The S&P 500 is down 24% this year, and the stock market hasn't been a great place to be holding your money of late. Investors have been dumping stocks left and right, with many quality companies seeing their valuations plummet as interest rate increases and rising inflation have made people second-guess their investments.

But before you follow suit and decide to dump all of your stocks and hold cash or pivot to bonds, you should consider Warren Buffett's advice, and why getting out of the stock market right now could be a costly mistake.

Buffett believes it's always favorable to remain invested

Warren Buffett isn't a fan of economic projections, or what he refers to as "dancing" in and out of stocks based solely on economic outlooks. And in a Berkshire Hathaway shareholder meeting in 2015, he said that "we think any company that has an economist has one employee too many."

Buffett is an investor who has remained invested for decades, all the while experiencing the effects of inflation, recessions, wars, and no shortage of crashes along the way. He believes that "the risks of being out of the game are huge compared to the risks of being in it." And the game he's referring to -- investing -- is favorable in the long run. Another popular investor, Peter Lynch, agrees with that notion, saying that "people who exit the stock market to avoid a decline are odds-on favorites to miss the next rally."

Given that the stock market has always recovered from every decline, history should serve as an important reminder to investors that there's always light at the end of the tunnel. 

Investors should focus on fundamentals rather than forecasts

The key takeaway for investors is to invest in businesses that will do well in the long run, and to not worry about economic projections or what the experts think will happen. There are too many variables to factor in regarding where the economy may go, and the simpler option is to focus on a business itself.

One example of a company that could make for a great long-term investment is drugmaker AbbVie (NYSE: ABBV), which has solid financials and a path to more growth. Revenue of $56.2 billion last year was 72% higher than the $32.8 billion the company generated in 2018. Profits during that time doubled to $11.5 billion. And over the trailing 12 months, the company has generated free cash flow of more than $22 billion.

AbbVie's acquisition of Botox-maker Allergan a few years ago has diversified its business; Botox cosmetic sales rose 19% in its most recent quarter (ended June 30). Its high-growth products Skyrizi and Rinvoq both generated sales growth in excess of 50% during the quarter and should make up for declines in revenue from top-selling drug Humira, which begins losing exclusivity as early as next year.

Combined with its high-yielding dividend that pays 4.2%, AbbVie is the type of stock that you might expect to perform well in the long run, regardless of the economic situation. Its financials are strong, and the business is well-diversified.

Another stock with strong fundamentals to consider is Adobe (NASDAQ: ADBE). The tech company sells popular software products, including photo-editing program Adobe Photoshop, on a recurring subscription basis. Its products are top of the line and essential to many professionals involved in web design and photography.

However, the stock recently nosedived after announcing lacklustre earnings numbers where sales rose by 13% to $4.4 billion. That's modest growth for a company that earlier this year commanded a hefty price-to-earnings multiple of more than 50 (now it's down to less than 30). Last month, it also announced a seemingly expensive $20 billion acquisition of Figma, a company that focuses on creating web applications for collaborating on web design projects.

With Adobe's stock now near 52-week lows, it could present an attractive buying opportunity for investors. The company may have carved out a new growth avenue for its business, focusing more on collaboration -- while also becoming a cheaper investment. Adobe has generated more than $7 billion in free cash flow over the trailing 12 months, and it is in a solid position to pursue more opportunities as they come up. In the long run, this can be another great stock to buy and hold.

Buying and holding could pay off, now more than ever

AbbVie and Adobe are just two examples of promising growth stocks to own for the long haul, but there are many other options out there that investors can load up on today. While there could still be declines in the months ahead for stocks, there's also the possibility of an eventual rally that could make holding on to your investments a great decision.

As long as you don't need to take the money out, keeping it invested in stocks with strong fundamentals could be a move you thank yourself for later on.   

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

The post Why Warren Buffett thinks it's a mistake to dump your stocks in a bear market appeared first on The Motley Fool Australia.

Building up a quarterly stream of passive income through shares of dividend-paying stocks is a dream for many investors, but a lot of people approach it the wrong way. You can't expect to build up a huge amount of passive revenue overnight, and you'll need to have the right strategy to accumulate shares of dividend stocks that will be stable in the long-term.

