This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

I feel like it's such a cliché to offer up Nvidia (NASDAQ: NVDA) as my favorite stock to buy right now. However, there are just too many great reasons anyone might consider it for their portfolio.

For starters, there's the company's past performance, which has featured torrid growth. The stock's average annual rate of growth over the past decade has been about 76%. (Over the past three years, it's been 146% -- plus, the stock is up 51% year to date as I write this.) The stock recently became the first to hit the $5 trillion mark, then dropped back below that mark. 

Of course, past performance in no way guarantees future performance, but Nvidia's future still looks quite promising. And remarkably, after all that torrid growth, its stock doesn't seem wildly overvalued by some metrics. Its recent forward-looking price-to-earnings ratio (P/E) of 31.5 is well below its five-year average of 38.5. Its price-to-sales ratio, though, recently 30.2, is well above the stock's five-year average of 23.8 -- and both those numbers are quite steep.

Why am I bullish? Once known as a gaming chip company, Nvidia is now heavily involved in the artificial intelligence (AI) boom and cranking out graphics processing units (GPUs) for data centers. CEO Jensen Huang recently said that the company has $500 billion worth of orders for its Blackwell and Rubin chips through 2026. To put that in context, Nvidia's total revenue over the past year is $165 billion.

Nvidia regularly outperforms expectations, showing that it can pivot as needed to capitalize on opportunities.

Yes, Nvidia's valuation can be viewed as overvalued or undervalued, depending on which numbers you look at and how bullish you are regarding the continued growth of AI and rising demand for data centers to power its uses. And the company does have competition -- some of its big tech customers are working on developing chips and software in-house -- but I still think that long-term investors can do well with Nvidia. It's my favorite stock to buy right now.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post My favorite stock to buy right now — and yes, of course it's Nvidia stock (NVDA) appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 5 ASX ETFs that could supercharge your portfolio
• How to invest in the AI Build-Out: Expert
• 3 fantastic ASX ETFs to buy this month
• Is this the best Vanguard ETF money can buy right now?
• Why now could be the time to buy these popular ASX ETFs

Selena Maranjian has positions in Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Meta Platforms (NASDAQ: META) is a company you're likely very familiar with. It's earth's biggest social media company, with more than 3.5 billion monthly active users worldwide (up 8% from a year earlier). For context, there are roughly 8.2 billion people on earth -- so that's about 42% of all humans. Those active users use one or more of Meta's "Family of Apps," which includes Facebook, Instagram, Messenger, and WhatsApp. 

That alone might be an excellent reason to want to invest in Meta Platforms, because when you serve so many people, if you can wring just a few dollars from each, via advertising revenue, sales of products, etc., you can make a lot of money. Indeed, Meta recently reported "Family Average Revenue per Person" of $14.46 for its third quarter, up from $12.29 a year ago and $10.93 the year before. Total revenue for Meta's third quarter was $51.2 billion, up 26% year over year.

But for me, the most incredible reason to invest in Meta Platforms is its growth potential, given its hefty recent investments in artificial intelligence (AI).

Not only have recent investments been significant, but they're projected to continue. Meta's CFO Susan Li recently noted that:

• "[We expect that] our progress on AI models and products will position us to capitalize on new revenue opportunities in the years to come." (This is a reminder that all the spending has a purpose. If Meta succeeds with its strategy, gains will far outstrip costs.)
• "[W]e expect to invest aggressively to meet these [AI] needs both by building our own infrastructure and contracting with third party cloud providers." (Meta is planning to spend tens of billions of dollars on data centers and on designing its own AI chips and hardware.)
• "We also anticipate total expenses will grow at a significantly faster percentage rate in 2026 than 2025." (This is the kind of comment scaring some investors.)
• "Employee compensation costs will be the second largest contributor to growth." (Many have noted how Meta has been hiring AI specialists with fat compensation deals.)

Interestingly, Meta Platforms' considerable spending on AI is a reason that the stock got punished recently, falling as much as 12% on Oct. 30 after the release of the third-quarter earnings report.

The stock's valuation has likely been another issue for many investors, as the share price more than doubled over the past two years and averaged annual gains of nearly 90% over the past three years. When a stock surges that much, it's not unreasonable to expect a pullback. Well, part of that pullback has happened, leaving shares more appealingly priced -- with a recent forward-looking price-to-earnings (P/E) ratio of 22 very close to the five-year average of 21.

If you find yourself intrigued by Meta Platforms, give it a closer look. Note that while the recent third-quarter report spooked some, it also offered some reassurance that the company is operating and growing well: Revenue increased by 26% year over year, and ad impressions grew by 14%, with ad pricing increasing by 10% on average as well. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 1 incredible reason to buy stock in Mark Zuckerberg's company, Meta Platforms (META), in November appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Why ASX investors dumped IVV ETF last month
• Is this the best Vanguard ETF money can buy right now?

Selena Maranjian has positions in Meta Platforms. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Meta Platforms. The Motley Fool Australia has recommended Meta Platforms. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

You know the "Magnificent Seven" stocks, right? They're Google parent Alphabet, Amazon, Apple, Facebook parent Meta Platforms (NASDAQ: META), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), and Tesla.

The companies are magnificent, in part, because of their rapid growth rates, and many investors who don't own them are likely wishing they did. Fortunately, if you're one of those folks, it's not too late to invest in some Magnificent Seven stocks.

Here's a look at three that are reasonably valued at recent levels.

Magnificent growth

One of the most magnificent things about these companies is how rapidly they've grown -- to enormous sizes. Check it out:

Data source: Morningstar.com, as of Oct. 16.

That's right, each of them was recently valued in the market at more than $1 trillion -- and, often, a lot more. Each of them has been growing at an average annual rate of more than 20% over the past decade, too.

Despite all this growth, the following members of the cohort seem reasonably valued.

1. Nvidia

Nvidia (NASDAQ: NVDA), a leading semiconductor company, might be the one stock out of the seven that you'd most like to own, given its recent torrid growth rate. (Remember though that past performance isn't a guarantee of future performance!) You might be happy to learn that it's one of the more reasonably priced stocks in the bunch, with a recent forward-looking price-to-earnings (P/E) ratio of 29, well below the five-year average of 39.

The company was once known for its gaming chips, but now it's not only a leader in graphics processing units (GPUs) for games, but also in chips for data centers. And data centers are booming, as much of our artificial intelligence (AI) activity runs through them. This all suggests that Nvidia has a lot more room to grow.

Don't buy into the stock before reading up on it, though, because it does have some competition, from the likes of Advanced Micro Devices and Broadcom.

2. Meta Platforms

Meta Platforms (NASDAQ: META) is the parent company of Facebook, and one of Facebook's most amazing features is its scope. Consider this: In a world that was recently home to 8.1 billion people, each of Meta Platforms' main platforms -- Facebook, Instagram, and WhatsApp -- recently boasted more than 3 billion active monthly users. Students of business might salivate at such numbers, because if Meta can monetize just a small fraction of them a little more than it already does -- such as by better targeting ads to consumers -- that will be some serious money.

