Most investors know that the legendary Warren Buffett is considered one of the best investors of all time, if not the best. Most investors will also know that Buffett heads the famous investing conglomerate known as Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B).
After taking over Berkshire in the mid-1960s, Buffett transformed the textiles company into a diverse powerhouse, owning many businesses outright and with significant investments in many other public companies.
Buffett's love of his investments is also well known. He even likes to remind shareholders of his commitment to the Coca-Cola Co (NYSE: KO) by typically sporting a can or a bottle at Berkshire's annual general meeting every year.
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Berkshire Hathaway's massive portfolio
Berkshire owns stakes in more than 50 different publically-traded shares. But it might surprise investors to learn that almost 74% of Berkshire Hathaway's public investing portfolio is concentrated in just five companies. That's according to the company's latest 10Q filing, which is accurate as of 30 September.
Some famous names appear in Berkshire's list. There's Amazon.com Inc (NASDAQ: AMZN), Johnson & Johnson (NYSE: JNJ) and Visa Inc (NYSE: V). Buffett also owns chunks of Activision Blizzard Inc (NASDAQ: ATVI), Chinese electric vehicle manufacturer BYD Co Ltd and the relatively new-to-the-markets Snowflake Inc (NYSE: SNOW).
But none of these companies even come close to Buffett's top five holdings.
They are (from largest):
- Apple Inc (NASDAQ: AAPL)
- Bank of America Corp (NYSE: BAC)
- Chevron Corporation (NYSE: CVX)
- Coca-Cola Co
- American Express Inc (NYSE: AXP)
So what can we learn from this?
What can we learn from Warren Buffett?
Well, a few things to point out. Some of these holdings, namely Coca-Cola and AmEx, are old Buffett favourites. Buffett first bought Coca-Cola shares back in the 1980s. His investment in American Express goes back even further to the 1960s.
But others are far newer. Apple is by far Berkshire's largest investment. The company has more than US$128 billion worth of Apple shares, which carves out a whopping 39.7% of Buffett's entire public portfolio. Yet Buffett only began buying Apple shares back in 2016. His Chevron stake is even newer, with Berkshire picking up its first shares in the midst of COVID-ravaged 2020.
So Buffett is clearly an investor that holds onto his favourite shares through thick and thin. American Express is a company that has had many, many ups and downs since Buffett first bought in back in the '60s. Yet Buffett has always stayed the course. Ditto with Coca-Cola.
But he is also an investor who knows how to jump on a trend. Buffett clearly saw the post-COVID collapse in global oil prices as an incredible opportunity.
It only took him two years to build Chevron into Berkshire's third-largest position – one worth US$31.2 billion today. And Apple has gone from absent to Berkshire's largest holding in just a few years as well.
So Warren Buffett is clearly an investor who likes to hold his favourite shares forever. But he is also one that isn't afraid to jump on a trend or a new idea and quickly build it into a sizeable position.
Perhaps above all, Buffett's Berkshire portfolio shows that he is just fine with having 40% of his portfolio in his favourite company: Apple. There are more than a few lessons we mere mortals can take away today.
