CEO Greg Abel made a major housecleaning of Berkshire Hathaway's (BRK.B) stock portfolio in the first quarter. The holding company, of which Warren Buffett remains chairman, initiated stakes in Delta Air Lines (DAL) and Macy's (M) and added to some other key positions. The big news, however, was a mass exodus from more than a dozen holdings.

Abel now oversees Berkshire's equity portfolio, although Buffett keeps his hand in and plays a key advisory role. Investment manager Ted Weschler also continues to manage perhaps 5% of Berkshire's stock investments.

But the late-2025 departure of former co-portfolio manager Todd Combs — now at JPMorgan Chase (JPM) — has at least partly contributed to Berkshire's holdings getting a fresh new look. Several names thought to have been Combs' picks are no more.

At any rate, Berkshire was very busy during the first quarter. In what was perhaps a nod to stretched valuations, it was once again a net seller of stocks. The company bought $16 billion worth of equities and sold $24 billion. Berkshire has now sold more stocks than it has bought for 14 consecutive quarters. Net sales amounted to $8 billion, up from net sales of about $4 billion in the previous three-month period.

In the past three years, Berkshire sold more than $200 billion worth of equities. However, the company did begin buying back its own stock under Abel after halting repurchases in May 2024.

With a market cap of more than $1 trillion, Berkshire maintains a sort of "barbell" portfolio, as it holds approximately $280 billion in stocks and more than $380 billion in cash.

Although Berkshire has become more cautious, it did do some shopping in Q1. In addition to buying Delta and department-store operator Macy's, the holding company increased stakes in three of its holdings.

On the other hand, Berkshire pared back bets on six positions — and closed out 16 others.

Before we get into Berkshire's most recent purchases and sales, it's important to know that Buffett always ran a highly concentrated portfolio.

Excluding the company's Japanese brokerage stocks and other overseas equities, Apple (AAPL) alone accounts for more than a fifth of Berkshire's stock portfolio. (That's down from more than 40% at its peak.)

Furthermore, Berkshire's top five U.S. equity holdings comprise about 67% of its portfolio value, while the top 10 account for 90%.

As Buffett likes to say, diversification is for those who don't know what they're doing.

Stocks that Berkshire is buying

Buffett famously avoided airlines for decades. When he finally did come around, his timing was terrible, spreading his bets among a handful of major carriers not too long before COVID-19 set the industry into a tailspin. As a result, he quickly closed out those positions.

It's a mark of change that Berkshire initiated a stake in Delta in Q1, buying 39.8 million shares worth $2.6 billion. With a portfolio weight of a bit more than 1%, the air carrier is Berkshire's 14th-largest holding.

Berkshire also made a bet on the consumer discretionary sector, picking up 3 million shares in Macy's. The tiny position in the department store operator was worth $55 million as of the end of Q1. At less than 0.1% of the portfolio, M stock is Berkshire's 27th-largest investment.

More interesting, Berkshire more than tripled its stake in Google parent Alphabet (GOOGL). The holding company now owns 54 million shares worth $15.6 billion as of the end of Q1. With a weight of 5.9%, the Google parent's Class A shares are Berkshire's seventh-largest U.S. equity holding. Berkshire first bought GOOGL in the third quarter of 2025.

Relatedly, Berkshire initiated a stake in Alphabet Class C (GOOG) stock, picking up 3.6 million shares during the first three months of the year. With a value of $1 billion, the Class C investment accounts for Berkshire's 19th-largest holding.

In another vote of confidence in an existing position, Berkshire tripled its holdings of The New York Times Co. (NYT), adding another 10 million shares during Q1. With a market value of $1.3 billion, or 0.5% of the portfolio, NYT is Berkshire's 17th-largest investment — up from 30th place when it first bought the stock at the end of 2025.

Berkshire also added to homebuilder Lennar (LEN), an investment Berkshire initiated last year. The holding company bought another 3 million shares to bring its total stake to 10 million. With a market value of $877 million, LEN accounts for 0.3% of the portfolio, or the 21st-largest investment. Berkshire picked up more Lennar Class B (LEN.B) stock, as well. However, at less than 0.1% of the portfolio, it's essentially immaterial to a company of Berkshire's size.

Stocks Berkshire is selling

Berkshire reversed course on Chevron (CVX) in Q1, cutting its position in the integrated oil major by 35%. After boosting its stake in Q4, the holding company sold 46 million shares to start the year. Berkshire, which has owned the Buy-rated Dow Jones stock since the fourth quarter of 2020, still owns more than 84 million shares worth $17.5 billion as of quarter's end. With a weight of more than 6.6% in the portfolio, CVX remains Berkshire's fifth-largest holding.

