Around eighty percent of Warren Buffet's extensive $297 billion investment portfolio is allotted to these nine indomitable stocks, predicted to thrive in 2025.
In the early '70s, Berkshire Hathaway, led by the renowned investor Warren Buffett, held a humble annual shareholder meeting in an employee cafeteria. Fast forward to today, this event attracts a whopping 40,000 investors yearly, eager to listen to Buffett discussing the U.S. economy, the stock market, and his investing approach.
Buffett's flair for investment strategies has led Berkshire Hathaway's Class A shares to an astounding cumulative gain of over 5.47 million percent over six decades, making him a legend amongst investors. To catch a piece of this investment magic, understanding the secrets that lay within Berkshire Hathaway's 44-stock, $297 billion investment portfolio is essential.
Warren Buffett strongly advocates for portfolio concentration and placing sizeable bets on his top picks. Starting 2025, approximately 80% of this colossal portfolio is invested in just nine unstoppable stocks.
1. Apple (AAPL) - $73.5 billion (24.8%)
Buffett has sold over 615 million shares of this smartphone giant between 2023 and 2024, but it remains Berkshire's largest holding. Buffett's selling could be due to historically low corporate income tax rates, or the stock market's expensive value. Despite this, Apple's market-leading share repurchase program has significantly boosted its earnings per share (EPS).
2. American Express (AXP) - $45.8 billion (15.4%)
Credit-services provider American Express has been Berkshire's second-longest held stock since 1991 and is considered an "indefinite" holding. This powerful company has a unique model, generating fees from both merchants and cardholders. American Express also excels in attracting high-earning customers, ensuring steady growth during economic downturns.
3. Bank of America (BAC) - $34.8 billion (11.7%)
Despite recent sales, Bank of America remains Berkshire's third-largest holding. Buffett is drawn to bank stocks due to their ability to profit from the nonlinear nature of the economic cycle. Bank of America also benefits from its interest rate sensitivity, which helped boost its income during recent Fed rate hikes.
4. Coca-Cola (KO) - $24.3 billion (8.2%)
Coca-Cola, held by Berkshire since 1988, has a majority presence in every country but North Korea, Cuba, and Russia. Its global brand recognition, resilience, and customer love have earned it the top spot in 12 consecutive years on Kantar's "Brand Footprint" report.
5. Chevron (CVX) - $17.5 billion (5.9%)
Integrated oil and gas giant Chevron's addition to Berkshire's portfolio marks a shift towards energy stocks. Chevron's diversified business model makes it a stable investment, especially during volatile oil prices. Its capital-return program and hefty dividend yield have attracted Buffett's attention.
6. Occidental Petroleum (OXY) - $13.4 billion (4.5%)
Berkshire has increasingly purchased shares of Occidental Petroleum due to its high-margin drilling segment. While exposed to oil price volatility, Occidental thrives when the price rises, and when it falls, the company is less impacted than others.
7. Moody's (MCO) - $11.7 billion (3.9%)
This ratings agency has held a steady presence in Berkshire's portfolio since 2000, and it has been one of Buffett's most successful investments. Berkshire's gains from Moody's are considerable, even without dividends.
8. Kraft Heinz (KHC) - $9.8 billion (3.3%)
Kraft Heinz might be one of Berkshire's riskier investments. Despite its renowned consumer brand portfolio and high dividend yield, Kraft Heinz struggled to adapt to changing consumer habits, leading to volume decline and financial difficulties.
9. Chubb (CB) - $7.2 billion (2.4%)
Finally, Chubb is an insurance company that has captured Buffett's attention due to its boring-yet-reliable business model. Consistent premium increases help this company remain profitable, even during within-industry downturns. Chubb welcomes the Fed's historic rate hikes, which increase short-term Treasury yields.
Understanding these companies equips you to emulate Warren Buffett's investment philosophy and make educated decisions in your own investment journey.
- Investors interested in emulating Warren Buffett's investment philosophy might consider looking into Berkshire Hathaway's top holdings, such as American Express (AXP), which has been part of the portfolio since 1991 and continues to offer benefits due to its ability to generate fees from merchants and cardholders.
- Financing large-scale investments can often be cyclical, and Warren Buffett recognizes this. He tends to invest a significant portion of Berkshire Hathaway's portfolio in cyclical industries, such as banking, where companies like Bank of America, which is Berkshire's third-largest holding, can profit during periods of economic growth.
- While Berkshire Hathaway's Class A shares have consistently high returns, not all investments deliver immediate financial gains. For instance, Berkshire has held onto Coca-Cola shares since 1988, and while the company is a market leader with resilient brand recognition, it has faced challenges adapting to changing consumer habits.
- In a portfolio as vast as Berkshire Hathaway's, significant revenue can come from diverse sources. Financial institutions like Berkshire Hathaway's holding in Moody's, a ratings agency, have provided steady returns and substantial gains for the company, which is why such investments are considered valuable.
