Sequoia Fund Inc., (SEQUX) 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. (BRK/A)
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 compiled
by Bloomberg.
“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. While the scale of Buffett’s $68 billion
stock portfolio forces him to buy mainly the largest companies,
Sequoia is
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