In another reprise from previous quarters, Buffett once again sold Bank of America (BAC) stock, which has been a major holding since 2017. Don't panic, though. Berkshire reduced its investment in the nation's second-largest bank by assets by less than 1%.

With 513 million shares worth more than $25 billion as of March 31, BAC slipped one place, to Berkshire's No. 3 holding.

In other sales, Berkshire continued to ease up on DaVita (DVA), its 11th-largest holding, this time 5%. The company also massively reduced exposure to Constellation Brands (STZ), a stake it initiated at the end of 2024, by 95%.

Elsewhere, Berkshire cut its stakes in Liberty Live Holdings (LLYVK) and Nucor (NUE), but with portfolio weights of less than 1%, respectively, these names don't move the needle.

The biggest changes came in the form of exits. After slashing its stake by 77% last quarter, Berkshire closed out its position in Amazon.com (AMZN).

Several other familiar names were also banished from the portfolio. Apparently, Berkshire is no longer a fan of payments processors, having exited its stakes in both Visa (V) and Mastercard (MA). The holding company owned both stocks since 2011.

Also getting the boot were Charter Communications (CHTR), Diageo (DEO), UnitedHealth Group (UNH), Domino's Pizza (DPZ), Heico (HEI), Lamar Advertising (LAMR), Formula One Group (FWONK), Atlanta Braves Holdings (BATRK), Pool Corp. (POOL), Allegion (ALLE), Aon (AON), Liberty Latin America Class A (LILA) and Liberty Latin America Class C (LILAK).

The bottom line on Berkshire's holdings

While the Visa and Mastercard exits represent significant changes, Abel cleaned up a slew of mostly immaterial bets Berkshire picked up in the past few years. While the portfolio remains top-heavy, its concentration is now weighted more to its top 10 holdings, with less exposure to the top five.

It's a new era, indeed.

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Berkshire Hathaway (BRK.B) CEO Greg Abel doesn't sound as if he intends to mess with the success that Warren Buffett and the late Charlie Munger built over more than six decades.

That said, the holding company's new chief likely won't have the same kind of leeway with the market that his predecessor did. Under Buffett, Berkshire's returns nearly doubled those of the S&P 500 since 1965, with a compound annual growth rate of 19.7% vs 10.5% for the benchmark index. When you generate that sort of outperformance, folks tend to give you the benefit of the doubt.

That's why it makes sense that Abel has publicly committed to maintaining Buffett's way of doing things.

"Berkshire's culture and values form the basis of our operating framework, which shapes the strategy we pursue and the choices we make as we build Berkshire," Abel wrote in his first letter to shareholders (PDF), released in February. "As CEO, the framework governs how I lead every day."

Besides, it's not as if Buffett has retired. The Oracle of Omaha remains chairman of the sprawling conglomerate of 68 subsidiaries and its $300 billion stock portfolio. Buffett still comes to the office five days a week and remains available to consult on operations, dealmaking and investment ideas, Abel notes.

How Abel might lead Berkshire

Make no mistake, however: This is Abel's show. He will oversee the entire Berkshire stock portfolio, supported by investment manager Ted Weschler. Todd Combs — who previously managed a portion of the portfolio alongside Weschler — departed in late 2025 to run money at JPMorgan Chase (JPM). Weschler and Combs were thought to oversee 10% of the firm's equity holdings.

In perhaps a nod to stretched valuations, Berkshire was once again a shedder of stocks in its most recent quarter, with net sales of approximately $4 billion. The holding company has now sold more stocks than it has bought for 13 consecutive quarters.

Otherwise, it should be business as usual. Berkshire has always let the management teams of its subsidiaries work independently. Abel said that won't change.

"We operate a decentralized model with autonomy grounded in deserved trust," the CEO wrote. "In return, we expect accountability and integrity in performance."

What about dividends and repurchases?

Berkshire's policy of not paying a dividend will likewise continue, Abel said. Buffett famously loves receiving dividends but has refrained from disbursing them himself. Berkshire shareholders incur taxes on dividends. More important, Berkshire has been able to generate superior returns by re-investing the cash it would otherwise spend on payouts.

