Berkshire Hathaway Portfolio Companies: How to Invest Like Warren Buffett

Warren Buffett's investment philosophy is centered around buying and holding high-quality companies with strong competitive advantages. He's known for his long-term approach to investing, which has led to impressive returns for Berkshire Hathaway shareholders.

One of the key strategies Buffett uses is to invest in companies with strong financials and a proven track record of success. This approach is evident in Berkshire Hathaway's portfolio, which includes companies like Coca-Cola and American Express.

Buffett's focus on quality companies has led to a portfolio that is less volatile than the overall market. He's also known for his ability to find undervalued companies with strong potential for growth.

By investing in companies like Wells Fargo and The Washington Post, Buffett has demonstrated his ability to identify and capitalize on opportunities in a variety of industries.

Berkshire Hathaway's investment strategy is focused on value investing, which involves estimating a company's intrinsic value and using that number to set a maximum buy price.

Warren Buffett, the company's CEO, looks for proven business models, ironclad competitive advantages, and savvy leadership teams. He chooses reliable companies he can hold for the long term, in part because he doesn't believe it's possible to time the market.

Top Buffett stocks tend to be dividend growers, such as Coca-Cola, which has grown dividends for more than 50 years.

You have $1,000 to invest and want to make the most of it. You could simply invest $200 each into all five of these stocks.

Investing in Berkshire Hathaway alone is also a viable option. The key takeaway is that these five stocks are excellent long-term investments.

Divide your money among the two or three stocks you're most excited about, and you'll be on your way to a solid investment strategy.

Warren Buffett is a value investor who favors proven business models and savvy leadership teams. He chooses reliable companies he can hold for the long term, believing it's impossible to time the market.

Buffett's value approach involves estimating a company's intrinsic value and using that number to set a maximum buy price. This price incorporates a margin of safety to minimize downside risk and enhance upside potential.

In fact, Buffett might not want to pay more than 65% of a company's intrinsic value. For example, if he decides a company has a fair value of $100 per share, he might not want to pay more than $65 for it. The margin of safety is 35% in this case.

A good example of this approach is Berkshire Hathaway's investment in Apple stock. At the end of September, Apple was worth a whopping $69.9 billion in Berkshire Hathaway's portfolio.

Berkshire Hathaway's portfolio is a closely watched aspect of the company's operations. It's comprised of a diverse range of stocks, with a focus on the best ideas of its CEO, Warren Buffett.

One of the most notable aspects of Berkshire's portfolio is its concentration of assets. Nearly 75% of Berkshire's invested assets are tied up in just seven stocks. This includes companies like Apple, American Express, and Bank of America.

Warren Buffett's penchant for financial stocks is evident in the portfolio, with Bank of America being a significant holding. Berkshire has a 26% stake in the company, with over 266 million shares sold since mid-July. This is a worrisome trend, given Buffett's favorite sector to invest in.

Energy stocks are also playing a key role in Berkshire's portfolio, with Chevron and Occidental closing in on a 10% combined share of invested assets. Both companies are integrated energy operators, benefiting from their drilling operations.

Here's a breakdown of the top holdings in Berkshire's portfolio:

Berkshire's portfolio also includes a range of other stocks, with a focus on companies with strong financials and competitive advantages.

Warren Buffett started investing at 10 years old and took the helm at Berkshire Hathaway at 35. He has documented his time at Berkshire with annual letters to shareholders.

Buffett's strategy is surprisingly simple: Buy good companies at value prices and hold them indefinitely. This approach has allowed him to create outsized gains over time.

Between 1965 and 2023, Berkshire Hathaway grew at a compound annual rate of 19.8%, nearly double the S&P 500's 10.2%.

Warren Buffett started investing at just 10 years old, which shows that you don't have to be a kid to start learning about investing.

He took the helm at Berkshire Hathaway at 35 and turned it into a diversified holding company worth nearly $1 trillion today.

Buffett's annual letters to shareholders have become legendary, filled with wisdom and updates on Berkshire's performance.

