Buffett sees Gap in market

Share guru: where Warren Buffett leads others follow

Billionaire investor Warren Buffett, whose stock market moves are watched closely by investors around the world, has bought eight million shares in US clothes retailer Gap.

Mr Buffet's investment house Berkshire Hathaway disclosed the $204m stake in the clothes retailer in a document filed with US share watchdog the Securities and Exchange Commission (SEC).

Earlier this year, Berkshire Hathaway lost a battle with SEC over the right to keep certain smaller investments private.

Shares in Gap jumped 3% to $24.42 on the New York Stock Exchange on Monday, following the news.

Fierce criticism

Mr Buffett's decision to ignore the dot.com boom in the face of fierce criticism from analysts has increased his reputation as a share guru.

His Berkshire Hathaway company holds about $38bn worth of stocks, including substantial holdings in some of America's biggest companies.

Mind the Gap: US retailer has been suffering sluggish sales

The SEC filing showed Berkshire held eight million shares in Gap at 14 February, representing a 0.9% share in the San Francisco-based clothes retailer.

Gap, which also includes Banana Republic and Old Navy stores in the US, has seen a slump in sales in recent months.

It has been targeted by anti-globalisation protesters, who accuse it of exploiting workers in the developing world.

Other investments

Two other Berkshire investments were also made public in the SEC filing.

Berkshire invested $3.45bn in the year ending 31 December in San Francisco-based bank giant Wells Fargo and $181m in electricity company GPU Inc of Morristown, New Jersey.

Mr Buffett's 4.9 million shares in GPU equals about 4% of that company, GPU spokesman Ned Raynolds said.

"He's a smart investor and we're glad he sees value in GPU stock," said Mr Raynolds.

GPU plans to merge with Ohio-based First Energy.

Mr Buffett has also invested heavily in MidAmerican Energy of Des Moines, Iowa.

Berkshire is primarily an insurance and reinsurance company but also acts as a vehicle for Mr Buffett's investments.

Berkshire's major stock holdings include 11% of American Express, 8% of Coca-Cola, 9% of Gillette and 18% of the Washington Post newspaper.