What Covestor managers are selling: Berkshire Hathaway (BRK.B, BIDU, NFLX)



Covestor model manager Yinglan Tan invests in the strong venture-backed equities with predictable earnings and long-term growth. He is the author of the book The Way of the VC – Top Venture Capitalists On Your Board and he is currently an Adjunct Professor living in Singapore.

For serious money, Yinglan believes that Asian venture-backed equities are solid investment vehicles to leverage on the growth opportunities in Asia. He holds on average 10 to 20 securities and will not likely put more than 20% into any one holding. His buying frequency is fairly low, preferring to patiently wait for attractive prices and then hold the security. He will also conduct a monthly evaluation for tactical opportunities, but typically will rebalance quarterly.

Tan manages Covestor’s Venture Capital Aggressive portfolio which

Invests in the top venture-backed equities with predictable earnings and long-term growth. Allocates a significant portion of its capital to a single trade.

Current top positions include the Nuveen Multi-Strategy Income and Growth Fund (NYSE: JPC), Baidu Inc (Nasdaq: BIDU) and Netflix (Nasdaq: NFLX). On 4/4, Tan closed his position in Berkshire Hathaway (BRK.B), which has become embroiled in controversy following the abrupt resignation of David Sokol. Here is Sokol’s appearance on CNBC following his resignation.

From the company’s press release announcing Sokol’s resignation:

Late in the day on March 28, I received a letter of resignation from Dave, delivered by his assistant. His reasons were as follows:

“As I have mentioned to you in the past, it is my goal to utilize the time remaining in my career to invest my family’s resources in such a way as to create enduring equity value and hopefully an enterprise which will provide opportunity for my descendents and funding for my philanthropic interests. I have no more detailed plan than this because my obligations from Berkshire Hathaway have been my first and only business priority.”

I had not asked for his resignation, and it came as a surprise to me. Twice before, most recently two or so years ago, Dave had talked to me of resigning. In each case he had given me the same reasons that he laid out in his Monday letter. Both times, I and other Board members persuaded him to stay. Berkshire is far more valuable today because we were successful in those efforts.

From The Wall Street Journal:

It nonetheless came as a “shock” to the Citigroup bankers when they learned Mr. Sokol bought roughly $240,000 of shares of Lubrizol Corp. a day after their meeting, sold them, and then purchased $10 million shares about two months before Berkshire’s $9 billion deal unveiled March 14 to acquire Lubrizol, according to people familiar with the matter.

The shares are valued at nearly $13 million now.

The Securities and Exchange Commission is investigating the events surrounding Mr. Sokol’s stock trading and the Lubrizol deal, a person familiar with the matter said.

Sources:

“Warren E. Buffett, CEO of Berkshire Hathaway, Announces the Resignation of David L. Sokol” Warren Buffett, Berkshire Hathaway, 3/30. http://finance.yahoo.com/news/Warren-E-Buffett-CEO-of-bw-1903759416.html?x=0&.v=1

“Mixed Signals Marked Sokol Meeting” Gina Chon, Serena Ng. Wall Street Journal, 4/2. http://online.wsj.com/article/SB10001424052748704530204576237170960624878.html?ru=yahoo&mod=yahoo_hs