Billionaire Buffett adds Gap to his portfolio

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OMAHA, Neb. — Billionaire investor Warren Buffett jokes that he can make a tailored suit look bad, but he apparently likes the looks of trendy clothing company Gap Inc.

A filing with the Securities and Exchange Commission released yesterday showed Buffett's Berkshire Hathaway Inc. has spent $204 million on 8 million shares of the San Francisco-based clothing retailer, which also markets clothes under the Banana Republic and Old Navy brand names.

As technology stocks tumbled last year, Berkshire bought up retail and energy shares.

The filings give insight into Buffett, the world's fourth-richest man according to last year's Forbes magazine ranking, and known for his record of successful investing.

In addition to Gap, Berkshire reported owning about 5.4 percent of the outstanding shares of Costco Wholesale Corp., with a market value of $872 million.

Charles Munger, Berkshire's vice chairman, has served on Costco's board since January 1997 and also shops at the wholesale stores, said Richard Galanti, chief financial officer at the Issaquah, Wash.,-based retailer.

Berkshire bought most of the Costco stock during the second quarter of last year, according to the regulatory filing. That was when shares of Costco, the nation's largest wholesale-club retailer, fell 37 percent.

Munger "probably has as good a knowledge of Costco as anybody who lives," said Tony Russ, portfolio manager for Fairholme Capital Management LLC.

Berkshire also invested $3.45 billion last year in San Francisco-based Wells Fargo bank and $181 million in electricity company GPU Inc. of Morristown, N.J.