Abel also indicated that he'll maintain Buffett's attitude toward stock repurchases. He'll buy back Berkshire stock if its price trades below its intrinsic value. What constitutes the company's estimate of intrinsic value has always been something of a secret sauce, but the level was triggered after a rough start to 2026.

After not buying any of its shares since May 2024, Berkshire resumed stock repurchases in March 2026. Moreover, Abel personally bought $15.3 million of Berkshire stock, committing to invest his entire after-tax salary in the company going forward.

One of Abel's biggest challenges will be what to do with Berkshire's massive pile of cash. Analysts note that the company would like to put some of its hoard to use in acquisitions, but finding large enough deals is a persistent challenge. In 2023, Buffett lamented that there were only a "handful of companies in this country capable of truly moving the needle at Berkshire, and they have been endlessly picked over by us and by others."

Argus Research analyst Kevin Heal thinks Berkshire will remain patient and opportunistic with its riches.

"We continue to believe that some of the company’s $369 billion in cash will eventually be used to invest in a 'distressed' situation, either an industry or individual company similar to what BRK did during the last economic crisis," says Heal, who rates shares at Buy.

What could Berkshire's performance look like going forward?

Berkshire Hathaway has always been a long-term bet on the dynamism of the U.S. economy. It's also a low-beta stock, which means it tends to underperform in bull markets and outperform in downturns.

Regardless of what a post-Buffett Berkshire looks like, shares are highly unlikely to match their historical performance. True, BRK.B beats the S&P 500 in the past 20 years, but only by a slight margin.

The reality is that Berkshire is now so big — its market cap exceeds $1 trillion — that it's unreasonable to expect anyone to repeat Buffett's historic run.

However, that doesn't mean BRK.B can't continue to be a market beater going forward. Wall Street is mostly bullish on the name, giving it a consensus recommendation of Buy, according to data from S&P Global Market Intelligence.

Nevertheless, Berkshire's era of generating truly outstanding returns would appear to be behind it.

That was true even before Buffett left the main stage.

The bottom line is that Berkshire Hathaway is no longer a vehicle for extraordinary outperformance. Rather, it's evolved into something closer to a fortress of capital.

Under Abel, investors shouldn't expect Buffett-like results, but they can still expect disciplined decision-making, downside protection and steady, if unspectacular, compound returns.

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Warren Buffett, 95, the so-called Oracle of Omaha, is set to step down by year-end as CEO of investment company Berkshire Hathaway. Over 60 years, he and his deputy, Charlie Munger, who died in 2023 at the age of 99, produced outstanding investment returns that made other investors’ returns pale in comparison.

Look at the numbers: From 1965, the year Buffett took over a struggling textile company, through the end of 2024, Berkshire’s shares rose 5,502,284%. That’s an annual compounded return of 19.9%. Over the same six decades, the S&P 500 index rose just 39,054% or 10.4% annually.

“Buffett is the most legendary investor in the history of investing,” says Adam Patti, CEO of exchange-traded fund company VistaShares. “And he has changed the way people invest.”

Now the question is which investor will take over as king or queen of investing. Whoever that will be will have some large boots to fill.

The long view

Long before taking over Berkshire Hathaway, Buffett was learning. His investing journey began early. He purchased his first stock at the age of 11, buying three preferred shares of Cities Service, a utility and oil company, and making a profit of around 5%. (Note: A basic element of Buffett’s investing strategy is to buy and hold, as he says, “forever.” Cities Service eventually became part of Occidental Petroleum, of which Berkshire is the largest shareholder.)

Years later, after studying at Columbia University under the legendary Benjamin Graham, who pioneered the concept of “value investing,” and earning a master’s degree, Buffett created the Buffett Partnership investment firm in 1956. Nine years later, Buffett went on to lead Berkshire Hathaway with the intent of converting it into a diversified holding company. Munger joined up in 1978. They ditched the textiles business in 1985 to focus on buying well-run businesses and taking big stakes in public companies.

The magic of Buffett and Munger's investment philosophy was simple in theory. “The best way to summarize what Buffett did, was to be patient and be prudent,” says Cathy Seifert, an equity analyst at research company CFRA. “Those two attributes served him well, and they weren’t so radical.”

That long-term view differed from many investors who looked for short-term gains, much like a professional market trader. Patti dubs it “rapid fire trading.” While that might work for Wall Street pros, it tends to be a losing strategy for amateurs.

When Berkshire bought controlling interests in companies, it did so with the radical idea of keeping the founders and other existing managers, Seifert says. Corporate takeovers typically involve firing top management and replacing them with executives from outside the company.

