Warren Buffett is known for his long-term, even decades-long, investment strategy to maximize profits and reduce the impact of short-term stock price fluctuations. Most of the companies Buffett invests in are long-standing, valuable, and have a solid position in the industry they are involved in.
“If you’re not willing to own a stock for 10 years, don’t even think about owning it for 10 minutes,” he said. If you’re building your portfolio, investors can learn from Warren Buffett’s investing mindset and his favorite stocks.
Apple (AAPL) - Buffett's best investment
Berkshire Hathaway - Warren Buffett's investment company invested in Apple in 2016. The billionaire has repeatedly expressed his love for Apple's stock, although he once considered technology investments quite risky.
"I don't view Apple as just a stock, I view it as Berkshire's third-largest business," Buffett told CNBC, adding that Apple is the best company he knows in the world .
Warren Buffett rates Tim Cook (left) - CEO of Apple as one of the best leaders in the world. Photo source: Tim Cook's Twitter
By selling 10 million Apple shares in the final quarter of 2023, Berkshire still holds more than 905 million shares, worth about $174 billion. Even after this remarkable move, the value of Berkshire's Apple stake still far exceeds the value of Buffett's investment in Bank of America, the second-largest investment in the portfolio.
Applying current technologies, Ascuex allows investors to operate, open - close transactions and use different charts and indicators to track Apple stock investment opportunities regardless of market fluctuations.
Coca Cola (KO) - Buffett's longest-held stock
Besides technology and banking, retail consumption is also a long-term investment of Warren Buffett. Coca Cola is a typical example. The billionaire has invested in KO stock code since 1988 until now. With 35 years of investment, Berkshire is holding 24 billion USD in shares, equivalent to 9.2% of Coca Cola's outstanding shares on the market.
Buffett started buying Coca Cola shares after the company failed with its new product - New Coke. At that time, Wall Street experts were skeptical about Buffett's decision. Even Benjamin Graham - Buffett's mentor affirmed that he did not buy Coca Cola shares when viewed by traditional quantitative methods.
Going against the grain, Coca Cola was evaluated by the "Wolf of Wall Street" based on qualitative methods. Buffet did not pay much attention to market performance or stock prices, instead looking at the profitability of the company's own business operations. He saw great potential for this beverage company in the beverage retail market, which still had a lot of room at that time. In the retail industry, beverages are considered essential consumer goods with long-term investment prospects.
After many years of investment, Cola Cola shares are still a profitable investment for Buffett. Photo source: Bloomberg
The appeal of Coca Cola shares also lies in the company's development strategies. According to The Motley Fool , in 2022, Coca Cola has 1,500 new initiatives and is gradually focusing more on digital options and modern technology to improve products and services. In March 2023, Coca Cola "joined hands" with Bain & Company and Open AI to integrate artificial intelligence tools into its business and marketing strategies.
Bank of America (BAC) - second largest investment in the portfolio
This is one of Warren Buffett's billion-dollar deals. In August 2011, the billionaire suddenly announced a $5 billion investment in Bank of America. Currently, BAC is the second largest stock in Warren Buffett's portfolio.
It can be said that investing in Bank of America is a risky bet in the context of the US debt crisis in 2011. In his letter to shareholders, Buffett gave the reason for investing in Bank of America: " The head of the bank is nurturing a huge and attractive business that will last long after today's problems are forgotten."
Buffett initially invested $5 billion in preferred stock, which paid a 5% annual dividend. In addition, his investment company - Berkshire also received warrants to buy 700 million common shares of Bank of America at $7.14/share. According to Market Insider , Berkshire received $300 million from the preferred stock. And Warren Buffett received the "sweet fruit" - the time when the annual dividend from 700 million common shares was greater than the income from the preferred stock.
Similar to Coca Cola, Buffett also invested in Bank of America when the bank was in trouble. Photo source: CNN
In terms of the company itself, Bank of America is the second largest bank in the US and is highly sensitive to changes in interest rates. The tightening of monetary policy by the FED (Federal Reserve) will benefit Bank of America. In addition, the bank is considered an industry group that pays generous dividends. Currently, Warren Buffett is one of the largest shareholders of this bank, so the amount of money he "pockets" will not be small. As of the last quarter of 2023, the value of Warren Buffett's Bank of America shares is 27.2 billion USD.
Warren Buffett's portfolio can be a "guide" for investors, but make the right investment choices based on understanding the business and wise strategy. Through Ascuex, investors can easily access Warren Buffett's favorite stocks - Apple, Bank of America and Coca Cola. As soon as you register a trading account on Ascuex, investors are promoted with a 100% deposit bonus.
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