Like most of the Magnificent Seven, Meta Platforms has been investing heavily in AI -- to the tune of tens of billions of dollars -- building data centers and custom AI hardware. For example, it's aiming to build its own AI accelerator chips, which would compete with those of Nvidia. Meanwhile, its digital advertising business is still generating gobs of cash. (Remember how powerful it can be to generate money from a massive user base.)

Meta's stock seems reasonably valued to somewhat overvalued, with a recent forward P/E ratio of 24 only a bit above the five-year average of 21. Your assessment of that valuation should take into account how confident you are in the company's ability to keep growing briskly.

3. Microsoft

Then there's Microsoft (NASDAQ: MSFT), home to the dominant Office 365 suite of applications, the Azure cloud computing platform, the Xbox gaming platform, the Windows operating system, and even LinkedIn, among many other things. Its Copilot virtual AI assistant is accessible in multiple Microsoft products, and the company hopes that millions of its Office 365 subscribers will pay up for the paid Copilot add-on.

The company is growing well, with fourth-quarter revenue up 18% year over year and net income up 22% -- and CEO Satya Nadella noting, "Cloud and AI is the driving force of business transformation across every industry and sector. ... We're innovating across the tech stack to help customers adapt and grow in this new era, and this year, Azure surpassed $75 billion in revenue, up 34 percent, driven by growth across all workloads."

Microsoft is a dividend-paying stock, too, with a recent dividend yield of 0.71%. That may not seem like much, but it's been growing briskly. The total annual dividend payout was recently $3.32 per share, up from $2.54 in 2022 and $1.89 in 2019. The company's stock is reasonably valued, as well, with a recent forward P/E of 33 a bit above the five-year average of 30.

Take a closer look at any of these companies that interest you. You may want to buy shares hand over fist -- or buy shares more gradually.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 3 "Magnificent Seven" stock(s) to buy hand over fist right now — including Nvidia (NVDA) stock appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 5 ASX ETFs that could supercharge your portfolio
• How to invest in the AI Build-Out: Expert
• Why ASX investors dumped IVV ETF last month
• 3 fantastic ASX ETFs to buy this month
• Is this the best Vanguard ETF money can buy right now?

Selena Maranjian has positions in Advanced Micro Devices, Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• Owning Berkshire Hathaway means owning a wide variety of businesses.

• Many of those businesses are recession-resistant, too.

• For long-term investors, the stock price is reasonable at recent levels.

When you survey the thousands of companies in the stock market, looking for an investment that might build your wealth over the long term, give some consideration to Warren Buffett's company, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B).

It has an amazing track record, as Buffett, in concert with his late business partner Charlie Munger, increased the value of the company by 5,500,000% (nearly 20% annually) over 60 years. In contrast, the S&P 500 index of 500 of America's biggest companies gained about 39,000% (10.4% annually, on average) -- which is still a solid performance.

Why invest in Berkshire now? Well, it's reasonably valued. Its recent forward-looking price-to-earnings (P/E) ratio of 23.6 is a bit above its five-year average of 21.0, and its price-to-sales ratio, recently 2.5, is a bit above the five-year average of 2.2. This suggests that Berkshire isn't a screaming buy right now, but the price is within reason for long-term investors.

If you invest in Berkshire, you'll get a lot for your money. You'll become a part-owner of scores of businesses owned by Berkshire, such as GEICO, Benjamin Moore, See's Candies, and the entire BNSF railroad. You'll have a stake in Berkshire's stock portfolio, too, with major positions in companies such as Apple, American Express, Coca-Cola, and Bank of America.

The company is simply built to last, with much of its value in resilient industries such as energy, insurance, and transportation. It's worth noting that Buffett, at age 95, will be stepping down from the CEO post at the end of the year, though he'll remain involved. He has long planned for this transition and has named longtime Berkshire executive Greg Abel to take the reins. He has two capable investing lieutenants as well.

Berkshire's future may be different from its past, but it still looks promising. If at some point Abel sees Berkshire with much more cash than it can use effectively, a dividend might even appear.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 1 Reason to Buy Warren Buffett's company, Berkshire Hathaway (BRK.B) appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Stagflation: How to position an ASX stock portfolio
• How to build massive wealth with ASX shares

American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Selena Maranjian has positions in Apple and Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple and Berkshire Hathaway. The Motley Fool Australia has recommended Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• Amazon is one of Earth's biggest employers.

• Interestingly, "Amazon" was not its original name.

• The company is home to a wide range of businesses.

No matter how well we may think we know a company, there are still likely to be things about it that can surprise -- or amuse -- us. For example, one of the two brothers who founded Domino's Pizza traded his share of the company to the other brother for a used Volkswagen Beetle.

Here's a look at Amazon (NASDAQ: AMZN) and some interesting things about it which you might not know.

1. Its logo has a message

Check out the Amazon logo, and you'll see an arrow under the word "Amazon." You might not think much of it, but upon closer inspection, you'll see that it's connecting the letters A and Z -- reflecting the fact that Amazon's sells everything from A to Z.

2. Its name wasn't always Amazon

When Amazon was founded in 1994, its name was Cadabra, as in abracadabra. It was soon decided that the name, while whimsical, was sometimes misheard as "cadaver." Founder Jeff Bezos started searching for a new name and wanted one that began with "A" -- so that it would appear early in lists -- and he settled on the name of the world's longest river.

3. It's a major employer

Many investors strongly favor companies with capital-light business models over capital-intensive ones -- such as airlines and railroads. Airbnb, for example, is quite capital-light, needing no stores, carrying no inventory, etc.

As an e-commerce giant, you might assume that Amazon is capital light, too, as, unlike Walmart, it doesn't have thousands of stores across the country. It's still a major employer, though, as it employs gobs of people in its distribution centers as well as drivers for deliveries.

As of the end of 2024, Amazon employed about 1,556,000 full-time and part-time employees -- which doesn't even include independent contractors and temporary workers. That's enough to make it the world's second-largest employer, per companiesmarketcap.com.

4. Its big numbers are really big

Consider this: While most companies sport market capitalizations in the millions or billions, Amazon is in elite company with a market cap in the trillions -- $2.45 trillion, recently. It's also one of the "Magnificent Seven" stocks, along with Apple, (Google parent) Alphabet, (Facebook parent) Meta Platforms, Microsoft, Nvidia, and Tesla.

The company rakes in some $650 billion annually -- and keeps about 10% of that as net profit. Numbers like that have really helped the company grow -- by an annual average rate of 32% since its initial public offering (IPO) in May 1997. That's enough to turn an investment of $10,000 into close to $26 million! If you'd bought just one share at the IPO, thanks to various stock splits, you'd now own 220 shares, and your initial $18 investment would be worth more than $50,000.

Meanwhile, founder Jeff Bezos was recently the third-richest person in the world, per Forbes -- with a net worth of about $244 billion.

5. Its brand name is very valuable

Various companies assess the value of global brands regularly, and per Brandirectory, Amazon is the fourth-most-valuable brand in the world, after Apple, Microsoft, and Google. Its brand value is listed as $356 billion.