Plenty of cash

Berkshire has also benefited from holding insurance companies that generate massive cash flows each year, allowing it to buy more stock holdings, Seifert says.

Famously, Buffett would only buy companies that he understood. He passed on those that he didn’t understand. In line with a cautious approach, he famously said, “Buy when there is blood in the streets.” The idea is to purchase shares at low prices and avoid paying more than the underlying value of any investment.

Although Buffett plans to remain as chairman of Berkshire’s board, by the end of this month, Greg Abel, 63, a Canadian who has a background in the energy business, is expected to take over as CEO and the running of the company. It’s unknown how, or if, Abel will change Berkshire’s investment strategy.

New faces coming up

But a bigger question may be who will be the pretenders to the Wall Street throne as the record-breaking Wall Street investor?

The names that pop up are those who have forged their career and steeled their resilience in the financial markets. The following Wall Street veterans look like probable contenders.

Bill Ackman, known as an activist investor who founded Pershing Square Capital Management. In the last decade, Pershing’s total return was 153% or almost 10% annually, according to Stockcircle.

David Tepper is famous for running a hedge fund and is an expert on distressed debt. Returns of the last 10 years totaled approximately 225% or 12.5% a year, according to Stockcircle.

Ray Dalio founded Bridgewater Associates in 1975. His skill is not in doubt, but the annualized returns of the Bridgewater Associates Portfolio over the last 10 years have been modest, at around 5.4%, according to Stockcircle.

Daniel Loeb, a well-known investing activist and founder of Third Point Management, is also a successful hedge fund manager. Annualized returns of the last decade through 2024 were 5.2%, according to data from Third Point Investors.

Cathy Wood is famous for taking big bets in her Ark Invest tech-focused portfolio and promoting her investing philosophy on TV. The ARK ETF produced annualized total returns of 17.8% over the last decade, according to Morningstar data.

However, George Soros may take the cake for investing if he can be persuaded to do so. He’s the founder of the Quantum Fund and still advises it. The fund returned annual gains of 30% a year between 1970 and 2000, including a 1992 windfall when Soros famously shorted the British pound.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.

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When it comes to retirement advice, it doesn’t get better than Warren Buffett. The billionaire CEO of Berkshire Hathaway and one of the most successful investors worldwide is known for espousing sage advice on everything from investing to retiring.

He should know a thing or two about it. The 95-year-old has amassed a fortune, earning a cult-like following among investors who favor his value approach to investing.

Over the years, Buffett has shared his knowledge and wisdom in his company’s annual shareholder reports, at Berkshire's annual retreats, and during addresses to universities, institutions and think tanks. His advice is too plentiful to list, but here are some of Buffett’s gems that all retirees should live by.

7 Warren Buffett Quotes Retirees Should Live By

1. “Too often, a vast collection of possessions ends up possessing its owner. The asset I most value, aside from health, is interesting, diverse, and long-standing friends.”
-My Philanthropic Pledge

Retirement doesn’t mean people stop collecting stuff, but Buffett wants us to focus elsewhere. Instead of seeking to acquire new things, we can focus on maintaining our health and nurturing friendships.

The Harvard Longevity Study, the longest-running study of adult life, concluded that good relationships are the strongest predictors of health and happiness, more so than career achievement, exercise, or diet.

2. "Investors should remember that excitement and expenses are their enemies."
-Berkshire Hathaway 2004 Annual Report

This is particularly important for retirees who are in the drawdown phase. Their portfolios should be focused on stable investments, not the hottest stocks or trends. Buffett is warning that excitement can lead to selling low and buying high.

Another risk: expenses. Every dollar a retiree pays in fees is one dollar less that can be used in retirement. That’s why Buffett prefers low-cost index funds and ETFs over actively-managed funds.

3. "Our favorite holding period is forever."
-Berkshire Hathaway 1988 Annual Report

Know when to hold 'em. Buffett certainly does — forever. With this quote, the "Oracle of Omaha" is advocating for investors, even retirees, to invest for the long term.

Retirement can last twenty-plus years, which means your savings have to continue to grow. The bucket rule of spending is one way to make sure it does that.

4. “Be fearful when others are greedy and greedy when others are fearful.”
-Berkshire Hathaway 2004 Annual Report

FOMO is real, especially when it comes to investing. Nobody wants to miss out on the next tech boom or crypto craze. But you also don't want to overpay, and that’s what Buffett is warning about.

