-based company’s portfolio between March 31 and the end of June, including decreases in Berkshire’s holdings in Kraft Foods, ConocoPhillips, Procter & Gamble and M&T Bank. Berkshire also increased its stakes in Becton Dickinson & Co., Nalco Holding Co. and Sanofi Aventis. But the biggest change came in Berkshire’s J&J stake, which grew to 41.3 million shares at the end of June. That’s up from 23.9 million shares in March. In 2008 and 2009, Buffett sold off some of Berkshire’s Johnson & Johnson stock to help pay for more attractive investments.

Berkshire held 64.3 million shares of New Brunswick, N.J.-based Johnson & Johnson at the end of 2007. Buffett, who is Berkshire’s CEO and chairman, has said he sold some stock in the drug and medical products maker in 2008 to free up capital for Buffett’s $14.5 billion fixed income investments in Goldman Sachs Group Inc. and General Electric Co.

Later in 2009, Buffett again sold some J&J stock to help raise cash for Berkshire’s $26.7 billion acquisition of the Burlington Northern Santa Fe railroad.

Well, since the Omaha Oracle is buying, one would expect the stock rising, which is not happening. For Buffett a great opportunity to buy cheap, for us an opportunity to do the same. Maybe on Tuesday we may see some north-moving.


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