Let's examine three passive-income secrets to bolster your dividend flows and ensure that they aren't eroded.

1. You don't have to receive your dividends now

The most important passive-income secret is that you don't need to actually accept any dividends in the form of cash if you'd prefer to make a larger amount of cash down the line. By setting up a dividend reinvestment plan (DRP), you can keep adding to your position automatically quarter after quarter, meaning that you'll have more shares producing dividend income than you would if you had spent the money rather than reinvesting it.

Let's work through an example with the pharmaceutical company AbbVie Inc. (NYSE: ABBV) to see how dividend reinvestment can boost your returns. Over the past five years, AbbVie has achieved a total return of 96.5%; however, the price of its shares alone only gained a bit more than 61%. In the same period, the company hiked its dividend by 120%, thanks to profitable sales of its ever-increasing portfolio of medicines.

If you're not familiar, the total return of a stock accounts for the impact of dividend payments as well as share price appreciation, so it's a good proxy for how much you'd make if you were reinvesting rather than spending the cash. Therefore, if you simply accept the company's payments and spend them, you'll have significantly less than if you set up a DRIP and wait the equivalent amount of time.

So when you're thinking about passive income, it makes sense to think about when you will want to spend the money. The longer you can defer spending and keep reinvesting, the larger your income will ultimately be.

2. You don't need to worry about beating the market 

But as a passive-income investor, outperformance shouldn't be your goal, nor should it be something you expect to achieve most of the time. The reason: You're invested for the cash flow, not the stock price returns. As long as the cash flow keeps rolling in at the same rate, the rest doesn't matter so much.

Everyone talks about outperforming the market with their portfolio, and much ink is spilled about which stocks are likely to grow faster than the market's long-term average of around 10% annually.

The type of companies that have highly stable cash flows to make long-term passive income tend to be more interested in returning capital to shareholders than other companies that are more focused on deploying capital to grow. Take Innovative Industrial Properties (NYSE: IIPR), a real estate investment trust (REIT), as an example. Its business model is to buy marijuana cultivation facilities, then rent them back to their former owners to capture a long trail of income. 

The company has underperformed the market over the last three years, but its dividend has risen by 124% in that time. Right now, its forward dividend yield is near 7.7%, which is quite high.

If you plan to invest in Innovative Industrial Properties expecting a certain amount in cash annually based on your initial purchase, its performance relative to the market is a moot point. You'll get your cash flow regardless of what the market does, as long as the business can support the payout. 

3. Diversify your holdings to avoid wipeouts

A third secret of passive-income investing is that you need to diversify your selection of income stocks, just as with your portfolio as a whole. It's pretty obvious why: If you derive all of your passive cash flow from a single business, and that business goes bust or faces stiff headwinds that require it to slash its payout, you're out of luck. And since dividend cuts are often a harbinger of further difficult times, you might even need to take steep losses on the price of your shares, not to mention the actual money into your account every quarter. 

So don't invest all of your passive-income capital into one stock. Try to have at least a dozen. And if possible, make sure that they're in various different industries and use different business models.

For instance, Innovative Industrial Properties and AbbVie compete in entirely different areas, and they aren't vulnerable to the same types of risk. So they'd be suitable options to buy for diversified passive income. When the economy is struggling or one of your companies hits a major stumble, you'll be grateful that only a portion of your dividend revenue takes a hit.

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

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With the market in a jittery mood thanks to ongoing inflation, interest rate hike mania, and geopolitical instability, nobody can blame investors who are wringing their hands anxiously in anticipation of a potential market crash. Thankfully, the chances of a crash happening are too difficult to determine with any certainty, so it doesn't make much sense to worry at any particular time. 

That probably isn't very reassuring. But what will be reassuring is if you have a plan for what to do and what not to do in the event of a crash. For now, let's work on three things you definitely shouldn't do if there's chaos in the market. 

1. Sell your stocks in a panic

The first (and most important) thing you shouldn't do if the stock market crashes is to sell all of your stocks to try to avoid experiencing any further losses. The problem with panic selling is that it feels like the right move. After all, if you can cut your losses fast enough, the market's downward move to the tune of 30% might only lead to losses of 10% for you.

