What’s in Warren Buffett’s Portfolio? You’ll Be Surprised

You’ve probably heard somewhere that Berkshire Hathaway CEO Warren Buffet is hoarding a lot of cash. That’s true, but he never stopped holding stocks representing profitable American businesses.

Indeed, if Buffett is being extra choosy now, then the stocks he’s invested in must be high-conviction picks. Therefore, it’s worthwhile to periodically check Berkshire Hathaway’s stock holdings, especially the ones that make up large portions of Buffett’s portfolio.

Berkshire’s most recent Form 13F-HR filing is from February 14, so that’s the place to look for the most up-to-date info on what Buffett’s invested in. Just be aware that Berkshire Hathaway’s holdings could certainly vary from what was reported in February.

Buffett claims not to be a technology expert, but clearly, he’s not afraid to invest in a very famous tech company. More specifically Berkshire Hathaway’s largest portfolio holding is Apple stock; Buffett’s business owns 300 million shares, and this comprises 22.1% of Berkshire’s portfolio.

Despite Wednesday’s massive rally, Apple stock is still down significantly from its prior peak price. Quite possibly, Buffett is buying Apple shares on the dip, though there’s no way to prove this at the moment.

Courtesy: @InvestInAssets

You might be surprised to discover that Buffett is holding so many Apple shares, or that he’s invested in stocks at all amid the recent volatility. Yet, Buffett knows that there are always reasons to stay out of the stock market but over the long term, it’s better to stay invested.

Another major Berkshire Hathaway holding is American Express stock. Buffett’s company holds 151.6 million AmEx shares, and these shares constitute 14.5% of Berkshire’s portfolio.

Speaking of financial firms, Berkshire Hathaway also has 680.2 million shares of Bank of America stock, comprising 9.4% of Berkshire’s total holdings. That’s nearly one-fourth of Berkshire’s portfolio dedicated to just two financial-sector stocks.

I wouldn’t dare to try to read Buffett’s mind. However, if Berkshire Hathaway is so heavily invested in financial firms, this suggests that Buffett may expect the Federal Reserve to lower interest rates soon.

Or, it might be Buffett’s vote of confidence in the U.S. economy. On the other hand, if Berkshire Hathaway has a large cash pile, that’s definitely not a marker of confidence.

You might be tempted to go all in on cash right now, especially if you heard that Buffett has lots of dry powder. Plus, in case you hadn’t already noticed, volatility has been on the rise lately.

Courtesy: @sentimentrader

Sure, it’s been volatile, but volatility is supposed to bring opportunity. If you liked certain stocks before the trade war started, you should like them even more if they’re currently trading at lower prices.

Other significant Berkshire Hathaway holdings include Coca-Cola stock (10.9% of Berkshire’s portfolio), Kraft Heinz (3.6%), Occidental Petroleum (3.7%), and Chevron (6.2%). Evidently, Buffett continues to favor food stocks as well as oil-and-gas stocks.

What’s the common thread here? You may have detected that Buffett likes to invest in well-known, profitable firms that pay consistent dividends. Moreover, these businesses typically aren’t trading at high valuation multiples.

Thus, even when Buffett ventures into “Magnificent Seven” technology stocks, he’s sticking to Apple stock, a steady and reliable asset. You don’t see Buffett taking big chances on highly risky businesses.

There’s a lesson here, then, from the Oracle of Omaha. Buffett has dry powder ready for prime buying opportunities, sure, but he’s never fully out of the stock market and he plays defense by focusing on great businesses at good prices.