6. It makes more on services than products

We tend to think of Amazon as a massive online retailer, which it certainly is. But it's also a major operator in the cloud computing realm, with its leading Amazon Web Services (AWS). In the company's first quarter, 59% of its revenue came from services. (It's worth noting that AWS's lead in market share has been shrinking recently.)

7. Amazon is much more than a marketplace and more than a cloud platform

Amazon is home to lots of different businesses and brands -- which recently included Whole Foods Market, shoe retailer Zappos.com, Goodreads, Twitch, Metro Goldwyn Mayer (MGM), and Audible. It also makes and sells devices under the Alexa, Kindle, Fire, Ring, and Blink names, and features a host of services under its Amazon Prime umbrella, including Prime Video and Prime Music.

Then there's One Medical, with which Amazon has expanded into healthcare (along with other operations such as PillPack), and Zoox, which is a self-driving vehicle start-up. Amazon also bought the Kiva Systems robotics company, and is using its robots in its distribution centers.

Amazon has plenty of cash on hand, so stay tuned for further investments and expansions.

These are just some of many fascinating things to know about Amazon. If you're thinking of investing in Amazon or are already a shareholder, it can be helpful to learn all you can about the company.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 7 things to know about Amazon — Some may surprise you appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• How to invest in the AI Build-Out: Expert
• Why ASX investors dumped IVV ETF last month

Selena Maranjian has positions in Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Airbnb, Alphabet, Amazon, Apple, Domino’s Pizza, Domino’s Pizza Enterprises, Meta Platforms, Microsoft, Nvidia, Tesla, and Walmart. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Volkswagen Ag and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Airbnb, Alphabet, Amazon, Apple, Domino’s Pizza Enterprises, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

I'm a big fan of Warren Buffett, and have been for many years. It's hard not to be a fan, considering what an amazing track record he has, increasing the value of his company, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), by 5,500,000% (nearly 20% annually) over 60 years. In contrast, the S&P 500 index of 500 of America's biggest companies gained about 39,000% (10.4% annually, on average).

Over many years, I've read up on Mr. Buffett and have soaked up much of his freely dispensed investing advice. I've attended a bunch of his annual meetings, too, listening to him and his longtime business partner, the late Charlie Munger, answer questions for many hours.

Here are seven ways that Warren Buffett has influenced or changed my investing approach.

1. I'm not a very active investor

When I go through my file folders of trade confirmation reports from my brokerages, I see something interesting: In my early investing years, there were lots of trade confirmations. I remember that in my newfound excitement over investing, my attention would flit from this seemingly compelling stock to that one, and I would often sell one in order to buy another.

Flash forward, and now there have been many years in which I placed five or fewer buy or sell orders. I've learned that jumping in and out of stocks is not a great approach -- especially in those earlier days, when brokerages charged, say, $25 per trade.

2. I try to be contrarian

Buffett is known in part for the many savvy and/or funny things he's said, and one of his most famous utterances is this: "Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful."

In other words, when the market has been soaring and is frothy, I try to restrain myself. When it has sunk or stalled, I look around for good values.

3. I pay attention to a stock's valuation

As I just noted, I pay attention to a stock's valuation -- not its price. Remember that a $3 stock can be wildly overvalued and due to fall, while a $500 stock could be a bargain. A stock's price by itself doesn't tell you much. You need to compare it to other numbers, such as the number of shares that exist, the revenue or earnings per share, and so on.

When it comes to valuing stocks, it pays to read up on how to do so and how to understand financial statements such as balance sheets and income statements.

Not everyone has the time or interest to get good at evaluating stocks, so do consider investing in easily available, low-fee index funds, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO). Even super investor Warren Buffett loves index funds. In his will, he has directed that most of the money he's leaving his wife is to go into a low-fee S&P 500 index fund. He even made a 10-year, million-dollar bet favoring index funds -- and won.

4. I seek wonderful companies -- and focus on the company, not the stock

Next, I have taken to heart the way Buffett looks at the company, not the stock. After all, each share of stock is actually a (small) share of ownership in a particular company, and if you're aiming to own it for a long time, as I generally am, it's best to get very familiar with the company.

Consider factors such as how much faith you have in management, what you see as the company's growth prospects, and its main risk factors. Look at its financial health -- such as debt vs. cash -- and its growth rates.

Buffett has noted, "I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will."

I also pay attention to dividends. As I'm getting older now, I'm trying to turn my portfolio into a cash-generating machine. Berkshire Hathaway, meanwhile, is now collecting many billions of dollars in dividends from its own investments.

5. I am willing to accept a fair price instead of a great price

Next, I keep in mind this Buffett nugget: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

So while I do consider how overvalued or undervalued (or perfectly valued) a stock seems to be, I'm willing to pay up a bit for stocks I'd really love to own. As an example, I have long wanted to own the recycling and trash collection giant Waste Management. It always seemed too expensive, though. But finally, a year or two ago, I just bought some shares -- at what seemed like a modest premium.

6. I try to respect my circle of competence

Like Buffett, I try to respect my circle of competence. For example,

Not respecting this circle of competence has burned me, such as when I bought small stakes in some marijuana companies some years ago. That was a multifaceted fail when it comes to investing like Buffett, because (a) I didn't know enough about the industry, (b) I hadn't properly assessed the stocks' valuations, and (c) I was following the crowd instead of being an opportunistic contrarian.

I'm also not a crypto investor, as I do not understand that very well.

7. I'm a patient long-term investor

Finally, I'm investing for the long haul. It was harder in my early investing days to believe that patience would pay off, but after several decades now, I see some amazing results. Some of my holdings have risen in value by more than 1,000%, and a few more than 5,000%.

If you buy stocks carefully, aiming to hang on for many years, you can eventually start seeing your money grow like gangbusters. It has happened to me -- and, to a great degree, thanks to lessons I've learned from Warren Buffett.

It's not always easy to be as calm and rational as Buffett, which is why so few people have approached his investing record. But learning from the master can only help us all be better wealth builders -- even if we just stick with solid index funds.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 7 ways Warren Buffett changed my investing approach appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Stagflation: How to position an ASX stock portfolio
• How to build massive wealth with ASX shares

Selena Maranjian has positions in Berkshire Hathaway and Waste Management. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway and Vanguard S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Waste Management. The Motley Fool Australia has recommended Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Warren Buffett is highly respected in the investment world for good reason: He has increased the value of his company, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), by an annual average of nearly 20% over close to 60 years. If that doesn't wow you, know that if you started with just $100 and it grew by 20% annually for 60 years, you'd end up with $5.6 million! (See? Impressive!)

Here are a bunch of interesting things about Buffett's company. See how many you didn't know, and then consider whether you might want to invest in Berkshire Hathaway.

1. Berkshire Hathaway is a massive company

The average American has probably not heard of Berkshire Hathaway, but it has grown to place fifth in the Fortune 500 list of big American companies, with its recent market value of $1.1 trillion. As of the end of 2024, Berkshire employed about 392,400 people across its many businesses -- but only 27 people at its corporate headquarters in Omaha, Nebraska.