Selling eases the sense of anxiety you have about your lack of control over the situation and your fear of losing money. And if you hear from friends or relatives about how much they got whacked by holding on to their shares, you might even give yourself a pat on the back. 

But you'll probably end up missing out on the rebound afterward. And in many cases, that means you'll make less money than if you'd simply stayed the course. Let's examine AbbVie's (NYSE: ABBV) performance during the coronavirus crash in March 2020 as an example.

^SPX data by YCharts

As you can see, AbbVie's shares took a beating during the crash, as did the market. But as the catalyst for the crash, the pandemic, didn't actually do much to affect the company's ability to do its business of developing and commercializing drugs, its stock quickly bounced back.

Within a couple of months, it was outperforming the market, and its earlier damage was entirely reversed. The stock even ended the year significantly above where it started, and you'd have missed out on that gain if you had sold your shares. Even if you tried to restart your position, you'd struggle to time it correctly and you'd almost certainly be missing out on some upside. 

There's absolutely no guarantee that every stock will behave the same as AbbVie's did during every market crash, and many will not. In cases where the crash isn't caused by anything that fundamentally impacts a company's ability to make money as efficiently as it currently does, however, selling is likely to be a poor decision.

2. Dramatically change your investing strategy without good reason

In keeping with the above, the second thing that you shouldn't do if the stock market crashes is to switch up your game plan for investing without noodling on it for a good while. It's a fact of life that crashes are often precipitated by economic or global events. Nonetheless, if you have a properly diversified portfolio, it should be unlikely that any specific trend or happening makes all of your stocks genuinely vulnerable to further declines all at once. And that means any changes to your approach should be at the margin, even after a crash.

For example, let's say before the pandemic you held AMC Entertainment (NYSE: AMC) for exposure to the entertainment industry in the same portfolio as your AbbVie shares. The market's collapse in March was caused by fears of the coronavirus, and AMC's share price was hit plenty hard. As an intelligent and far-sighted investor, you held on to your shares at the time. But during your quarterly assessment of your positions, you decide that movie theaters are probably not going to be making a strong comeback for as long as the coronavirus is afoot, and you opt to sell your shares.

So far, so good -- it's important to make adjustments to your strategy when new information makes your original investing thesis incorrect or irrelevant.

Where many investors might go wrong, however, is to then do something like take their proceeds from the sale of AMC and invest them in a way that reduces their portfolio's level of diversification, perhaps by buying more shares of AbbVie. Such an action is a major departure from your prior approach of buying an entertainment industry stock to give yourself exposure to that industry's future growth. And by doing so, you're throwing the baby -- your well-reasoned desire for diversification -- out with the bathwater, which in this case is AMC's poorly performing stock in the wake of the crash. 

3. Stay on the sidelines

The final thing investors shouldn't do if the market crashes is to stay on the sidelines and wait for calmer waters. Instead, they should take action to buy while shares are cheaper than normal. And that's especially true if you plan to dollar-cost average to build up your positions. For those who have some capital saved up, sharp and panic-driven downturns are opportunities to shore up your holdings with deeply discounted shares -- once again, assuming that your original investing thesis about why they're worth buying is still valid. 

If you do decide to sit on the sidelines during a crash or correction, you won't be actively harming your portfolio's value, but you'll likely be missing out on growth. It's frightening to buy more shares of a stock when it's down and when it seems like the sky is falling, but famous investors like Warren Buffett do it. And for companies that pay a dividend, like AbbVie, buying rather than idling means that you'll be securing shares with higher dividend yields than you could normally get, so you'll get paid for your smart decision to take a hot bargain for years down the line.

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

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If your portfolio is teetering amid a turbulent bear market -- as pretty much everyone's is at the moment -- you need a plan to come out ahead, and you need to act on it.

Fruitful investments made today could have the benefit of a very long run-up once the bear market subsides, and mistakes made out of fear could have consequences for a long time, too. 

With those consequences in mind, let's look at three quick steps you can take to make the best out of the market as it is right now. 

1. Build on your high-confidence positions

The first thing to do when the market gets rough is to use it as an opportunity to gobble up shares of companies in your portfolio you think will continue to appreciate in value for a long time, even if their stock price is falling in the short term.

