Warren Buffett.
Do I have your attention yet?
Warren Buffett – CEO of Berkshire Hathaway, aka the Oracle of Omaha – has amassed a fortune in excess of US$100 billion through his investing acumen.
One of the reasons that investors' ears perk up at the mention of his name is that his investing strategies are surprisingly straightforward. With time and patience, anyone can follow in the Oracle's path.
As a value investor, he likes to buy into quality companies he understands at a fair price. And ones with strong barriers to entry, or 'moats', to ward off any would-be competitors.
He's also well-known for his long-term investing strategies, looking to own companies for decades rather than a year or two. "Our favourite holding period is forever," he once noted.
And, together with his right-hand man and Berkshire Hathaway vice-chair Charlie Munger, Warren Buffett's investing strategies have proven highly profitable for investors.
According to Bloomberg, Berkshire's shares have delivered 9.5% compounded annual returns from 2000 through to the first quarter of 2023. That compares to a 6.5% return from the S&P 500 Index (SP: .INX).
Which brings us to the looming recession in the United States.
Investors fretting about a recession turn to Warren Buffett
Consensus is building that the US economy could slide into a recession within the next 12 months. Should the world's top economy shrink, the financial headwinds will be felt across the globe. Including here in Australia.
With recession fears building, investors are increasingly eyeing defensive stocks.
And with Warren Buffett's lengthy track record of successful value investing, the majority believe Berkshire Hathaway will continue to outperform the S&P 500 over the next five years.
The latest Bloomberg Markets Live Pulse survey asked investors "How will Berkshire's returns compare to the S&P 500 over the next five years?"
53% of professional and 54% of retail investors expect Berkshire will indeed beat the market over five years. Only 13% of professional and 8% of retail investors thought Berkshire will underperform US markets.
That's in line with what the survey respondents view as the best style of stocks to buy right now.
45% said now is the time to buy defensive stocks, with 20% favouring growth stocks and 17% tipping tech stocks.
Warren Buffett is well known for investing in more defensive stocks and for generally avoiding the tech sector.
Respondents were most united on the question of what will be his biggest legacy.
Their response?
"Buying stocks for less than what they are worth."
