Warren Buffett is regarded as one of the greatest investors of all time, turning Berkshire Hathaway (NYSE: BRK.B) into a trillion-dollar empire by following a disciplined, long-term approach to investing.
While we can't say for certain what Buffett would buy if he were investing in ASX shares, we do know the types of businesses he prefers. These are companies with strong competitive advantages, reliable earnings, and high returns on capital.
If you're looking to invest $10,000 like Buffett on the ASX, here are three shares that could fit the bill.
CSL Ltd (ASX: CSL)
Buffett has long been a fan of investing in healthcare companies with strong competitive advantages. On the Australian share market, CSL fits this mould perfectly.
CSL is one of the world's largest biopharmaceutical companies, specialising in blood plasma therapies, vaccines, and treatments for rare diseases. It operates in an industry with high barriers to entry, meaning new competitors can't easily disrupt its market dominance.
The company has also demonstrated consistent earnings growth for decades, making it a classic Buffett-style investment. And while CSL shares have been under pressure recently due to some major headwinds, history suggests that long-term investors who buy during periods of weakness are often well rewarded.
Morgan Stanley certainly believes this will be the case. Last week, the broker put an overweight rating and $313.00 price target on its shares.
Wesfarmers Ltd (ASX: WES)
Warren Buffett loves investing in high-quality retail and consumer goods businesses, especially those with strong brands and reliable cash flows. Wesfarmers checks both boxes.
Wesfarmers owns some of Australia's most dominant retail brands, including Bunnings, Kmart, and Officeworks, giving it a significant economic moat. No matter what's happening in the economy, Australians will continue shopping at Bunnings for home improvement projects or Kmart for affordable goods.
In addition, the company has a long track record of strong returns on equity and disciplined capital allocation, which is another trait Buffett admires. Overall, with a diversified business model and a history of rewarding shareholders, Wesfarmers is an ASX share that could fit well in a Buffett-style portfolio.
Goldman Sachs is bullish on the company. It has a buy rating and $80.40 price target on its shares.
Macquarie Group Ltd (ASX: MQG)
Buffett has famously invested in a number of US financial giants. If he were looking at the ASX, he might take a serious look at Macquarie.
Macquarie isn't a traditional retail bank like Westpac Banking Corp (ASX: WBC) or Commonwealth Bank of Australia (ASX: CBA), it is a global investment powerhouse specialising in asset management, infrastructure investment, and advisory services.
What makes it a Buffett-style investment is its ability to generate high returns on capital, navigate different market conditions, and expand internationally.
The company has consistently grown earnings over time and has a long track record of paying increasing dividends, which Warren Buffett also likes.
The team at Morgan Stanley is also feeling bullish about this ASX share. Earlier this month, it put an overweight rating and $253.00 price target on its shares.
