The Magnificent Seven has looked like a stock pickers’ graveyard so far this year. As a group, they have not fallen so far in the first four months of the year since 2022. Their investment of tens of billions of dollars in AI may be premature. Their earnings for the first quarter have been less than stellar. However, among the megacap stocks, Berkshire Hathaway (NYSE: BRK-B | BRK-B Price Prediction) has shined. It is up 17% this year, while the Nasdaq is down 10%. Berkshire, the No.8 company based on market cap, has two advantages. It holds almost no tech in its portfolio, and its holdings are diversified.
Based on his buy and sell decisions, it appears he can look around corners.
Berkshire’s market cap of $1.1 trillion is just behind Meta (NASDAQ: META) and just ahead of Tesla (NASDAQ: TSLA). Tesla, among the Magnificent Seven, has had the most challenging year. EV sales have plunged in most of its major markets. CEO Elon Musk’s relationship with President Trump has put off some potential customers.
As of its last SEC report on its portfolio, Berkshire held shares in 44 public companies. Berkshire’s only large tech position is Apple (NASDAQ: AAPL). He has sold part of his Apple holdings for almost two years and has made billions of dollars on his investment.
One key to Berkshire’s success is that he looks for companies he thinks are undervalued, buys them, and often holds their shares, if not for decades. His bias has been toward companies with strong brands that have driven earnings for long periods. His largest holdings include Chevron (NYSE: CVX), Chubb (NYSE: CB), Kraft Heinz (NYSE: KHC) and Mastercard (NYSE: MA). While some of these have posted price dips, Buffet says his time horizon is very long.
Berkshire also has a large portfolio of very large private companies. These include insurance company giant GEICO and BNSF Railway, the largest freight railroad in the United States.
Additionally, Buffett favors insurance companies. He owns Berkshire Hathaway Reinsurance Group, National Indemnity Company, and Berkshire Hathaway Specialty Insurance, which focuses on business and commercial insurance. Describing these investments, he said, “It’s so much fun because you get the money at the start, you know, and then find out whether you’ve done something stupid later on.”
Buffett’s success is not new. That is probably why he is considered one of the greatest investors in history
Top Gaining Stocks
Top Losing Stocks