Warren Buffet was born in 1930 and bought his first stock at the age of 11. By 1965, he was running his own investment company called Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B)where he continues to solidify his legacy as one of the world’s greatest investors.
Berkshire has grown into a conglomerate with several wholly owned companies under its umbrella, in addition to a portfolio of 47 publicly traded stocks and securities.
Berkshire’s largest holding is Applewhich became the world’s first trillion-dollar company in 2018. Since then, Microsoft, Nvidia, Amazon, AlphabetAnd Meta-platforms have also reached this milestone.
Berkshire could soon be the first non-tech company in the United States to join them. Its stock has generated an incredible 19.8% compound annual return since 1965, putting the company at a valuation of $922 billion. Here’s why it could surpass the $1 trillion mark within a year.
Buffett uses a simple investment strategy
Buffett is a value investor, meaning he likes to buy great companies at an attractive price with the intention of holding them for the long term. Solid profitability, reliable growth, strong management teams, and shareholder-friendly programs such as share buybacks and dividend plans are just some of the attributes he looks for when deciding to invest.
Time is Buffett’s best friend, as he relies on the magic of compounding to build his wealth for him. There’s no better example than Berkshire’s investment in Coca-ColaBerkshire spent $1.3 billion buying shares of the beverage giant between 1988 and 1994, and still owns all of those shares today. That position is now worth a whopping $27.5 billion.
In addition to the huge capital gain, Berkshire received $736 million in dividends from Coca-Cola in 2023, and is set to earn an even larger amount this year!
Berkshire’s other long-term investments in American Express, Moody’s Corpand Apple (to name a few) are similar success stories.
Berkshire invests in high-quality businesses
Berkshire Hathaway was originally a textile company. It was on the verge of bankruptcy before Buffett stepped in to buy it in 1965, but he quickly realized he couldn’t save his legacy business, so he turned it into a holding company for his various investments.
Over the years, Berkshire has acquired entire companies like Duracell, GEICO Insurance, and Dairy Queen. Additionally, the conglomerate’s portfolio of stocks and publicly traded securities is worth $302.4 billion. As I mentioned above, Apple is the largest holding in that portfolio.
Berkshire has spent about $38 billion accumulating Apple shares since 2016, and despite selling more than half its position this year, its remaining stake is always worth more than $86 billion.
Bank of America and American Express are Berkshire’s second and third largest holdings. It also has significant stakes in energy companies Chevron And Occidental Petroleumworth $17.8 billion…
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