He's known for comparing Berkshire's growth to the S&P 500, and the results are staggering: Berkshire grew at a compound annual rate of 19.8% between 1965 and 2023.

That's nearly double the S&P 500's 10.2% growth over the same period.

Buffett's strategy is simple: buy good companies at value prices and hold them indefinitely, letting compounding do the heavy lifting.

This approach has proven to be incredibly effective, with Berkshire's market value growth outpacing the S&P 500 over a remarkable 58-year period.

Warren Buffett oversees 20 other billion-dollar wagers at Berkshire Hathaway, aside from his biggest holdings.

These wagers range in value from $1 billion to as much as $9.8 billion.

Some of these positions are "indefinite" holdings for the Oracle of Omaha, as well as businesses that have really caught his attention.

Here are some of the notable holdings in this group:

The five Japanese trading houses that Buffett views as forever holdings are Mitsubishi, Itochu, Mitsui, Sumitomo, and Marubeni.

These companies have a diverse range of interests, including oil and gas, food production, mining, textiles, pharmaceuticals, chemicals, and more.

Buffett has a significant stake in Chubb, a property and casualty insurer, which he has been building up over time.

Chubb has strong premium pricing power and is taking advantage of higher Treasury yields to generate more interest income on its float.

Buffett's approach to investing is centered around buying good companies at value prices and holding them indefinitely.

He has a long history of success with this approach, with Berkshire Hathaway growing at a compound annual rate of 19.8% between 1965 and 2023.

Warren Buffett's stock picks are always worth taking a closer look at, and his Berkshire Hathaway portfolio companies are no exception. Bank of America, for instance, has a lot to gain from lower interest rates, which could boost its net interest margin and make it a beneficiary of looser regulation under the incoming Trump administration.

Ally Financial is another interesting pick, trading at a 12% discount to book value and with an average new auto loan yield of 10.5%. This could make it a solid investment opportunity, especially with management seeing room to add nearly 80 basis points to the net interest margin in the medium term.

Amazon.com is a household name, and its business has been growing impressively on both the e-commerce and cloud services sides of the company. With e-commerce representing only about 16% of U.S. retail sales and a cloud computing market expected to roughly triple in size by 2032, there's definitely room to grow.

Here are some key stats on Warren Buffett's top picks:

Berkshire Hathaway itself is also worth considering, with its collection of high-quality operating businesses trading for about 13 times trailing-12-month operating earnings.

Berkshire Hathaway has been quietly buying up stocks in the third quarter of 2024, and we're about to take a look at some of the most interesting additions to their portfolio.

Berkshire Hathaway initiated a stake in Domino's Pizza (DPZ) worth $549.4 million as of September 30, making it the company's seventh-largest shareholder.

The new stake in Domino's Pizza is a significant one, with Berkshire now owning 3.7% of DPZ's common shares outstanding.

In addition to Domino's Pizza, Berkshire Hathaway also initiated a stake in Pool (POOL) worth $152.2 million as of the end of Q3.

Berkshire Hathaway has been adding to its position in Sirius XM Holdings (SIRI), with the investment thought to be handled by Ted Weschler.

Here's a quick rundown of the stocks Berkshire Hathaway is buying:

Berkshire Hathaway's stake in Sirius XM Holdings now makes up 0.9% of their portfolio, further cementing their position as SIRI's largest shareholder.

Warren Buffett has been selling Apple stock, despite it being his favorite name. He now holds an even 300,000 shares in Apple.

Berkshire Hathaway's exposure to Bank of America has been greatly reduced. The company has cut its stake in Bank of America by 23% in the third quarter alone.

Bank of America is now Berkshire's third largest holding, with a weighting of almost 12% in the portfolio. This is down from almost 15% three months ago.

Berkshire Hathaway also cut its stake in Capital One Financial by 7%, selling a total of 719,052 shares. This has reduced Capital One Financial's weight in the portfolio to 0.5%.

Berkshire Hathaway essentially exited its stake in Ulta Beauty, a position it initiated earlier this year. The company sold off what remained of its stake in Floor & Decor Holdings, a stock it first bought in the third quarter of 2021.