If everyone is chasing the stock, it may be time to cash out. If everyone is selling, it may be time to buy more. In essence, Buffett is preaching a strategy of selling high and buying low.

5. “When you get to my age, you’ll measure your success in life by how many of the people you want to have love you actually do love you.”
-Terry College of Business at the University of Georgia, 2001

For many people, their social and emotional well-being is tied to their work. After all, they've spent decades honing their trades. But that no longer matters in retirement. It's the relationships that are the true measure of success, in Buffett’s opinion.

Creating, fostering, and maintaining those relationships becomes the focus rather than making money. Buffett suggests happiness doesn’t come from how much money you have, but from whether the people you love love you back.

6. “Predicting rain doesn’t count; building the ark does."
-Berkshire Hathaway 2001 Annual Shareholder Report

If this year has taught retirees anything, staying the course tends to win out. It was true after the Great Recession in 2008 and 2009, during COVID and the big sell-off in 2024.

With this quote, Buffett is urging retirees to ignore market movements and stick to their long-term plans. The idea is to build a resilient retirement plan or an "ark" that will protect your money in downturns, so you don't have to worry about it.

7. "Ultimately, there's one investment that supersedes all others: Invest in yourself."
-Warren Buffett essay in Forbes, Sept. 20, 2017

Retirement isn't the end of the line; it's the beginning of your next chapter, which is why it's essential to continue paying attention to your health and well-being. You could live twenty or thirty years in retirement, so make the best of it by investing in yourself.

Just like you have a plan for your retirement savings, have one for your body and mind. How will you ensure you get exercise, purposefully spend your time, and nourish your mind? Those are all investments that Buffett believes matter more than anything else.

Buffett's notable quotables

This is just a small sampling of the words of wisdom Buffett has shared with the world in the years he has been investing.

Known for his modest and frugal approach to life, retirees can learn a thing or two from the legendary “Oracle of Omaha.”

Editor's note: This article is part of an ongoing series featuring the best retirement quotes and wisdom from top financial experts, leaders, and public figures. Other articles feature Michael Jordan, Mark Cuban, Jimmy Buffett, Dr. Seuss, Bruce Springsteen, Bob Dylan, Vince Lombardi, Dolly Parton, Ozzy Osbourne, Stevie Nicks, George Carlin, Billy Joel and Dave Ramsey.

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When a CEO is in his nineties, you'd think investors wouldn't be caught off guard when he says it's time to hang it up. But Mr. Market seems to be displeased by Warren Buffett's announcement in May that he would hand over the reins at Berkshire Hathaway (BRK.B) at the end of 2025. (Buffett, who turned 95 on August 30, will remain as chairman.)

Since that day, Berkshire's "B" shares have fallen 12.6% — even as the broader market notched new highs, with the S&P 500 Index returning 11.8%. (Prices and returns are as of July 31, unless otherwise noted.)

You may be wondering if there's an alternative to a post-Buffett Berkshire. A few Berkshire Hathaway clones are on the market — firms with insurance at their core and portfolios of businesses and stocks built for long-term returns. Some funds either explicitly or implicitly follow the Warren Buffett way.

We looked at some of the options below. Fair warning: Replacing Buffett may be as difficult for your portfolio as it is for Berkshire.

Very little of the Berkshire transition was a surprise. Buffett has had stock-picking help for some time from Berkshire execs Ted Weschler and Todd Combs.

And Greg Abel, the man Buffett tapped as the next CEO, was first named a potential successor in January 2018. But Abel built his career as an energy executive, not a portfolio builder.

That seems to have spooked Buffett acolytes, who wonder whether Berkshire's magical long-run returns — a compounded 19.9% from 1965 through 2024 — can continue.

"Buffett is able to take his huge balance sheets and turn $1 into $2," says Vitaliy Katsenelson, a money manager and author of The Intellectual Investor. "I don't know how good Greg Abel is."

That sums up the uncertainty. But Buffett boosters suggest shareholders should remain patient.

Christopher Bloomstran, a St. Louis–based money manager, does not believe the stalled stock price "has anything to do with the likelihood that Greg is not going to do a bang-up job. I think he will. I think he's absolutely phenomenal."

Buffett's Canadian counterpart

Though Abel was born in Alberta, the man widely called "the Canadian Warren Buffett" is 75-year-old Prem Watsa, who founded insurer Fairfax Financial (FRFHF) in 1985 and serves as its chairman and CEO.

