Posted in:

How to invest like billionaire Warren Buffett

how to invest like warren buffett berkshire hathaway

At 88 years old, Warren Buffett still reigns as the world’s most famous and profitable investor.

Though some industry observers question whether the “sage of Omaha” still has what it takes to continue to invest successfully after several decades, he still attracts a huge crowd.

About 40,000 people travelled to Omaha, Nebraska, to listen to what he had to say at the latest annual general meeting of Berkshire Hathaway, the holding company he runs.

Though not everyone is willing or able to buy shares in Berkshire Hathaway (NYSE: BRK.A) at its current price, which is well above $US300,000 ($433,000), many investors are keen to learn Buffett’s investment strategy.

One way to invest like him is to buy into some of the companies owned by Berkshire Hathaway.

Part of his investment strategy involves buying more than just a few shares in a company. He prefers a majority stake. He also prefers companies with products or services that are easy to understand.

Let’s look at some of the companies that Buffett has invested in. Some are fully owned by Berkshire Hathaway and others are partially owned.

invest like warren buffett berkshire hathaway amazon

Amazon

Buffett said he did not personally buy Amazon shares, but one of the money managers at Berkshire Hathaway did.

So Berkshire’s investment in Amazon will show up in the next company filing. It will be interesting to see if it continues to accumulate Amazon shares.

Buffett is known to shy away from tech stocks, saying “they are outside my area of expertise”.

But he’s also been quoted as praising Amazon founder Jeff Bezos for what he’s done in growing Amazon to be a global tech giant.

Apple

Berkshire owns 249.5 million Apple shares, making it one of the biggest investments in its portfolio, according to recent industry reports.

Berkshire started buying Apple shares in 2017 and added more in 2018. But it’s been reported that the conglomerate reduced its Apple holdings in late 2018.

Buffet has always said that Berkshire is a long-term investor and considers Apple as a value investment, like everything else in its portfolio.

American Express/Mastercard/Visa

Berkshire owns shares in these three major credit card companies, with American Express representing the biggest investment of the three.

The latest financial reports show that Berkshire owns about 151.6 million shares in American Express, 4.9 million in Mastercard and 10.5 million in Visa.

The Coca-Cola Company

Buffett is an unabashed fan of Coca-Cola.

He’s known to drink this sugary beverage on a regular basis. Coca-Cola Corp is one of the longest-running investments for Berkshire. Currently it owns about 400 million shares.

Costco Wholesale/Kraft Heinz

Believing that food and food items will always be in demand, Berkshire has invested in a number of manufacturers and distributors, including Costco and Kraft Heinz.

Current holdings include 4.3 million shares in Costco and 325.6 million in Kraft Heinz. (Interestingly, Buffett recently admitted that he had paid too much for Kraft when it merged with Heinz in 2015.)

Delta Air/American Airlines

Berkshire is also invested in the airline and aviation industry through its holdings in American Airlines and Delta Air, which are two of the major brands in the US.

Berkshire owns 43.7 million American Airlines shares and 70.9 million Delta shares.

Goldman Sachs/JP Morgan

Goldman Sachs approached Buffet when the GFC  hit in 2008, when many finance sector companies came under tremendous pressure.

Buffett, known for his knowledge of corporate America, was there to help.

Today Berkshire continues to be invested in Goldman Sachs and other finance businesses such as JP Morgan, Bank of America and Bank of New York Mellon.

These are only some of the major companies and brands that Berkshire Hathaway (and to a certain extent Buffett in his personal capacity) has invested in and continues to invest in.

Some may fit into your portfolio while others may not. Either way, it may be worth considering whether some of these stocks can deliver improved, just as they have delivered ongoing returns for the sage of Omaha.

Written by Alex Douglas

Alex Douglas

Alex Douglas is managing director of Monex Securities Australia (AFSL: 363 972), part of the Monex Group Inc. Since first plotting currency price charts by hand in 1983, Alex has worked in a range of markets including foreign exchange, futures and equities. Alex is a Certified Financial Technician under the International Federation of Technical Analysts. He also has a Diploma of Technical Analysis from the Australian Technical Analysts Association.

25 posts

One Comment

Leave a Reply
  1. I’ve been a subscriber of Money probably since it’s inception and love it, I’ve just read your bit on Buffett and some of his investments with a personal interest from myself, as I had a $50K “certain bank” Coupon Investment comprising Buffetts selection of Amex/Kraft Heinz/WFC/ Coke which commenced in March 2017 and was to mature 3 years later returning 8%PA paid quarterly.
    I was recently fortunate to be able to terminate this investment, and have my money returned, although the terms of the termination meant I made no money on my investment.
    If my investment was to run its term, and “any” of the 4 shares dropped more than 40% of the 2017 value, I would lose 40% of my investment of $50K.
    I just wanted to point out to you that Kraft Heinz was recently down 63.77% from its 2017 price of $90.81 and the last price I had from a couple of weeks ago was $32.90?
    I wanted to point out to you, after reading your above article, that an investment in Kraft Heinz from my experience and the advice given to me, that it is not doing so well, and is probably not a good investment at present?
    Sincerely
    Bob McElveney

Leave a Reply

Your email address will not be published. Required fields are marked *