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Who is Warren Buffett?
We have all heard of Warren Buffett, one of the greatest investors of all time, who consistently outperformed the markets. Widely regarded as one of the most influential businessmen of the 20th century, he was born on August 30, 1930, in Omaha, Nebraska, and started investing at a young age. Buffett is the chairman and CEO of Berkshire Hathaway, a conglomerate that owns numerous subsidiaries and invests in a wide range of businesses.
From 1965-2023, the Berkshire Hathaway stock gained 3,787,464%, or more than 153 times the S&P 500’s gains over the same time period; this would translate to roughly $355 million from a $10,000 investment.
He is known for his value investing strategy, which involves identifying undervalued companies with strong long-term potential and investing in them for the long term.
So what is his investment strategy? What are the companies that are in his portfolio? Why does he invest in these companies?
Here are some companies that he heavily invests in:
1. Apple
Buffett has a view that Apple is both a consumer and technology company. When he used to go to an Omaha Dairy Queen with his grandchildren, he noticed that they were often glued to their iPhones and that was one of the reasons he bought into the company.
Another reason for his confidence in Apple is his trust in CEO Tim Cook. Buffett has lauded Tim Cook as one of the classiest CEOs that manages Apple in an extraordinary way.
2. Bank of America (BofA)
Warren Buffett bought into BofA during the US debt-ceiling crisis in 2011. The idea of investing in BofA came to Buffet while he was in the shower. After getting to the company’s CEO via a call centre, a deal was signed in less than 24 hours where Buffett agreed to inject $5 billion dollars into BofA.
3. Chevron
In 2022, Warren Buffett increased his stake in Chevron, in an attempt to capitalise on rising oil prices. Initially, he bought $20 billion worth of stock and now he owns $31 billion, making this his third-largest holding in his portfolio at 9%.
4. Coca Cola
“I’m happier when I’m eating hot fudge sundaes or drinking Coke.”
Apart from enjoying his drink, Buffett believed that Coca-Cola was a good company, had great value and could withstand competition. Coca cola has over the years expanded its market share and adopted new emerging trends which made Buffett confident in the company.
5. American Express
Warren Buffett realised that American Express had a great advantage over its competitors from its branding. American Express credit cards were positioned as a status symbol as compared to its then competitors – Diner’s Club.
Additionally, an opportunity emerged in 1963 for Warren Buffett to buy into American Express. A scandal involving futures and commodities had caused the company’s shares to be dragged down heavily. This gave Buffett a good buy in opportunity, ignoring the temporary scandal.
Sources:
https://www.barrons.com/articles/warren-buffett-apple-stock-iphone-6e07c7ab
https://www.fool.com/investing/2023/01/28/chevrons-profits-fall-short-is-this-top-warren-buf/
https://moneyminiblog.com/investing/warren-buffet-american-express-investment/
https://www.flickr.com/photos/sirenmedia/
https://pixabay.com/photos/apple-inc-mac-apple-store-store-508812/
https://www.marketing-interactive.com/bank-of-america-moves-hk-staff-to-sg
https://www.flickr.com/photos/funkyah/
https://www.flickr.com/photos/19779889@N00/
https://www.flickr.com/photos/evandidier/