2. Berkshire owns scores of companies outright

Many people don't really know exactly what business Berkshire Hathaway is in. Well, know that it often focuses on insurance, energy, and transportation. It also encompasses many businesses owned outright, such as GEICO, Benjamin Moore, Brooks, Duracell, Forest River, Fruit of the Loom, International Dairy Queen, Justin Brands, McLane, Pampered Chef, Pilot Travel Centers, See's Candies, and the entire BNSF railroad -- among dozens of others.

3. Berkshire owns stock in many companies, too

Not only does Berkshire Hathaway own lots of entire businesses, it's also invested in dozens more, by owning shares of stock. For example, it recently owned 2% of Apple (a position worth $75 billion!), 35.4% of Sirius XM, 28.2% of Occidental Petroleum, 21.6% of American Express, 9.3% of Coca-Cola, 8.9% of Bank of America, 6.9% of Kroger, and 6.7% of Chevron.

4. Berkshire will likely keep growing

Berkshire Hathaway's reports reveal that the company is sitting on a lot of cash. A lot. Recently, the total was $334 billion -- about a third of a trillion dollars. We can expect that when an attractive opportunity comes along, Buffett (and/or his investing lieutenants) will pounce on it. That may include buying more companies in their entirety or loading up on stocks. If we do enter a recession, with many companies struggling and many good stocks having slumped, there will be opportunities aplenty.

5. Berkshire's annual meetings are huge

A typical company's annual meeting might have a few dozen, or at most, a few hundred attendees. It might last for an hour or two, with management presenting results and answering a few questions. Berkshire's annual meeting draws tens of thousands of attendees, and it has, until recently, lasted for most of a day, with Buffett and other executives answering scores of questions for five hours or more. (Buffett's business partner, Charlie Munger, passed away in 2023 and Buffett is now 94 years old, so the meeting has recently been shortened a bit.)

6. Berkshire Hathaway's amazing growth enabled Buffett to be an amazing philanthropist

Warren Buffett owns the lion's share of Berkshire Hathaway, and if he'd never sold any shares and given money away, it's estimated that his worth would be more than $350 billion, enough to rank him as the richest or second-richest person in the world. But he's a generous guy, and over the years, he has donated more than half his shares. According to Forbes, "Buffett is likely the largest philanthropist of all time... donating more than $60 billion toward charitable causes in his lifetime."

7. Many smaller parts of Berkshire Hathaway are quite big

Check out these eye-opening nuggets of information from Berkshire:

• "... 52% of our owned and contracted generating capacity [comes] from renewable and noncarbon sources such as wind, water, solar and geothermal."
• "... [W]e are No. 1 in the nation in ownership of wind-powered electric generation among rate-regulated utilities."
• "Topaz Solar Farms is a 550-megawatt solar power plant in San Luis Obispo County, California. With more than eight million modules installed across 4,700 acres, the project is considered one of the world's largest solar farms."
• BNSF Railway encompasses 32,500 route miles in 28 states. "BNSF moves enough grain each year to supply 740 million people with a year's supply of bread."
• "Berkshire Hathaway's National Indemnity group of insurance companies hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor's..."

Should you invest in Berkshire Hathaway?

I'm a shareholder, myself, and I think owning shares of this built-to-last company is a good thing. When you own shares, your dollars are invested in a diversified group of businesses, ranging from homebuilding to candy to executive jets to frying pans to recreational vehicles, paint, and jewelry.

Berkshire has grown huge in large part due to Buffett's core values of rationality and integrity. It's true that he's now in his 90s and likely won't be at the helm of the company a decade from now, but he has the company's affairs in order, with an heir apparent in Greg Abel. Buffett himself has noted many times that the company isn't likely to grow as fast going forward as it did in the past, due to its size, but it's still likely to keep rewarding shareholders for decades.

That said, the stock isn't exactly cheap at recent levels. So the best approach, if you want to be a shareholder, might be to add it to your watch list and wait for a better price -- or perhaps buy into it in installments over time.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 7 things to know about Warren Buffett's Berkshire Hathaway — Some may surprise you appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Stagflation: How to position an ASX stock portfolio
• How to build massive wealth with ASX shares

Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Selena Maranjian has positions in American Express, Apple, and Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Bank of America, Berkshire Hathaway, and Chevron. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Kroger and Occidental Petroleum. The Motley Fool Australia has recommended Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

You're probably at least somewhat familiar with Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). That's likely due to his amazing long-term investing record. Consider, for example, that according to his 2024 letter to shareholders, his company has averaged annual gains of 19.9% between 1965 and 2024 -- that's 59 years! In total, it's a gain of 5,502,284% -- enough to turn an initial investment of, say, $1,000 into close to $45 million dollars. (The S&P 500 index, in contrast, averaged 10.4% annually during that period.)

Despite all of the admiration for the guy, there are often articles here and there questioning his investing moves. These happen most frequently during bull markets when growth stocks are outperforming Berkshire.

Here's a look at how some have questioned Buffett and how -- now -- some are praising his seemingly prescient investing moves. There's a lot we can learn from Warren Buffett, so I'll review a few key tenets to consider.

Questioning Buffett

Even in the highly esteemed periodical The Economist, you can find Buffett critics. Last September, for example, an article in it noted, "Between 2009 and 2023, Berkshire's annual return averaged 13%, compared with 15% for the S&P 500." That is true, and Buffett explained that due to its size (recently sporting a market value of $1 trillion), it's not likely to grow as fast going forward as it did in the past. Still, it bested the S&P 500 in 2024 -- 25.5% vs 25% -- and in 2022, shares of Berkshire gained 4% while the S&P 500 sank by 18%.

In August, Andrew Bary in Barron's noted, "The Berkshire Hathaway CEO is hunkering down by selling stocks and raising cash for the conglomerate, raising questions about whether he is souring on the outlook for the stock market and economy."

Some may have seen Buffett as too cautious, as the S&P 500 gained 2.28% in August, followed by 2.02% in September, before dropping 1% in October and then surging 5.73% in November. That's short-term thinking, though, and Buffett is famous for taking a long view. With the S&P 500 down more than 7% over the past month, Buffett's moves are looking prescient. He's now sitting on hundreds of billions of dollars, able to deploy them to buy great stocks or entire companies that are on sale.

Some questions about Buffett that I see as reasonable are ones concerning how his company will go on after he moves on to the stock market in the sky. Buffett is 94 years old, after all, and (probably) won't live forever. Fortunately, Buffett hasn't neglected to set up the company to thrive in the future. He has tapped one of his talented managers, Greg Abel, to succeed him in managing the many businesses under Berkshire's roof and has two investing lieutenants, too, to oversee investments.

What can we learn from Buffett?

There are gobs of lessons we can take from how Buffett invests -- many of which he has freely shared with anyone who'd care to listen. For example:

Be contrarian

Buffett famously advised investors to "be fearful when others are greedy and to be greedy only when others are fearful." In other words, don't follow the crowd. Use your brain and make rational investment decisions, such as selling out of various stocks when they seem overvalued.

Stick to what you know

Buffett has long spoken about how he stays within his "circle of competence." So even if a biotechnology or cloud-computing stock seems poised for greatness, Buffett won't invest unless he has a solid understanding of its business model, risks, opportunities, and so on. (You may see some tech-heavy companies in Berkshire's portfolio these days, but remember that his lieutenants are doing a chunk of the buying.)