Think about a business like Pfizer (NYSE: PFE), which has seen its shares fall by 11% so far this year despite widespread successes with hit products like Comirnaty, its coronavirus vaccine, and Paxlovid, its antiviral pill for COVID.

If you have a position in it and the recent drop scares you off from adding more, you're missing out on a sale -- assuming that you actually believe it'll eventually recover. 

So, especially for an investment like Pfizer, which is steadily growing its sales and net income, it makes more sense to be buying shares than sitting on the sidelines. The real trick is to keep investing even when high-confidence picks get rocked.

And as long as your investing thesis is still as valid as when you started buying the shares, you'll be getting the biggest discounts when things look like they're crashing the hardest. Just be aware that you might need to wait a few years before your spending starts to pay off with outsized returns.

2. Set up a dividend reinvestment plan

Another great action to take to weather the bear market is to enable a dividend reinvestment plan (DRIP) for your dividend-paying stocks. Take the returns from AbbVie (NYSE: ABBV) over the last 10 years, for example:

ABBV data by YCharts

As the chart shows, the price returns from AbbVie shares are nowhere near the total return that's possible by retaining and reinvesting each of its quarterly dividend payments. When you reinvest your dividends instead of accepting them in cash and spending them elsewhere, your position compounds in value much faster.

And when share prices dip during a bear market, the stock's dividend yield increases accordingly, meaning that if you aren't reinvesting your dividends at that moment, you're missing out on securing some higher-yield shares for the remaining years of your long hold. 

Plus, biopharma companies like AbbVie often have significant cash flows that are enough to keep hiking their dividend even when there's a bear market, recession, or other economic issues.

That means if you don't set your shares to reinvest their dividends now, then by the time the bear market is over, you might have missed out on quite a bit of compounding at a very attractive rate. And it would be a shame to lose out on this bonus that's there for the taking. 

3. Talk yourself out of panic selling (or buying)

Perhaps the most important step to take during a bear market or market crash is to take a deep breath and talk yourself out of selling your shares in a panic. (It's also helpful to avoid frantically buying the dip on stocks you aren't fully confident in but seem priced like a bargain.)

Selling your shares locks in whatever losses you've sustained, regardless of whether there is a valid business reason for the underlying company to experience additional headwinds. 

In the current market, it's true that there are quite a few economic headwinds making things difficult, but it's also true that buying high and selling low is a losing strategy.

Eventually, the market will recover, and when it does, the stock you're itching to sell could easily come back with a vengeance. Therefore, when you get tempted to pull the plug on some of your investments, you'll regret not stepping back, especially if you don't have a need for the money you invested anytime soon.

When I get tempted to sell due to market chaos, I find that it's often helpful to simply close my browser tab displaying my portfolio and take a walk outside. 

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

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The 'Oracle of Omaha' has been making the most of the downturn, snapping up billions of dollars' worth of stock through Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) over the past few months.

Interestingly, some of his major buys have fallen into one sector. At the same time, the famous investor has been offloading holdings in another.

What sectors has Buffett been buying and selling?

This year has been off to a rough start for many market enthusiasts – but not for Buffett.

The Dow Jones Industrial Average has slipped around 11% in 2022. Meanwhile, the S&P 500 has tumbled nearly 15%.

But it's the Nasdaq Composite that's suffering most. It has plunged 24% this year.

Thankfully, the S&P/ASX 200 Index (ASX: XJO) is outperforming the lot, sliding just 6% year to date.

The situation might look dire but it seems it may be Buffett's time to shine. And he's looking to the energy sector for new wins.

Buffett buys: Energy sector

A recent regulatory filing shows the multibillionaire investor has jumped on board Occidental Petroleum Corporation (NYSE: OXY) and quadrupled his stake in Chevron Corporation (NYSE: CVX) in 2022.

The oil and gas producing companies have been outperforming lately. Their share prices have gained 118% and 45% respectively year to date. They also both pay dividends.

Similar stocks on the ASX include Woodside Petroleum Ltd (ASX: WPL).

