Warren Buffet is perhaps the greatest living investor of our time. The CEO of Berkshire Hathaway has a net worth of more than $100 billion and has generated nearly $1 trillion in market value for Berkshire Hathaway shareholders.
Professional investors and fund managers around the world pay attention when Warren Buffet buys a stock. In this guide, we’ll take a look at 6 of Buffett’s best all-time stock picks.
Who is Warren Buffett?
Warren Buffett is the chairman and CEO of Berkshire Hathaway and the world’s sixth-wealthiest person. He’s often called the ‘Oracle of Omaha’ and is widely regarded as the most successful investor of all time.
Now 92, Buffett started his investing career in the 1960s. He bought Berkshire Hathaway, which was originally a textile company, in 1965. In 1972, he acquired See’s Candies for $25 million and it has gone on to generate more than $2 billion in profits. Other major companies acquired by Buffett through Berkshire Hathaway include the insurance company GEICO, the railroad company BNSF, and Dairy Queen.
Berkshire Hathaway also holds major stakes in numerous publicly traded companies. Many investors look to the company’s portfolio for investing ideas and guidance.
Warren Buffett’s Investment Style
Warren Buffett studied under Benjamin Graham, who is often considered the father of value investing. Buffett himself largely follows a strategy of investing in great companies at good prices, although he himself has pointed out that he’s more willing to take risks than his mentor Graham ever was.
Whole books have been written on Warren Buffet’s investment style. To greatly simplify his investment approach, Buffet looks for companies that have strong economic moats, intrinsic value that is greater than the company’s share price, and excellent economies of scale. Buffett is a long-term investor, and many of the top-performing stocks in the Berkshire Hathaway portfolio have been there for decades.
Warren Buffett Stock Picks
Some of Warren Buffett’s most successful investments have been acquisitions. Buffett purchased GEICO, for example, for $4.7 billion in 1995. Today, GEICO is worth an estimated $40-$50 billion.
However, Buffett has also had incredible success in buying shares of public companies. Here are 6 of Buffett and Berkshire Hathaway’s top stock investments.
Warren Buffet was originally thought by many analysts to be late to the game when he first purchased Apple stock in 2016. By that point, Apple was hardly considered a value stock, and it had been several years since the company’s iPhone and App Store had revolutionized the smartphone market.
However, Buffett’s bet was quickly proved correct. In 2016, Apple shares traded at an adjusted price of around $25. At the height of the tech boom in 2021, Apple shares traded at $165 per share – a 560% gain.
Buffett’s original 2016 Apple investment bought up 1.1% of the company’s shares. He continued to invest in Apple through 2019, at one point owning 5.7% of the company. At today’s prices, Buffett holds an unrealized gain of more than 300% in Apple, and Buffett’s total share is worth $126 billion.
Many analysts pointed to Coca-Cola as the Oracle of Omaha’s single best all-time investment. Berkshire Hathway bought 400 million shares of Coca-Cola from 1988 to 1994 at a total price of $1.3 billion.
At the time, that position represented a 7.2% ownership stake and entitled Berkshire Hathaway to $88 million in annual dividends. Thanks to Coca-Cola’s share buybacks and dividend increases, Berkshire Hathaway today holds a 9.4% ownership stake and earns $672 million in annual dividends from those same 400 million shares.
Coca-Cola’s share price has also grown 19-fold. Berkshire Hathaway’s original $1.3 billion position is now worth more than $24.2 billion.
Bank of America
Warren Buffett has taken two opportunities to buy Bank of America when the stock was down. In 2011, when the bank was still struggling from the aftermath of the financial crisis, Buffett took a $5 billion position in the bank. Then in 2020, when the stock market was still suffering from COVID-19 lockdowns, Buffett put another $2.1 billion in Bank of America stock.
Bank of America stock soared to a new all-time high in early 2022, bringing the total value of Buffett’s stake to more than $50 billion.
Warren Buffett first invested in American Express in 1963, before he even owned Berkshire Hathaway. He held positions in the company on and off from the 1960s to 1980s, before building a massive long-term stake in American Express shares from 1994-1998.
By 1998, Berkshire Hathaway owned 152 million shares of American Express, and Buffett has never sold off a single one. Today, Berkshire Hathway’s position represents a more than 20% ownership stake in American Express.
Berkshire Hathway’s American Express position cost around $1.3 to build. At current prices, it’s worth more than $27 billion – a more than 20-fold gain even before accounting for the stock’s generous dividend payouts.
Warren Buffet invested in credit ratings company Moody’s in 2000 and has held a total position of around 25 million shares ever since. The stock experienced a 6-fold increase by 2007, but was hit hard during the 2008 financial crisis. Still, even at the depths of the crisis, Buffett’s position was worth twice what he paid for it.
Buffett’s signature patience paid off, as today Moody’s trades at a share price of nearly $300 – representing a 2,500% gain from the stock’s price in 2000. Buffett’s holdings in Moody’s are today worth around $7 billion.
United Parcel Service
UPS was never one of Buffett’s largest investments, but it remains in the Berkshire Hathaway portfolio today and has performed admirably. Buffett first invested $113 million in UPS in 2006 and has been slowly selling off shares over the years. UPS now makes up around 0.01% of the Berkshire Hathaway portfolio.
Today, UPS trades at more than $180 per share, compared to Buffett’s cost basis of $79 per share in 2006. That represents a doubling in value, not to mention that UPS has consistently paid a dividend yield of more than 2.5% over the past decade.
Conclusion: Warren Buffet Stock Picks
Warren Buffet is one of the greatest investors of our time. His value-driven investment strategy has generated hundreds of billions of dollars in profit for Berkshire Hathaway. The Berkshire Hathaway portfolio continues to hold significant stakes in some of Buffett’s favorite companies, including Apple, Coca-Cola, Bank of America, and American Express.