What Is In Warren Buffett’s Portfolio?

Warren Buffett celebrated his 92nd birthday in August of 2022. It was also his 81st year of trading stocks. Buffett spent his childhood watching his father’s work in financial services, and he was so fascinated that he launched his own financial career when he was 11 years old.

Buffett gained experience and grew his expertise for 25 years, then took a bolder approach to building his fortune. He purchased the Berkshire Hathaway textile company in 1965 and transitioned it out of the failing textile industry into a holding company of massive proportions.

Today, Berkshire Hathaway’s stock portfolio contains more than three dozen companies and is valued at roughly $109 billion. In addition to securities, Berkshire Hathaway is parent to 60+ subsidiaries ranging from Geico Insurance to Burlington Northern Santa Fe Railroad, putting the company’s total market cap at approximately $665 billion.

The success of these investments has been lucrative for Berkshire Hathaway shareholders and for Warren Buffett himself. Berkshire Hathaway Class A stock has returned approximately 62,600 percent since inception, and Warren Buffett’s net worth has grown to $108 billion, making him the sixth richest person in the world.

Investors at all levels of skill want to know how Warren Buffett has achieved his success. What is his investment strategy, and which stocks are in Berkshire Hathaway’s portfolio? Does he focus on particular industries? What do Warren Buffett stocks have in common?

The bad news is that Buffett doesn’t share his trades in real-time, so it’s not possible to follow along transaction by transaction. The good news is that he is generous with his advice. Buffett’s collection of annual letters to shareholders offers insight into his guiding principles and best practices, along with his analysis of past, present, and future economic conditions.

What Is Warren Buffett’s Investment Strategy?

Those new to Buffett’s investment strategy are often surprised by its simplicity. There are no complex products, obscure asset classes, or sophisticated concepts. In fact, the basics can be summed up in three Warren Buffett quotes:

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

In other words, there is no benefit to purchasing stock in a struggling company, even if share prices are bargain-basement low. Companies that perform poorly will continue to lose money, and their stock will likely bring losses – not gains.

Notice that Buffett doesn’t suggest paying more than a company’s intrinsic value, no matter how much stock might go up in the future. While he prefers undervalued stocks, the most he will pay is a fair price as determined by the company’s fundamentals.

Our favorite holding period is forever.

While “forever” might be a bit of an exaggeration, there is no doubt that Buffett is focused on the long term. Some of the most profitable Warren Buffett stocks have been in his portfolio for decades, and he has no plans to sell.

The most important quality for an investor is temperament, not intellect.

Finally, Buffett understands that quality companies continue to build value over time. Short-term changes in share price are inevitable, and savvy investors know they should ignore sudden highs and lows.

Of course, that’s easier said than done when the market is down, and that’s why temperament is critical to successful trading. Selling strong companies during a market downturn or buying overvalued stocks due to fear of missing out is a quick way to rack up losses – and to miss out on lucrative long-term growth.

What Are The Top 10 Berkshire Hathaway Stocks?

The stocks in Berkshire Hathaway’s portfolio span multiple industries, but the specific industries have shifted a bit over time. Until recently, financial services stocks ranked first in the total portfolio. Newly added tech stocks on top of Buffett’s large position in Apple have put tech in the lead at more than 40 percent.

Financial services companies are Buffett’s next largest concentration at around 30 percent of the total Berkshire Hathaway portfolio. Consumer staples stocks come in third with a share of just over 10 percent of the portfolio.

The top ten Warren Buffett stocks include:

It’s also interesting to consider which companies Warren Buffett has taken a particular interest in, as evidenced by the percentage of total shares Berkshire Hathaway owns.

For example, Berkshire Hathaway has a significant stake in Liberty Media and holds approximately 40 percent of Davita, a healthcare company. It also controls 20 percent or more of the following organizations:

  • Kraft Heinz – 26.6 percent

  • Occidental Petroleum – 21.4 percent

  • American Express – 20.3 percent

It has roughly ten percent of outstanding shares in nine other companies, including Bank of America and Coca-Cola, and its large investment in Apple is around six percent of the company’s total value.

That commitment demonstrates Buffett’s faith in the future of these companies, which is a strong indicator that the stocks are a buy.

What Do Warren Buffett Stocks Have In Common?

Warren Buffett doesn’t choose stocks based on how much press they are getting or whether they might develop new and exciting products at some point in the future. Instead, he evaluates each of the companies he buys against four criteria:

Does he understand the business?

He believes it is next to impossible to properly evaluate a business he doesn’t understand. More importantly, when new information comes to light, investors can make faster, more accurate decisions when they understand the business.

Are the company’s long-term economics favorable?

This comes down to two points. First, the company must deliver strong returns on invested capital. Second, the company must have a wide moat to protect those returns.

For example, companies like Coca-Cola can withstand the pressures of an economic downturn because of an unmatched global brand.

Does the company’s leadership have the skills and integrity necessary to deliver success over time?

Bad management can sink an otherwise strong company, as evidenced by the recent Disney debacle.

Retired CEO Bob Iger returned to the role within a year after his original successor was unable to navigate the challenges of the 2022 market. (Note: Berkshire Hathaway does not own Disney stock.)

Is the price tag sensible?

Buffett won’t pay more than a company is worth, regardless of its financial strength, competitive advantages, or anything else. When possible, he prefers undervalued companies – those whose stock price hasn’t caught up with their intrinsic value.

Many investors attempt to duplicate Warren Buffett’s stock picks because they think buying Berkshire Hathaway stock is out of reach. After all, it has a reputation for being the most expensive stock in the world. As of mid-December, Class A shares traded at more than $450,000 each.

However, there is another option for those interested in buying Berkshire Hathaway stock rather than collecting individual Warren Buffett stocks. Berkshire Hathaway has Class B shares currently trading around $300 each.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.