A look at Combs' "longs"

????Some insight into Combs' investment thinking can be gained from a look at certain SEC filings made by Castle Point. Institutional investors, including hedge funds, are required every quarter to report their long holdings (though not their short positions) in what is called a 13F filing. A study that Fortune made of Castle Point's13Fs from the first that it filed, for Dec. 31, 2007, through its most recent, for June 30, 2010, shows Combs to have been an active trader with good instincts at one important juncture.

????All told, he had long positions in more than 80 different stocks in that 30-month period. A buy-and-hold man he was not: Among his stocks, only one stayed in the portfolio for the entire period. That was United America Indemnity, a Nasdaq insurance and reinsurance company registered in the Cayman Islands until recently and now renamed Global Indemnity (GBLI) and registered in Ireland. From the end of 2007 until the end of June this year, this company's stock fell by 58%.

????Given the corporate casualties of the past few years, the most conspicuous fact is that Combs ducked all of the most famous disasters. That is, his fund was not long at any time on AIG (AIG, Fortune 500), Lehman, Bear Stearns, Citigroup (C, Fortune 500), Washington Mutual, Countrywide, Fannie Mae (FNM, Fortune 500), or Freddie Mac (FRE, Fortune 500).

????Combs' avoidance of these train wrecks fits Buffett's belief, which he stated in his 2007 shareholder letter, that any person hired to manage Berkshire's investment must be "genetically programmed to recognize and avoid risk, including those never before encountered." (The emphasis is Buffett's.)

????Combs' holding of Berkshire Hathaway itself deserves special notice. Most Berkshire Hathaway shareholders do not trade the stock. Castle Point did, holding it briefly at two different times -- when the fund first started up in 2007 and again in the last two quarters of 2009.

????Berkshire was in fact part of a buildup in long positions that Combs undertook in the last three quarters of 2009 -- good timing considering that the market turned out to have bottomed on March 9.

????At the end of the second quarter this year (the last data available), Castle Point's 10 largest long positions were U.S. Bancorp (USB, Fortune 500), MasterCard (MA, Fortune 500), State Street (STT, Fortune 500), Western Union (WU, Fortune 500), CME Group (CME), Renaissance Re, Pennymac, Chubb, Starwood Property Trust, and Annaly Capital. The investments in these stocks totaled $159 million, which was 57% of the fund's total long position.

????Combs will not be moving to Omaha to do his Berkshire Hathaway work, but will instead operate out of Connecticut.

????As he joins Berkshire, another of its money managers -- Lou Simpson, who is 74 -- will be retiring after a long and distinguished career at the company.

????Disclosure: The author is a longtime friend of Warren Buffett and a shareholder of Berkshire Hathaway.