Don't be afraid to do nothing

It can feel like you should always be doing something, such as buying or selling, as an investor. But Buffett has long extolled the virtue of doing nothing when there's nothing to be done. You would do well to keep reading and learning all the time, but it's OK to invest in great companies and then just let them perform well for you over many years, if not decades. Buffett has quipped that his favorite holding period is "forever."

Expect mistakes, but learn from them

Buffett often confesses to various mistakes he has made, and it's obvious that we lesser investors will blunder on occasion, too. But many losses can be avoided if we take some time to think about and learn from our errors in order to avoid making them again. The more you learn about Warren Buffett, the better you may become at investing.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Analysts questioned Buffett's bearish investment approach. Now he's lauded for his bold investing moves. 4 investing takeaways you can learn from the Oracle of Omaha. appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Stagflation: How to position an ASX stock portfolio
• How to build massive wealth with ASX shares

Selena Maranjian has positions in Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Just about all of us would love to be rich, and some of us are working on it, saving and investing assiduously. It can be easy to feel a bit inadequate, though, especially when you think of those fancy, well-paid money managers, who must be raking it in thanks to their investing skills and knowledge. How can we compete with that?

Well, it turns out that not only do you not need to compete with professional money managers, you can actually outperform them -- and easily.

How to outperform most money managers

Here's the secret: Just invest in a low-fee, broad-market index fund, such as one that tracks the S&P 500 Index (SP: .INX), an index of 500 of America's biggest companies. The S&P 500 has averaged annual gains of close to 10% over long periods -- which is a very respectable growth rate.

Here's how your money could grow if you invested $10,000 annually and it grew at that 10% or a more conservative 8%. (Because the stock market offers no guarantees, over your particular investing period, it could average more or less than 10%.)

Proof that index funds rule

Here's just how solid index funds are as investments. The table below shows the percentage of stock funds that underperform their respective benchmark indexes, according to the folks at S&P Global:

One reason that some of these funds underperform a corresponding index fund is fees. Just about all funds charge expense ratios (annual fees), and some can approach or exceed 1%. A 1% fee on a $10,000 investment means you give up $100 annually. Many index funds charge just 0.10% or even less -- costing you only $10 or less per $10,000.

Here are a few takeaways from the table above:

• There are many different benchmark indexes to which you can compare your various investments.
• The longer the investing period, the more likely it is that whatever stock funds you're invested in will underperform their benchmark average.
• It therefore makes perfect sense to just invest in the benchmark indexes via easily available, low-fee index funds.

Here's another important point to consider: If these well-trained professionals can't easily outperform a broad index fund, maybe you can't, either. Even super investor Warren Buffett loves index funds. In his will, he has directed that most of the money he's leaving his wife is to go into a low-fee S&P 500 index fund. He even made a 10-year, million-dollar bet favouring index funds -- and won.

If you want to aim for higher returns

Of course, maybe you do want to try for above-average returns instead of average returns. Fine. You might do so with just a portion of your portfolio, though, leaving the rest in index funds.

To chase higher-than-average returns, you might add some growth stocks to your portfolio. They're tied to companies growing at a faster-than-average rate, such as Nvidia, MercadoLibre, Palantir Technologies, Amazon, The Trade Desk, Intuitive Surgical, and Salesforce.

Many growth stocks have performed spectacularly in the past and many will perform spectacularly in the future, but again -- no guarantees. Some will surprise you by flaming out. So it's smart to protect yourself by spreading your dollars across a bunch of them. Our Foolish investing philosophy suggests buying into around 25 or more companies and aiming to hang on to your shares for at least five years.

However you go about it, be sure that you're saving and investing for your future -- and ideally doing so according to a comprehensive retirement plan you've developed.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post This simple investment strategy beats 88% of professional money managers appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Here are the top 10 ASX 200 shares today
• Morgans says these ASX shares could rise 30% to 70%
• Where to invest $20,000 in ASX ETFs right now
• CSL's collapse deepens. Why this ASX giant can't find a floor
• Top brokers name 3 ASX shares to buy today

Selena Maranjian has positions in Amazon, Intuitive Surgical, MercadoLibre, Nvidia, Salesforce, and The Trade Desk. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Intuitive Surgical, MercadoLibre, Nvidia, Palantir Technologies, Salesforce, and The Trade Desk. The Motley Fool Australia has recommended Amazon, MercadoLibre, Nvidia, Salesforce, and The Trade Desk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The more you learn about Warren Buffett, the more impressed you'll likely be. He's best known as the CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) and for boosting the company's market value by an average annual rate of about 20% over more than 50 years.

To put that in context, the S&P 500 averaged only about 10% over that same half-century. Berkshire Hathaway is now one of America's biggest companies, employing around 372,000 people as of the end of last year.

Berkshire holds stock in many businesses -- recently owning roughly 20% of American Express and about 5.5% of Apple, for example. Buffett far prefers to own all of a great business though, instead of just a chunk of it. So he has amassed a portfolio of many wholly owned subsidiaries -- some of which might surprise you. Taking a close look at them might even give you some investing insights.

Meet the Berkshire subsidiaries

In its most recent annual report, Berkshire Hathaway listed 62 subsidiaries. Here are a few to know about:

Benjamin Moore: Paint is big business. Sherwin-Williams, for example, boasts more than 5,000 stores and has a recent market value topping $50 billion. Benjamin Moore, though, has some 7,500 locations globally.

Berkshire Hathaway Automotive: This unit stems from Buffett's 2015 acquisition of the Van Tuyl Group, which was the nation's largest privately owned automotive dealership group.

Berkshire Hathaway Energy: This big group of energy companies serves about 12 million customers and end users throughout the US, Great Britain, and Alberta, Canada. It's a major player in alternative energy, too, with billions of dollars invested in some of the largest US solar projects.

BNSF: Due to consolidation, there are now only a few major railroad companies in the US and BNSF, an acronym for Burlington Northern Santa Fe, is one of them. Its network features 32,500 route miles in 28 states and three Canadian provinces. It's the largest intermodal carrier in the US, carrying more than five million shipments in 2021. Tracing its roots back to 1849, it's the result of nearly 400 different railroad lines that merged or were acquired over 170-plus years.

Brooks Running: Yup, the 108-year-old company belongs to Berkshire. It raked in more than $1 billion in 2021, a 31% increase over the year before.

Business Wire: Many of the media releases you read, from myriad companies, are hosted on BusinessWire -- another Berkshire company.

Duracell: Those bronze and gold batteries with strong brand recognition belong to Berkshire.

Fruit of the Loom: Yup, millions of Americans are walking around wearing Berkshire Hathaway undergarments.

GEICO: GEICO was relatively small when Buffett bought the chunk of it that it didn't already own back in 1995. Today, with a workforce topping 43,000, it's the US's second-largest auto insurer and it offers other insurance coverage too for homes, rentals, flooding, and more.

