Those are only temporary issues. More important, the company's long-term prospects remain strong. Apple's iPhone ecosystem is as sticky as ever. Its services business is especially gaining momentum. The increased adoption of high-speed 5G networks continues to fuel demand for the company's products. Over the next decade, I expect that augmented reality will become another major growth driver for Apple's ecosystem.
You can bet that Buffett isn't selling any of his Apple shares on the latest pullback. I wouldn't be surprised if he's instead buying more of the top stock in Berkshire's portfolio. Again, though, the snapshot of what the company has already done isn't nearly as critical as what its future prospects are.
And Mastercard's future still looks very bright, particularly with several new initiatives. Mastercard Installments puts the company at the center of the fast-growing "buy now, pay later" opportunity. The new service can be used anywhere across the Mastercard network, both online and in stores. The company's acquisition of CipherTrace bolsters its expansion of cryptocurrency services. Its pending buyout of European technology provider Aiia extends Mastercard's efforts in leading the way in open banking, which enables consumers and businesses to use their data to get financial services easily and securely.
These new products and deals reinforce the key role that Mastercard plays in the transition from cash to digital payments. Mastercard is a Buffett stock that you can buy in November and hold forever. Lowenstein describes how Warren took control of Berkshire Hathaway and cash-cowed its dying textile business in order to purchase stock in other companies. The book traces how Berkshire evolved into a holding company and how its investment philosophy evolved as Warren learned to look beyond financial data and recognize the economic potential of unique franchises like dominant newspapers.
For example, Warren likes to say that there are no called strikes in investing. Strikes occur only when you swing and miss. Warren says that in your lifetime you should swing at only a couple dozen pitches, and he advises doing careful homework so that the few swings you do take are hits.
Warren follows his own advice: When he invests in a company, he likes to read all of its annual reports going back as far as he can. He looks at how the company has progressed and what its strategy is. He investigates thoroughly and acts deliberately—and infrequently. Once he has purchased a company or shares in a company, he is loath to sell. Nor does he believe that great people help all that much when the fundamentals of a business are bad. Or is the moat shrinking?
Great businesses are not all that common, and finding them is hard. Unusual factors combine to create the moats that shelter certain companies from some of the rigors of competition. Warren is superb at recognizing these franchises. Warren installs strong managers in the companies Berkshire owns and tends to leave them pretty much alone. His basic proposition to managers is that to the degree that a company spins off cash, which good businesses do, the managers can trust Warren to invest it wisely.
Managers are expected to concentrate on the businesses they know well so that Warren is free to concentrate on what he does well: investing. My own reaction upon meeting Warren took me by surprise. Most people are quick to conclude that someone or something they encounter personally is exceptional. This is just human nature. Everybody wants to know someone or something superlative.
In fact, I was extremely skeptical when my mother suggested I take a day away from work to meet him on July 5, I mean, spend all day with a guy who just picks stocks? Are you kidding? Now, that caught my attention. While See's and Gillette are, on the surface, very different companies, Buffett recognized that both possessed the most valuable formula a company can achieve: profitable and timeless name-brand products.
Boxed candy has been a staple of American society for generations, and See's is such a well-loved product that the company saw growth even during the years of the Great Depression.
Gillette's shaving products serve a need that will never disappear, and its products have been found in homes throughout America and the world. Financially, both businesses reflect strategies that have proved to be successful. The cost of producing boxed candy has often been, like perfume, less costly than the packaging and marketing of the product. This translates into extraordinary profit.
And the razor blade business that Gillette pioneered and still dominates is the original example of the business model of giving away a larger, infrequently purchased product the razor to sell a smaller, repeatedly purchased product the disposable blades to customers for the rest of their lives.
This is known as the Razor-Razorblade model. The first step in replicating Buffett's investment strategy is to locate wonderful companies, as Buffett puts it, with long-term value and fairly priced stock. The next step is to get away from the sidelines and invest. See's was profitable before Buffett purchased it, just as Gillette was already known on Wall Street as a desirable investment. It is Buffett's willingness to put his cash down and hold these stocks for the long run that separates him from those who only watch and wait.
Buffett has described his strategy as the "Rip Van Winkle approach" after the main character of the famous short story by American author Washington Irving who falls asleep and wakes up 20 years later. Perfect timing is difficult if not impossible to achieve, but Buffett explains that "we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
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While brick-and-mortar retailers have struggled mightily over the past few years thanks in part to the rise of e-commerce, RH has found success catering to the upper crust.
That success has since been amplified by the COVID pandemic and a shift in where Americans have been putting their money to work. It's hard to tell whether this was an Oracle of Omaha buy, or a project of one of his lieutenants, Ted Weschler or Todd Combs.
Buffett has been mostly mum on RH. Still, the stake fits broadly with Buffett's worldview. Buffett stocks tend to be bets on America's growth, which is exactly what a bet on housing and housing-related industries is.
Verizon already looked at home in the Berkshire Hathaway portfolio. While BRK. B famously doesn't pay out a dividend, Buffett is happy to collect them.
Indeed, its ability to pay a healthy distribution puts it among the top dividend stocks for retirement investors. When Berkshire initiated its stake in Verizon in Q4 , it bought with both hands, picking up That was good for a 3.
Berkshire also remains the fourth-largest owner of VZ shares at 3. Bulls like Verizon for both its growth prospects in the era of 5G networking, its defensive characteristics and the reliable income stream it delivers to investors.
And in this case, Berkshire was much more aggressive about its second bite. But up until recently, they've never been a major factor in its equity portfolio. But that wind has changed direction over the past couple quarters, via both his MMC addition and Berkshire's lone new stake in Q1 , which we'll get to momentarily. As for Marsh McLennan: Berkshire initiated a 4.
It wasn't a major position, at just 0. Shares in MMC, which provides various risk, strategy and consulting services, are longtime market laggards. The company also pays a modest dividend yielding 1. Kroger operates roughly 2, retail food stores operating under such banners as Dillons, Ralphs, Harris Teeter and its namesake brand, as well as 1, gas stations and even jewelry stores under banners including Fred Meyer Jewelers and Littman Jewelers. Berkshire Hathaway turned a few heads during the fourth quarter of , when it initiated its But given what was to come, it now looks like a savvy pick.
Of course, as investors' focus started to shift away from essential retailers to opening plays, Kroger has underperformed. Buffett added 8. And he has followed that up with another Berkshire Hathaway is now the third-largest owner of Kroger shares, with its 6.
It's only a middle-of-the-pack position at just 0. But it certainly belongs. Unlike other recent new positions such as Amazon. As we mentioned previously, Buffett loves the insurance business — he just hasn't been too keen on owning mere equity stakes in them.
But in Q1, the industry accounted for two of his five buys, and his lone new position. Like most insurance firms, you won't necessarily expect profits to grow in a perfectly straight line year after year. But revenues have improved without interruption over the past four years, and net income is up in three of the past five years. That operational strength has led to superior returns against both the market and its peers.
Berkshire hasn't exactly bet the farm on Aon. The Best T. Rowe Price Funds for k Retirement Savers. Skip to header Skip to main content Skip to footer. Home investing stocks. The 21 Best Stocks to Buy for the Rest of Bancorp Getty Images. Get Dividends Every Month.
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