If any investor has stood the test of time, it is Warren Buffett, and with good reason. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world, and his annual Berkshire Hathaway shareholders meeting draws thousands of loyal fans who are investors. At age 94, his days of managing money may end sooner rather than later, but his legacy of greatness will remain forever.
Long-time investors and Buffett mavens are familiar with his quote, “His favorite holding for an S&P 500 stock is forever.” So it is not surprising that, for all of the success and stature Berkshire Hathaway has in the investment world, just seven top companies make up almost 74% of the funds’ total holdings. While much more concentrated than most portfolio managers would consider, the strategy has worked for Berkshire Hathaway investors for years and likely will continue to do so.
Given Buffett’s massive concentration of holdings, we focused on the two stocks that comprise a staggering 39% of Berkshire Hathaway. It is important to remember that Berkshire Hathaway has sizable stakes in many well-known private companies, such as Acme Brick, Benjamin Moore, Dairy Queen, Duracell, GEICO, and Lubrizol.
Why do we cover Warren Buffett stocks?
There are few investors with the results and the reputation Buffett has garnered over the past 50 years, and while investing has changed over the previous half-century, buying good companies with products and services that are known worldwide while paying dividends will always stay in style.
American Express
This American bank holding company and multinational financial services corporation specializes in payment cards.
This stock has been strong and posted solid fourth-quarter results. It pays a 0.90% dividend. American Express Co. (NYSE: AXP | AXP Price Prediction) provides charge and credit payment card products and travel-related services worldwide.
The company operates through three segments:
- Global Consumer Services Group
- Global Commercial Services
- Global Merchant and Network Services.
Its products and services include:
- Payment and financing products
- Network services
- Accounts payable expense management products and services
- Travel and lifestyle services
The company’s products and services also comprise:
- Merchant acquisition and processing
- Servicing and settlement
- Point-of-sale marketing
- Information products and services for merchants
- Fraud prevention services and the design and operation of customer loyalty programs
Berkshire Hathaway owns 151,610,700 shares, 21.5 % of American Express’s float, and 16.3% of the portfolio.
Apple
Apple designs, develops, and sells consumer electronics, computer software, and online services.
It is almost hard to comprehend that the legacy technology giant, with 300 million shares, still makes up a stunning 22.6% of the Berkshire Hathaway portfolio, which holds 2% of Apple’s stock, even after selling tens of millions of shares over the past year. Apple Inc. (NASDAQ: AAPL) designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide.
The company offers:
- The iPhone, a line of smartphones
- Mac, a line of personal computers
- iPad, a line of multi-purpose tablets
- Wearables, home, and accessories, including AirPods, Apple TV, Apple Watch, Beats products, and HomePod
Apple also provides AppleCare support and cloud services and operates various platforms, including the App Store, which allows customers to discover and download applications and digital content such as books, music, videos, games, and podcasts.
In addition, the company offers various services, such as:
- Apple Arcade, a game subscription service
- Apple Fitness+, a personalized fitness service
- Apple Music, which gives users a curated listening experience with on-demand radio stations
- Apple News+, a subscription news and magazine service
- Apple TV+, which offers exclusive original content
- Apple Card, a co-branded credit card
- Apple Pay, a cashless payment service
Apple investors are paid a modest 0.45% dividend.
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