HomeServices of America: If you've seen some homes for sale with a Berkshire Hathaway sign out front, you've seen HomeServices of America in action. It encompasses businesses focused on brokerage, mortgage, franchising, title, escrow, insurance, and relocation services, and includes 46,000 real estate agents in more than 900 offices.

International Dairy Queen: All those Blizzards and burgers, sold at more than 7,000 locations, belong to Berkshire.

Johns Manville: Tracing its roots back to 1858, Johns Manville is a leading insulation and commercial roofing company.

McLane: McLane is a key supply chain specialist in America, delivering groceries and food service offerings to convenience stores, mass merchants, drug stores, and chain restaurants covering more than 100,000 locations. It also has one of the largest private fleets of trucks. 

Pampered Chef: The direct sales giant recently boasted a force of more than 60,000 sellers of its kitchenwares.

See's Candies: See's has belonged to Berkshire since 1972.

There are many more Berkshire businesses, each quite impressive in its own right.

Lessons from Buffett's businesses

All the above may be very interesting, but how can it help you? Well, think about why Buffett bought these companies. Clearly, he's building an empire, but he's also picky. He favors companies that are very well managed, aiming to keep management in place when he buys a company. He also loves to buy companies that generate a lot of cash, as he can then deploy it to help some of his other businesses grow or to buy more companies.

You, too, can be Buffett-like when investing: You can favor companies that generate lots of profits -- some of which might be spent paying generous dividends to shareholders. You should always aim to favor great companies over merely good companies too. Great companies might have great management, great competitive advantages (such as a strong brand), great financial health, and great growth prospects. 

Learn more about Buffett, and you might improve your investing results even more. You might even invest in Berkshire Hathaway itself, to benefit from the growth of all the companies above. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post The companies Warren Buffett owns might surprise you appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Stagflation: How to position an ASX stock portfolio
• How to build massive wealth with ASX shares

American Express is an advertising partner of The Ascent, a Motley Fool company. Selena Maranjian has positions in American Express, Apple, and Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company has positions in and recommends Apple and Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company recommends Sherwin-Williams and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Wall Street has many messages for people who are or who may become its customers:

• "We help people, businesses and institutions build, preserve and manage wealth so they can pursue their financial goals." 
• "Our processes are finely tuned, deliberate, time-tested and risk-aware, all in the mission to achieve sustainable, above-market results." 
• "Investment professionals design and manage a portfolio aligned to your goals..." 

These messages are designed to make you believe you really need the services of their highly trained, often highly compensated professionals. To be sure, some folks can do very well using such services. But when you do so, you'll often be paying a not-insignificant fee -- perhaps 1% or more of your invested assets, every year. If the company is managing, say, $200,000 for you, it may be collecting $2,000 or more from you every year. Over 10 years, that's $20,000.

But keep in mind a few things about financial professionals:

• They're not all equally talented. Some may not be that good at their job.
• Some may have conflicts of interest. If they're not fiduciaries, they may not act in your best interest.
• Even if they serve you fairly well, a hefty annual fee will shrink your return.

You can do well without Wall Street investment advisors

A key secret that Wall Street doesn't want you to know is that you can do quite well without their financial advice. If you're thinking you need to pay a lot to professionals to manage your money because you don't know much about investing, think again.

In that case, you might just invest in a broad-market index fund that tracks an index such as the S&P 500. Most index funds charge fairly low fees, and many charge minuscule fees. There's very possibly an index fund or two available in your 401(k) plan's menu of investments. And if not, you can just set up a brokerage account and buy index fund shares there.

If you're thinking that opting for index funds will be a kind of compromise or settling, and that it will deliver lower returns than those professionals can deliver, consider this: Over the 10 years ending in 2021, fully 83% of managed large-cap stock mutual funds underperformed the S&P 500 index, and a whopping 94% of them underperformed it over 20 years.

That's right -- it's really hard to beat index funds as a perfectly powerful way to build long-term wealth.

How money can grow in index funds

Just how powerful can index funds be? Well, know that the stock market has averaged annual returns of around 10% over long periods, though it will likely sport a higher or lower average over your investing time frame, which might be 20 or 40 years.

The table below shows how much you might amass over time if you sock away certain sums every year in an index fund that averages an annual gain of 8%:

Source: Calculations by author.

See? Powerful.

There's little reason to think that you're best off handing off your hard-earned dollars to financial professionals who will take a meaningful cut of your profits -- especially if they aren't delivering market-beating, or at least market-meeting, returns.

You can also aim to do better than the market's average returns, by adding some hand-picked stocks to your portfolio. Take some time to learn a lot more about investing first, though, so that you can be acting with a lot of knowledge and confidence, ideally investing in undervalued stocks.

The case for financial professionals

Despite the arguments above, there are times when it can be smart to tap the services of financial professionals. For example:

• If you are very familiar with a money manager and their track record, and you trust them to deliver solid returns over the long run. (Remember -- any investor, amateur or professional, can have a bad year here and there.)
• If you need help with financial planning, such as for drafting a comprehensive retirement plan or for tending to your estate planning.
• If you just cannot bring yourself to do your own investing.

Financial professionals are not necessarily bad at all, but don't just assume that they will do a better job for you than you can do for yourself, especially if you opt to minimize fees by using low-cost index funds. If you're considering using a professional, do some digging into who exactly will be serving you and how talented and trustworthy they are.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post The big secret Wall Street will never tell you about investing appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Here are the top 10 ASX 200 shares today
• Morgans says these ASX shares could rise 30% to 70%
• Where to invest $20,000 in ASX ETFs right now
• CSL's collapse deepens. Why this ASX giant can't find a floor
• Top brokers name 3 ASX shares to buy today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

If you want to get rich with stocks, you're not alone -- and you have a reasonably achievable goal, too, because the stock market is one of the best ways to build wealth over the long-term, if not the best way.

You might still need a few specific pointers, though, so here are three investments that can help your portfolio grow faster.

1. Invest in index funds

First, make it easy on yourself by investing in index funds. They're mutual funds (or their cousins, exchange-traded fund (ETF)) that are passively managed, simply holding the same securities that are in a particular index, allowing the fund to deliver roughly the index's return, less fees. (And index funds tend to sport very low fees.)

So consider that the stock market's long-term average annual return is close to 10%. Parking much (or all) of your long-term dollars in, say, an S&P 500 index fund will get you returns very close to those of the S&P 500, an index that includes 500 of America's biggest companies and encompasses about 80% of the value of the entire U.S. stock market.

Index funds are hard to beat -- figuratively, because they're so easy to invest in, and literally, because most actively managed stock mutual funds underperform their benchmark indexes. If you want to amass significant wealth but don't want to study investing and make lots of buy-and-sell decisions on your own, just stick with index funds.

2. Invest in stocks you choose yourself

If you do have the time and interest in becoming a better investor, shooting for above-average returns, you might add some or a lot of individual stocks to your mix. You can keep some or much of your long-term dollars in index funds and simply add on to that, or you can put much of your money in individual stocks.

To go this route, you'll need to learn more about how to research a stock and about stock valuation. Learning how to make sense of financial statements will also serve you well.