As of its previous close, the S&P/ASX 200 Energy Index (ASX: XEJ) has gained 37% in 2022 and was trading with a 6% dividend yield.

Mixed: Financials stocks

Berkshire Hathaway also recently snapped up new positions in financial stocks Citigroup Inc (NYSE: C) and Ally Financial Inc (NYSE: ALLY).

Though, the investment house has ditched its former major holding in bank Wells Fargo & Co (NYSE: WFC).

Buffett sells: Healthcare shares

It has also dumped many a healthcare stock.

Biopharmaceutical shares AbbVie Inc (NYSE: ABBV) and Bristol-Myers Sqibb Co (NYSE: BMY) were shown the chopping block while Berkshire Hathaway's holding in Royalty Pharma (NASDAQ: RPRX) was also stripped back.

However, it's worth noting Buffett has steadily held other notable healthcare stocks such as Johnson & Johnson (NYSE: JNJ) and Proctor & Gamble Co (NYSE: PG) over the last few months.

The post Warren Buffett's been bargain hunting following the stock market sell-off. Here's the sector he's been buying (and selling) appeared first on The Motley Fool Australia.

Today we look at an ASX ETF that tracks a specific industry, namely healthcare. And we look at why two financial pros list it as a 'buy'.

A defensive ASX ETF

In an ageing world with the global pandemic still very much in circulation, healthcare shares have received plenty of attention these past two years.

Aussie investors looking for exposure to international healthcare stocks with a single investment may wish to look into the BetaShares Global Healthcare ETF (ASX: DRUG).

This ASX ETF is invested in a wide range of international healthcare companies. Some 45% of them are involved in pharmaceuticals, with 19% focused on healthcare equipment, and 11% in the biotechnology space.

DRUG's top four holdings are UnitedHealth Group Inc (NYSE: UNH), Johnson & Johnson (NYSE: JNJ), AbbVie Inc (NYSE:ABBV) and Pfizer Inc (NYSE: PFE).

Year-to-date, this ASX ETF is down 2.4%. That compares to a 3.9% loss posted by the All Ordinaries Index (ASX: XAO) so far in 2022.

Why these two fundies list DRUG as a buy

Speaking with Livewire, Felicity Thomas from Shaw and Partners said DRUG was an ASX ETF to buy.

According to Thomas:

If you think we're going into a recessionary environment, you want to tilt your portfolio to be a little bit more defensive. Healthcare is defensive and we've got an ageing population globally, so I think it's a really good long-term play

Now we're not looking at an imminent recession here in Australia just yet. But a growing cohort of economists is beginning to predict that the United States could be heading down that road sooner than later. And where the world's biggest economy goes, most others tend to follow.

Steering clear of potential recessions, Ben Nash from Pivot Wealth also listed this ASX ETF as a buy, citing the immense expenditures going into healthcare globally.

Nash said:

I think that we're seeing huge amounts of money being spent on healthcare in Australia and globally. The US is one of the biggest global markets and healthcare costs are pretty staggering over there. I think that plus the secondary exposure to the property market makes this one a solid performer for the medium to long term.

Investors looking for an ASX ETF to add to their portfolios for the longer term may want to run their slide rule across DRUG.

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Pharmaceutical stocks can be great tools for building wealth, provided that you understand how and why to use them -- and how not to. Like all investments, it's entirely possible to get burned by pharma stocks, so you'll want to minimize the risks.

To help you on your journey, here are three of the biggest mistakes that new pharma investors are prone to making. The road to mastery is long, but if you do your best to avoid these pitfalls, your pharma portfolio could be in much better shape over the years.

1. Disregarding the exclusivity expiration date for key medicines

When a pharmaceutical company gets a new drug approved for sale by a regulatory body, it's in a race against time to recoup development costs and turn a profit before competitors are legally allowed to copy the drug and sell their own cheaper generic version.

Investors who aren't aware of looming exclusivity expirations invest in pharma stocks at their own peril. You wouldn't want to invest in a business that's already losing revenue from one of its top moneymakers, quickly.

For most drugs developed in the US, exclusivity protections last for five years, and patent protections can last for 20 years. Not all drugs have patent protections, but exclusivity protections are the norm.

