It’s hard to call Warren Buffett anything other than the king of investing. The company of the “Oracle of Omaha”, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has seen his shares become the S&P500 up more than 931% since 1998. Buffett and the late Charlie Munger made this epic success by focusing on quality and value. Here are three investment options from Berkshire Hathaway’s portfolio that I think are good long-term options for any investor.
Sometimes the easiest ways are the best ways. Everyone should have one S&P500-focused index fund in their portfolio, and the Vanguard S&P 500 ETF (NYSEMKT: VOO) fits the bill. Exchange-traded funds (ETFs) like this one focus on tracking the movements of the S&P 500. This Vanguard fund is a simple and easy way to gain broader exposure to large-cap stocks in the market.
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By simply investing in the market through a tool like this, investors have passively seen their stock price nearly double over the past five years. This is perhaps the simplest and clearest investment strategy there is. Even the best hedge fund managers often struggle to outperform the S&P 500, and an ETF like this should be part of any reasonable investor’s portfolio.
My dissertation for Moody’s Corp (NYSE: MCO) is simple. The bond credit ratings industry isn’t going away anytime soon, and Moody’s is pretty much at the top of the food chain. It has outperformed the S&P 500 by 22% over the past five years, and by a much wider margin over the long term, so Moody’s just makes sense. The credit giant has had a stellar 2024 so far, with revenue up 22% year-over-year and diluted earnings per share up 32% so far in the third quarter.
For the full year, Moody’s expects diluted earnings of $10.85 to $11.05 per share. On the conservative side of those expectations, the stock is admittedly a bit pricey at more than 40 times forward earnings, but when you have such a stable and integral business, it’s hard to overlook this stock.
American Express (NYSE:AXP) tends to offer a credit card for higher income consumers. That means the business will likely continue to thrive even if we see weaker consumer trends on a broader basis.
Beyond that niche advantage – but perhaps because of it – I like American Express for its strong annual growth rates and strong expectations for the remainder of 2024. This is a stable stock. You might not see the wild performance of something like that Nvidiabut this is a company that has beaten the S&P 500 by almost 28% over the past five years.