You might decide to be primarily a value investor, or a growth investor, or you might aim for the best of both worlds, seeking undervalued growth stocks. Don't put too much of your money in any one or a few stocks, though, because even seemingly wonderful businesses can falter, and you don't want all your eggs in just a few baskets. The less you know about investing, and the less confidence you have, the more you should diversify.

Our Motley Fool investing philosophy recommends that you buy into at least 25 different stocks, while planning to hold them for at least five years. Doing so can reduce your risk and increase the chance that you'll have selected one or more companies that turn out to be terrific performers. It will also give them time to perform. (Many people just get impatient and sell out of great stocks if they don't zoom upward within a few months. Plan to be patient.)

3. Invest in learning

Finally, for best results, don't just learn the basics about value and growth investing. Commit to being a lifelong learner about investing. It can help you get better and better at it over time.

What should you read? Well, if you're going beyond index funds into individual stocks, read at least the quarterly and annual reports of your companies -- and, ideally, read up on news about the companies, too, from time to time. You don't want to end up surprised if they change direction or become less promising.

Beyond that, read about great investors and their strategies. Read about great businesses and how they became great -- that can help you learn to spot other great businesses in which to invest. Reading even more broadly, about science, history, psychology, economics, and more, can also make you a savvier investor, with insights into how investors in the stock market might behave and how consumers might behave, as well.

Any of these investment ideas can help you amass much more money than you otherwise would. Acting on all three of them might maximize your returns -- but just parking most of your hard-earned dollars in one or more good index funds can be all you need to grow your money powerfully over many years.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Ready to get rich with stocks? You can't go wrong with these 3 investments appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Here are the top 10 ASX 200 shares today
• Morgans says these ASX shares could rise 30% to 70%
• Where to invest $20,000 in ASX ETFs right now
• CSL's collapse deepens. Why this ASX giant can't find a floor
• Top brokers name 3 ASX shares to buy today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Warren Buffett has spoken to scores of groups of students over the years, answering questions, and he and his business partner Charlie Munger answer shareholder questions for hours at annual meetings of their company, Berkshire Hathaway.

A frequently asked question is how one might get better at investing, and a frequently offered bit of advice is simply to "read a lot". In fact, Buffett has suggested reading 500 pages per day!

Here's a closer look at that recommendation, along with some suggestions of what you might read.

The value of reading

The 500-page recommendation has been recounted by Todd Combs, one of Buffett's two investing lieutenants (the other being Ted Weschler). Back in 2000, when he was earning his MBA at the Columbia Business School, Buffett pointed at a stack of papers and advised: "Read 500 pages like this every day ... That's how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it."

Combs did, though, and he has reportedly read as many as 1,000 pages on many days. Much of it isn't light reading, either --  the recommended kind of reading is informative fare, such as annual reports, trade magazines for various industries, transcripts of conference calls that managements hold every quarter, newspapers, and so on.

Buffett's partner Munger is equally bullish on the value of reading, having said, "In my whole life, I have known no wise people who didn't read all the time -- none, zero ... If you want wisdom, you'll get it sitting on your a--. That's the way it comes."

He views reading as very profitable -- literally: "I've gotten paid a lot over the years for reading through the newspapers." He has quipped about it, too: "You'd be amazed at how much Warren reads -- at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out."

What to read

Just as Buffett predicted, most of us probably won't achieve the reading level of 500 pages per day, but that doesn't mean we can't change our reading habits for the better. For example:

• If you're not much of a reader, start reading.
• If you have trouble getting around to reading, make it part of your routine, perhaps finding time early in the morning or before you go to bed.
• If you are a reader, aim to read more.

Here are some ideas of what you might read:

1. Annual reports

It's smart to read the annual reports (including the financial statements) from any companies in which you've invested -- and companies you're thinking of investing in. Consider reading annual reports from competing companies, too. Buffett has explained: "If we owned stock in a company, in an industry, and there are eight other companies that are in the same industry ... I want to be on the mailing list for the reports for the other eight because I can't understand how my company is doing unless I understand what the other eight are doing."

2. News stories and magazine articles

Both Buffett and Munger are longtime newspaper lovers, and they tend to read several each day. Those who can't do that might still try to read as much of one good newspaper as they can each day. On top of that, read magazines about business and/or investments and magazine and/or online articles that relate to companies and industries of interest. Keeping up with financial news can give you an edge over other investors.

3. Trade magazines

Each industry will tend to have one or more trade magazines for folks in the industry, and these periodicals can impart a lot of inside information, helping you spot up-and-comers in the industry and learn about problems that the industry is facing. The hotel industry has Lodging Magazine, for example, while the fast-food industry has QSR -- which stands for "Quick Serve Restaurant". Many of these magazines exist in not only paper but also online form.

4. Conference call transcripts

It's very common, when a publicly traded company releases its quarterly results (including its annual report), for its management to hold a conference call with analysts who ask questions. These calls can be treasure-troves of insights, and they can give you a sense of what the managers are like, too.

5. Biographies

Reading about impressive people and how they moved through their lives and achieved whatever they achieved can be very instructive -- sometimes inspiring us, too. A great biography that informs your investing process and decisions doesn't have to be about an investor or businessperson, either. Reading about politicians, scientists, philosophers, and others can also be valuable.

6. Books about great businesses

Reading about great businesses -- how they were formed and how they've overcome challenges -- can help investors learn to spot other great businesses and develop a sense of why some succeed, and others don't. You might read books centered on particular companies, but books such as Great by Choice: Uncertainty, Chaos, and Luck -- Why Some Thrive Despite Them All by Jim Collins and Moten T. Hansen that review many companies, addressing common themes, can also be great.

7. Books about great investors

There's much to be learned from other investors, too -- and reading about very successful investors might help you refine your own investing strategy. You can learn from other investors' mistakes, which can help you avoid making them yourself. Some great investors to investigate include John Bogle, Peter Lynch, John Templeton, T. Rowe Price, and Phil Fisher.

8. Buffett's letters to shareholders

Learn from Warren Buffett himself while you're at it -- the Berkshire Hathaway website offers links to more than 50 years' worth of his annual letters to shareholders, each of which will impart some investing insights while also delivering a chuckle or two. He writes in a very accessible manner, as if he's addressing his non-financial-professional sister.

So consider taking on Buffett's challenge and see how much you can manage to read. Your investing performance can improve greatly as you absorb many insights and lessons.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Do you dare take on this bold challenge from Warren Buffett? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Stagflation: How to position an ASX stock portfolio
• How to build massive wealth with ASX shares

Selena Maranjian has positions in Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

If you don't know the name Irving Kahn, you'd do well to spend a few minutes learning about him, as his life and words offer some great investment guidance for us all. Here's a fun fact: He foresaw the 1929 stock market crash, and was one of the few who managed to profit from it.

Kahn died in 2014 – at the age of 109. Like super investor Warren Buffett, he was a follower of the value-investing tenets of Benjamin Graham.

Here are five investing tips from Kahn that can make us all better investors.

