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Here are all of Warren Buffett’s 27 billion-dollar bets on Berkshire Hathaway’s $370 billion portfolio

For almost 60 years Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett has delivered outsized returns to his investors. While the benchmark S&P500 has gained just over 34,000%, including dividends paid, since the “Oracle of Omaha” took over as CEO of Berkshire in the mid-1960s, Buffett has overseen a total return on his Class A shares (BRK.A) that surpassed 5,100,000%, as of the closing bell on April 5.

Buffett’s secret to easily beating Wall Street’s major stock indexes isn’t actually a secret at all. For decades, he and his investment team—which, until his recent passing, included the affable “Architect of Berkshire Hathaway,” Charlie Munger—sought well-known, proven companies with clearly defined competitive advantages and exceptional management. ploughing.

Warren Buffett surrounded by people at Berkshire Hathaway's annual shareholder meeting.

Warren Buffett, CEO of Berkshire Hathaway. Image source: The Motley Fool.

But the other piece of the puzzle that doesn’t get nearly enough credit for Berkshire Hathaway’s long-term outperformance is Warren Buffett’s preference for portfolio concentration. Although his company’s $370 billion portfolio has holdings in 45 stocks and two index funds, the majority of invested assets are in a small number of companies.

Let’s take a closer look at all 27 companies in which Warren Buffett and his investment team have invested at least $1 billion of Berkshire’s capital.

Berkshire Hathaway’s seven core interests

There’s absolutely no doubt that the Oracle of Omaha and his closest associates, Todd Combs and Ted Weschler, prefer to pour a lot of money into their best investment ideas. As of the closing bell on April 5, nearly 81% of Berkshire’s $370 billion portfolio could be traced to seven core holdings:

  1. Apple (NASDAQ: AAPL): $153,564,865,800 in market value

  2. bank of America (NYSE: BAC): $38,329,137,943

  3. American Express (NYSE:AXP): $33,727,316,322

  4. Coca-Cola: $23,804,000,000

  5. Chevron (NYSE: CVX): $20,376,681,482

  6. Western petroleum (NYSE:OXY): $17,175,255,364

  7. Kraft Heinz: $12,068,026,355

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Tech stock Apple was described by Warren Buffett as “a better company than any company we own” at Berkshire’s annual shareholder meeting last May. In addition to exceptional branding, a loyal customer base and an unbeatable share buyback program, innovation has been the driving force of the company.

Apple’s iPhone is the clear leader in domestic smartphone market share, and CEO Tim Cook has overseen his company’s steady transition to a future based on subscription services. Subscriptions should allow Apple to generate higher operating margins and more consistent revenue during iPhone upgrade cycles.

These core holdings also demonstrate Buffett’s longstanding love of financial stocks, as well as his new preference for energy stocks.

The great thing about financial stocks like Bank of America and American Express is that they benefit from disproportionately long periods of economic growth. While recessions last only a few months, most expansions last several years. This allows Bank of America to grow its portfolio of interest income-generating loans over time, while American Express can double-dip and collect higher fees as a payment processor for merchants, as well as interest income from its cardholders.

The combined investment of more than $37 billion in Chevron and Occidental Petroleum appears to be a clear indication that Buffett and his team expect spot crude oil prices to remain above historical averages. Years of underinvestment of capital by major energy companies during the COVID-19 pandemic has led to tight global oil supplies. As long as this tightness continues, the high-margin drilling segments for Chevron and Occidental should benefit.

A diner in a cafe holding his credit card above a portable point of sale device.A diner at a cafe holding his credit card above a portable point-of-sale device.

Image source: Getty Images.

Warren Buffett’s Other Billion-Dollar Bets (and Potential Future Core Positions)

In addition to the Oracle of Omaha’s seven core bets, there are twenty additional holdings that currently have a market value of more than $1 billion. Some of these interests are well on their way to becoming core interests:

  1. Moodys: $9,682,147,772

  2. Mitsubishi (OTC: MSBHF): $8,210,607,679

  3. Mitsui (OTC: MITSF): $5,831,542,812

  4. Itochu (OTC: ITOCF): $5,300,908,992

  5. DaVita: $4,822,729,108

  6. Citi Group: $3,403,079,495

  7. Kroger: $2,865,500,000

  8. Sumitomo (OTC: SSUM.Y): $2,447,556,628

  9. Marubeni (OTC: MARUY): $2,425,730,018

  10. VeriSign: $2,407,028,434

  11. Visa (NYSE:V): $2,299,558,064

  12. BYD: $2,238,515,778

  13. MasterCard (NYSE:MA): $1,902,229,093

  14. Amazon: $1,850,700,000

  15. Capital one financial: $1,789,842,226

  16. Liberty SiriusXM Series C: $1,786,465,937

  17. Aon: $1,307,859,000

  18. Now Holdings: $1,283,283,032

  19. Ally financially: $1,113,020,000

  20. Charter communications: $1,024,203,428

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What is most striking about these ‘other’ billion-dollar bets is Warren Buffett’s confidence in the five Japanese trading houses: Mitsubishi, Mitsui, Itochu, Sumitomo and Marubeni. These are companies that somewhat mirror Berkshire Hathaway in that they control multiple aspects of their domestic (Japanese) economy, including food/consumer products, energy (oil/natural gas), and chemicals.

According to Buffett’s latest annual letter to shareholders, all five Japanese trading houses are expected to be long-time Berkshire Hathaway stocks, and all are trading at fairly low price-to-earnings ratios.

These multibillion-dollar bets also provide a broader scope of how much the Oracle of Omaha and his team favor financial stocks. While BofA and AmEx are the cream of the crop, there is significant representation (in dollar figures) of payment processors (Visa and Mastercard), credit service providers (Capital One Financial and Ally Financial), and big banks (Citigroup) in Berkshire’s $370. billion-dollar portfolio.

Visa and Mastercard are perhaps the most stable growth stocks in which Berkshire Hathaway has interests. While they both benefit from extended periods of domestic and global expansion, their avoidance of lending and sole focus on payment facilitation is what makes them so great.

Because neither Visa nor Mastercard lend money, neither company is forced to set aside capital to cover credit losses and/or delinquencies during recessions. This financial flexibility allows both companies to recover quickly from an economic downturn.

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At the end of Berkshire’s billion-dollar bets, you can also see the undeniable influence of Combs and Weschler creeping in. For example, Berkshire’s $1.85 billion position in e-commerce titan Amazon isn’t Buffett’s fault. On the contrary, Combs and/or Weschler built this position. Although on rare occasions Buffett will deploy his company’s capital into high-growth companies, looking for simple value stocks has long been his area of ​​expertise.

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American Express, Ally, Bank of America and Citigroup are advertising partners of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sean Williams has positions in Amazon, Bank of America, Mastercard and Visa. The Motley Fool holds positions in and recommends Amazon, Apple, BYD, Bank of America, Berkshire Hathaway, Chevron, Mastercard, Moody’s, VeriSign and Visa. The Motley Fool recommends Kraft Heinz, Kroger, Nu Holdings and Occidental Petroleum and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

Here are all of Warren Buffett’s 27 billion-dollar bets on Berkshire Hathaway’s $370 billion portfolio, originally published by The Motley Fool

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