In a nutshell, that means five years after a medicine hits the market, there's a solid chance that the drugmaker's revenue from it will start to fall as generic competitors enter. For example, one of the biggest questions for investors in AbbVie (NYSE: ABBV) is whether it'll be able to successfully navigate falling revenue from its blockbuster drug Humira once its exclusivity protections expire next year.

The larger the company, the less the expiration of any individual drug's protections will impact the stock. Still, the amount of annual revenue from a product matters the most, so be sure to check a company's latest earnings report to see how much an upcoming exclusivity protection expiration will ding the top line.

2. Ignoring the valuation

As with all stocks, it's perilous to ignore the valuation of pharma companies. After all, you check the price tag before you buy something to see if it's a deal worth taking, and pharma stocks should be no different.

What's an acceptable deal for you depends on your own preferences, but take care to recognize that an overly inexpensive stock should be a red flag, just like an overly expensive one would be. If you see that the price-to-earnings multiple of AbbVie is around half that of its similarly sized competitors like Eli Lilly, try to figure out why the market is valuing it that way.

With AbbVie, the answer almost certainly relates to its looming expiring exclusivity for one of its biggest-earning medicines, so the cheap valuation is a signal that the market is expecting lower future earnings. If you buy the shares and the market is correct, you might be disappointed by languid growth. Worse yet, if you buy an overpriced stock and an economic event causes investors to flee to grounded valuations, you could be looking at substantial losses.

However, you don't need to obsess over valuations, especially not when your investing thesis for a business is strong. A stock that's on the expensive side might be that way because of anticipated fast growth that pans out. Alternatively, shares that are priced cheaply might be the result of the market judging a stock's growth potential incorrectly.

You're more likely to avoid investor's regret if you factor valuation analysis into your research process.

3. Selling too soon

Perhaps the largest mistake that new investors make when purchasing pharma stocks is selling them too soon.

The drug development cycle takes quite a while to bear fruit, with the median successful project lasting around 7.2 years from the preclinical stage through the terminal regulatory approval for commercialization. Therefore, future revenue growth needs to be planned for far ahead of time. And because only 13.8% of medicines make it through the clinical trials process, increasing income over time is far from guaranteed.

This is why many companies develop many different medicines in parallel. As a result, major players tend to have at least a couple of programs that are scheduled to launch each year. When certain programs fail, it causes an immediate and negative impact on the share price. But once approved, medicines often take a year or more from their launch to see widespread adoption, and peak sales can sometimes occur only several years after launch.

So the positive impacts on shareholder value are partially registered over time, which is one of the reasons it's so important to keep holding even when there's been a setback with an important program.

In other words, if you buy a pharma stock only to hold it for a year before selling, you probably didn't get much of the benefit of the slow march of the development process. Especially when a drug stock pays a dividend, holding it for at least three years is highly recommended. And if you commit to a multi-year holding period, you'll be better prepared to stomach the inevitable downward volatility.

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

The post Investing in pharma stocks? Avoid doing these 3 things appeared first on The Motley Fool Australia.

And that brings us to today. Yesterday, Berkshire filed its 10F report for the quarter ending 31 March 2021. Although that's a while ago now (and an eternity in the investing world), it's still a great opportunity to get a look inside Buffett's head and see what he's been up to.

So let's dig in.

Buffett's buys

So according to reporting in the Australian Financial Review (AFR), Berkshire did make some substantial moves over the March quarter. These were mostly selling though. His largest sells were in bank shares, particularly Wells Fargo & Co (NYSE: WFC), which the AFR notes Buffett has held for more than three decades now. At the height of Berkshire's Wells Fargo investment, the company owned more than 10% of the US$198 billion bank. But as of 31 march, Berkshire only owned ~675,000 shares, worth roughly US$32.34 million on the most recent pricing.

Berkshire also offloaded shares of another US bank in U.S. Bancorp (NYSE: USB), as well as a smaller, but total, stake in Synchrony Financial (NYSE: SYF).

Another sector that Berkshire and Buffett seem less enamoured with than in the past is oil. In the quarter ending 31 December 2020, Berkshire has a US$4.1 billion position in the oil giant Chevron Corporation (NYSE: CVX). But Berkshire has been selling off this position as well. As of 31 March, Berkshire had just US$2.5 billion worth of Chevron stock left. Perhaps the recent bull run in oil prices has served its purpose for Buffett.