1. Be contrarian

Irving Kahn was a contrarian, purposely aiming to go against the grain when investing. (Contrarianism is also espoused by Buffett, who has famously advised investors to be fearful when others are greedy and greedy when others are fearful.) Kahn's son Alan, who worked with his father, quipped in a 1995 interview, "If we buy something which is generally well-thought of by the Street and popular, then we're probably doing something wrong."

It's a perspective that makes a lot of sense: If everyone is bullish on a company – or the overall stock market – they will be snapping up shares and sending values up. That leads to overvaluation.

Ideally, especially in the minds of value investors, overvalued securities are to be avoided, as they stand a good chance of falling closer to their intrinsic value. Meanwhile, if investors have abandoned a stock, or are bearish on the entire market, they will have sold shares, sending prices lower – possibly to the point of significant undervaluation – and making some such shares attractive for contrarian believers.

2. Control yourself

Thus, as the thoughts above suggest, successful investing requires you to control your emotions, not selling in a panic and not hastily buying because you read a promising article about an investment. As Kahn noted in an interview with financial author Jason Zweig: "Millions of people die every year of something they could cure themselves: lack of wisdom and lack of ability to control their impulses."

Take the time to figure out what investment strategies make sense to you, and then stick with them. Stick with companies you've invested in, too, through ups and downs, as long as you believe in them and see rosy futures.

3. Study companies

It can be easier to stick with your convictions if you have studied the companies in which you're invested and know them very well. That way, if the market suddenly drops, you may be able to comfortably hang on, knowing that your holdings' futures remain promising – or you might sell, understanding that a new development has rendered your previous investment thesis obsolete. For example, you might decide that post-pandemic, your real estate investment trust that's focused on office buildings will have a hard time, as you expect more people to work from home. You might determine, at the same time, to hang on to shares of railroad companies, because while their business may be suffering now, better days are ahead.

Kahn reportedly read a lot of annual reports of various companies, and often did so by starting at the back, with the financial statements – balance sheets, income statements, and statements of cash flow. Then, armed with recent performance numbers and a snapshot of the company's financial health, he would proceed to read the letter to shareholders and to review the glossy photos and other information. He explained in an interview that he aimed "to know much more about the stock I'm buying than the man who's selling does."

Zweig noted that Kahn "reads voraciously, including at least two newspapers every day and numerous magazines and books, especially about science."

4. Cast a wide net

Irving Kahn also advised investors to "look beyond the one or two largest companies in a given industry." That would serve us well because, of course, most investors already know about the top players in various industries, and so if they're in good shape, they may be trading at full or premium values because many people have already snapped up shares.

If you can look beyond those big players, though, you may find smaller gems. For example, if you expect sales of smartphones to grow robustly in the coming years, look into the companies that supply components for the phones. If you're bullish on oil companies, look beyond the big names to smaller companies, such as ones offering technology to help find and drill for oil. If you're excited about e-commerce, look beyond Amazon.com, Inc (NASDAQ: AMZN) to companies such as Etsy Inc (NASDAQ: ETSY) or China-based Baozun, which offers services to e-commerce companies.

5. Seek a margin of safety

Finally, Kahn was a believer in margins of safety. He said, "Capital is always at risk unless you buy better than average values," meaning that if you're buying overvalued securities, they may fall in value, causing you to lose money. "Better than average values" are undervalued securities that are more likely in the long run to grow in value, approaching (and perhaps surpassing) their intrinsic value.

It's smart to focus on preserving your capital – your hard-earned money – while you try to grow it. Chasing after high-flyers puts your money at too much risk.

There's a lot to be learned from smart and experienced investors such as Irving Kahn. The more you learn from them, the less you're likely to lose by making mistakes.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 5 investing tips from Irving Kahn – who called the 1929 stock market crash appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• How to invest in the AI Build-Out: Expert
• Why ASX investors dumped IVV ETF last month

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Selena Maranjian owns shares of Amazon and Baozun. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Amazon. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Want to double your money? There's no shortage of suggestions for how to do that out there. Some will urge you to gamble, invest with borrowed money, chase high-flying stocks, try to time the market, or speculate in commodities and futures. Others will suggest the lottery or penny stocks or other ways that are so risky you'll likely lose money.

If you really want to double your money, though, and do it with your precious, hard-earned dollars, it's best to stick with unassailable methods.

The Rule of 72

It's hard to argue with math, and there's a simple mathematical trick that can help you figure out how long it will take to double your money -- the Rule of 72. Per the rule, if you divide 72 by an annual growth (or interest) rate, you'll get the number of years it will take to double your money.

If you expect a 10% annual return, for instance, divide 72 by 10 and you'll see that it'll take about 7.2 years to double your money. The rule works well, except when you're dealing with extreme numbers. An expected 72% growth rate might suggest doubling in a single year, but that would take a 100% growth rate. Check out the table below, to see the rule in action.

Data source: Calculations by author.

Basically, though, doubling your money, or increasing it to any degree, depends on three simple factors:

• How much money you invest
• How long it has to grow
• How rapidly it will grow

By using any or all of those levers, you can influence how your money grows. Let's take a closer look at how you can adjust those levers:

No. 1: Save and invest more

It's obvious, but of course, in general, the more you invest, the more you can amass. The table below shows the different sums you might amass over various periods by investing $5,000, $10,000, or $15,000 annually:

Data source: Calculations by author.

Many of us can't just sock away $15,000 or more each year, but you can still probably invest more than you're currently investing, and you can aim to increase your annual contributions to various savings accounts from year to year.

If you want to get aggressive about it, which is smart for many of us, especially those who have started late or who want to try to retire early, find lots of ways to spend less and consider picking up a side gig to earn a little more -- all to facilitate more investments.

No. 2: Invest for a longer period

The same table, above, shows the incredible power of time. Doubling the number of years in which your money can grow is likely to more than double how much you amass, thanks to the magic of compounding.

If you're not a spring chicken anymore, you may not have 25 or 35 years before retirement, but you can still amp up your savings by saving more each year -- and/or boosting your growth rate.

No. 3: Earn a greater rate of return

The growth rate is the last lever you can tweak. You can't simply produce a high growth rate, though. In general, risk and return are interrelated, with low-risk investments (savings accounts, government bonds) tending to offer low growth rates and high-risk propositions (junk bonds, lottery tickets) offering high (possible) rates.

Consider aiming for solid middle ground, by focusing much of your long-term money on stocks. Over long periods, stocks have handily outperformed bonds, and the stock market has averaged annual returns of close to 10% over long periods. You can hope to do better by carefully selecting a range of individual stocks, but that takes skill and knowledge and a rational temperament. For most of us, it's hard to beat a simple low-fee broad-market index fund or two, such as one that tracks the S&P 500.

The table below shows what a difference the growth rate makes, for annual investments of $10,000:

Data source: Calculations by author.

The tables above not only show how you can double your money, but given enough time and a solid rate of growth, how you might triple or quadruple it, as well!

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 3 Investing Tricks to Double Your Money appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Here are the top 10 ASX 200 shares today
• Morgans says these ASX shares could rise 30% to 70%
• Where to invest $20,000 in ASX ETFs right now
• CSL's collapse deepens. Why this ASX giant can't find a floor
• Top brokers name 3 ASX shares to buy today

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.