Warren Buffett, the CEO of Berkshire Hathaway, is known for his impressive track record on Wall Street. Over nearly six decades, he has nearly doubled the annualized total return of the benchmark S&P 500. One of the key factors contributing to his success is concentration, with Berkshire Hathaway heavily investing in just a few key stocks.
As of August 16, 62% of Berkshire Hathaway’s $314 billion portfolio was invested in four unstoppable stocks:
1. **Apple**: With a value of $90.42 billion, Apple remains Berkshire’s top holding. Despite selling off a significant portion of their stake in Apple over the past few quarters, Buffett believes in the company’s potential, especially with its market-leading share repurchase program.
2. **American Express**: Valued at $38.2 billion, American Express is one of Buffett’s longest-tenured holdings. As a financial services company, it benefits from both payment processing fees and interest income, making it a solid investment choice.
3. **Bank of America**: With a value of $37.08 billion, Bank of America is another top holding in Berkshire’s portfolio. The bank’s sensitivity to changes in interest rates has made it a profitable investment, although Buffett and his team have been selling off shares recently.
4. **Coca-Cola**: Valued at $27.67 billion, Coca-Cola is Buffett’s longest continuously held investment. As a consumer staples company with a strong global presence, Coca-Cola’s products have consistent demand and exceptional pricing power.
These four stocks collectively account for 62% of Berkshire Hathaway’s invested assets, showcasing Buffett’s strategy of putting extra capital into his best ideas. While these stocks have been successful investments for Buffett, it’s important for individual investors to carefully consider their own investment strategies before following in his footsteps.