Other shares that Buffett and Berkshire trimmed over the quarter include AbbVie Inc (NYSE: ABBV), Bristol-Myers Squibb Co (NYSE: BMY), Merck & Co., Inc. (NYSE: MRK) and General Motors Company (NYSE: GM).

In their place, Berkshire has added to its stake in supermarket chain Kroger Co (NYSE: KR), almost doubling its investment over the quarter to 51 million shares (worth US$1.91 billion on today's prices). It has also topped up on communications giant Verizon Communications Inc. (NYSE: VZ), and services company Marsh & McLennan Companies, Inc. (NYSE: MMC). It also initiated a position in insurance broker Aon PLC (NYSE: AON).

Berkshire's stakes in its largest holdings in Apple Inc (NASDAQ: AAPL) and Bank of America Corp (NYSE: BAC) remain unchanged for the quarter.

The post Here are the shares that Warren Buffett has been buying (and selling) lately appeared first on The Motley Fool Australia.

A collaboration between diversified industrial AbbVie Inc (NYSE: ABBV) and Amazon.com, Inc. (NASDAQ: AMZN) is likely to increase electric vehicle (EV) adoption among transportation companies and fleet operators.

That's the key takeaway from the recently announced collaboration between ABB and Amazon's cloud computing business, Amazon Web Services (AWS). ABB will bring its know-how in energy management and charging technology to AWS' cloud technology, software, and analytics capability to create "a cloud-based digital solution for the real-time fleet management of EVs," according to the press release.

The new solution will roll out in the back half of 2021 and use advanced data analytics and machine learning to optimize EV fleet performance. For example, it will enable fleet operators to manage the charging of their fleet in accord with optimizing routes for EVs.

Given the reality that an all-EV fleet will probably contain a range of vehicles, it's likely that fleet operators will be looking for software to help them centrally manage a diverse set of EVs with different charging characteristics.

The ABB and AWS solution is intended to give fleet owners greater confidence in making the switch. For examples of how transportation companies are warming to EVs, consider that UPS has ordered 10,000 purpose-built EVs. Meanwhile, FedEx is committed to only buying EVs for its FedEx Express parcel pickup and delivery fleet by 2030. Management plans to have its entire parcel pickup and delivery fleet running on zero-emission EVs by 2040.

All told, the transition to EVs is real among fleet operators, and the ABB and AWS solution is likely to help accelerate it.

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

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Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) filed its Form 13F with the Securities and Exchange Commission on Monday, which gave investors a look at what the Oracle of Omaha and his team of investors bought in the third quarter.

Among the list were four pharmaceutical companies: AbbVie (NYSE: ABBV), Merck (NYSE: MRK), Bristol Myers Squibb (NYSE: BMY), and Pfizer (NYSE: PFE). The first three were similarly sized purchases of around $1.8 billion. The Pfizer purchase was substantially smaller, with a market value around $136 million.

Within the industry, there doesn't seem to be a theme among the four drugmakers.

Merck and Bristol Myers are heavily into oncology. Bristol Myers expanded its cancer treatments last year with the acquisition of Celgene. Merck is hanging its hat on Keytruda with plans to spin out its women's health and cardiovascular drugs, as well as some other brands into Organon & Co. next year.

AbbVie is looking to diversify away from its reliance on its megablockbuster Humira, which treats a variety of inflammatory disorders. The pharmaceutical company made a big move into dermatology with the acquisition of Allergan, the maker of Botox, which closed earlier this year.

Pfizer is currently most famous for its coronavirus vaccine, but the pharma giant is quite diversified. Like Merck, Pfizer is looking to get more focused by merging its Upjohn generic-drug business with Mylan in a new company called Viatris that's scheduled to start trading on Tuesday. Investors will have to wait for the next Form 13F to see what Buffett does with the shares of Viatris that all Pfizer shareholders received.

The pharmaceutical companies do have one thing in common: They're all trading off their all-time highs and have been for all of 2020, suggesting Buffet might be bargain shopping.

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

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