Warren Buffett could be the greatest investor of all time. Indeed, a number of surveys has pegged the Berkshire Hathaway (NYSE:BRK-B) CEO atop a long list of investing talent of our generation.
I certainly think Buffett deserves such a distinction. Next year, Buffett will celebrate 60 years at the helm of Berkshire, having delivered nearly 20% compounded annual returns over his tenure. This would have meant an investor who put $100 in with Buffett in 1965 would have more than $5.6 million today. It turns out that investing in quality companies with strong brands and durable competitive advantages pays off over long periods of time.
For those who want to follow in the Oracle of Omaha’s footsteps, here are three of his stocks to consider right now. I think these three companies could be among the best buys in October for the next 12 to 24 months.
Key Points About This Article:
- Investors looking to follow in Berkshire Hathaway CEO Warren Buffett’s footsteps have a number of world-class companies to choose from.
- Here are three of his top holdings I think investors would do well to hold for the next year or two.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
Chubb (CB)
Chubb (NYSE:CB) is among Warren Buffett’s most recent adds, with shares of the company surging more than 8% after a Berkshire Hathaway filing announced the company had acquired nearly 26 million shares of the insurer. This stake is valued at around $6.7 billion and effectively made this insurance company Berkshire’s ninth-largest holding. Nothing like a quick investment to make a given stock a top-10 holding for Berkshire Hathaway – but when Buffett acts, he often acts big.
In the grand scheme of things, this investment isn’t all that large, given the overall size of Berkshire’s portfolio and its cash hoard which is approaching $300 billion. But Warren Buffett has been a long-time bull on the insurance industry, and Chubb’s property-casualty business could provide the necessary growth to power his portfolio higher over the long-term. Buffett’s long-term buy and hold strategy has worked wonders with other holdings, and also provides a reliable source of capital (via the float insurance companies generate) to reinvest in other long-term investments.
This winning strategy is one I think investors can certainly consider as part of a truly long-term investing strategy. For those thinking about which investments may outperform over the long-term, finding a company like Chubb that trades at 12 times earnings and spits off cash (and a 1.3% dividend) certainly seems like a good move.
Coca-Cola (KO)
Coca-Cola (NYSE:KO) remains a staple in Berkshire’s portfolio, and has been for 35 years. Indeed, if there’s a single stock that speaks to Berkshire’s willingness to pay a fair price for an excellent company with a durable moat, and hold for a long time, this holding would qualify.
Coca-Cola’s share price has traded roughly sideways since just before the pandemic, but it’s a company that’s been making a move higher in recent months as investors look to reposition their portfolios more defensively. The thing is, even if KO stock does trade sideways for an extended period of time, investors can benefit from the company’s rock-solid 2.8% dividend yield, and bank on continued dividend hikes over the long-term, increasing their income as they reinvest in shares along the way.
That’s clearly a strategy that’s worked for Buffett over time, as Coca-Cola continues to retain its dominant market position in the world of carbonated beverages. The company does continue to innovate, launching a lighter more cost-effective bottle in India that enhances shelf life and accessibility. And there’s always steady global growth trends that investors rely on for mid-single-digit growth over the long-term.
For those looking to get wealthy slowly, this is a top pick in my books.
Berkshire Hathaway (BRK-B)
Perhaps no other company truly reflects Warren Buffett’s investing style than Berkshire Hathaway (NYSE:BRK-B). Indeed, one could argue that this is the company Buffett has spent the most capital acquiring shares of in recent years, viewing his own stock as relatively undervalued compared to the options available in the market. Via share repurchases, he’s increased his ownership stake in the company while giving existing shareholders a greater claim on future profitability. Say what you want about share buybacks, but they’ve been great for Buffett and his followers over the past six decades.
I think Berkshire is likely to remain one of his top investing ideas over the long-term. In Q2 2024, the conglomerate spent about $345.1 million on stock buybacks, following nearly $2.6 billion in Q1. Despite a 20% increase in share price this year, shares of BRK-B still trade at a price-earnings ratio of less than 20-times (cheaper than the overall market), with a host of world-class companies included in this portfolio. The easiest way for investors to get Buffett-like exposure to this market is to ride his coattails. And while Buffett won’t live forever, the team he’s assembled will most certainly keep the legacy going, and he’s put together safeguards to ensure that’s the case.
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