The stock trades over the counter in the U.S., and on the Toronto Stock Exchange (FFH), accessible via some brokers, including Fidelity, Interactive Brokers and Schwab. In either case, charges may apply.

With a $39 billion market value, Watsa's company has developed a similar — albeit smaller — following to Berkshire's. The Fairfax annual meeting is a multiday affair that attracts value-oriented investors from Canada and other countries.

A fan blog, the Corner of Berkshire & Fairfax, is dedicated to value investing forums and discussion of the similarities between the two companies.

Fairfax's results suggest why: The company's book value per share increased an average 18.7% per year from 1985 to 2024, while the share price increased at an annualized rate of 19.2%.

Watsa may be even more of a bargain hunter than Berkshire, and that has occasionally led to picking losers. Fairfax's portfolio has muddled along for years with a large position in BlackBerry (BB), the mobile-phone pioneer that has struggled to reinvent itself.

Fairfax has had some winners recently, though. A large position in Canadian steelmaker Stelco paid off handsomely when Cleveland-Cliffs (CLF) bought the company in 2024. Fairfax's one-third stake in Greece's Eurobank increased in value from $2.3 billion at the end of 2023 to $3.2 billion on March 31.

Stephen Boland, an analyst at brokerage Raymond James, says Fairfax is one of the most diversified insurers, both in the number of countries in which it operates and in the lines of insurance it sells.

The company is "still exposed to California wildfires — it took a big loss for that in 2024 — but it has tended to diversify the business really, really well on the insurance side," says Boland, who recommends the shares.

With what he believes was a "stellar" second quarter for the company's investment portfolio, the stock is his top pick in the Canadian insurance sector. It trades at about 10 times earnings for the year ahead, according to S&P Global Market Intelligence.

Berkshire Hathaway's insurance operations largely target consumers — its Geico subsidiary causes some analysts to categorize Berkshire as an auto insurer.

Markel (MKL), by contrast, is a "specialty insurer," with sophisticated customers. It sells products such as collectible-car insurance, liability policies for corporate boards of directors, and insurance against damage to offshore oil rigs.

Like Fairfax, Markel has encouraged comparisons to Berkshire. For 35 years, the company, headquartered in Virginia, has held a brunch in Omaha on the weekend of the big Buffett bash. More than 2,500 people reportedly attended the 2025 event.

Over the past 38 years, the company's share price has increased at an annualized rate of roughly 15%.

Berkshire stock is the single largest holding in Markel's portfolio, accounting for $1.7 billion worth of assets on March 31 — three times the size of the second-largest position. Alphabet (GOOGL), Brookfield (BN), Deere (DE) and Amazon.com (AMZN) round out the top five, with each position worth about $400 million to $500 million.

Markel's portfolio of stocks, like Berkshire's, accounts for a heavier proportion of assets than for most insurers, which tend to focus on bonds. A separate division, Markel Ventures, holds 100% ownership in 20 companies, many of which are manufacturers.

Analysts say they like Markel in the long run, but a recent spike in the shares, coupled with underwhelming insurance results, has cooled them on its near-term performance.

Activist investor Jana Partners disclosed in December 2024 it had taken a stake in Markel and wanted the company to spin off its ventures unit so that it would be a more attractive takeover target for a conventional insurer.

The Jana news boosted Markel's stock price, and it trades at about 20 times earnings for the year ahead, according to S&P. Just one of seven analysts who cover Markel rate it a Buy.

Given depressed profits, "I think they're trading kind of where they should be now," says analyst Robert Farnam, of investment firm Janney, who has a Hold rating on the shares.

But the stock may have appeal for investors who buy on dips or who have a long enough time horizon. "I consider Markel to be a terrific long-term investment," says Farnam. "This is the type of stock that you basically put into retirement accounts and forget about."

Loews (L) has an insurance company at its core and owns multiple businesses, including hotels and an energy pipeline company, so it, too, has drawn comparisons to Berkshire. But in many ways, Loews is more of a family conglomerate.

Benjamin Tisch, named CEO this year, is the third generation of his family to run the company, a component of the S&P 500, and members of the Tisch family own roughly 20% of the stock.

"Even though Loews is in the 500, there's low investor interest" because of the Tisches' outsize stake, says Catherine Seifert, an analyst with CFRA who stopped covering the company more than two years ago. "And they're not as diversified as Berkshire anyway. Honestly, if you want to replicate Berkshire, you're probably better off doing it with a series of exchange-traded funds."

Following Buffett's path

There are a handful of ETFs that explicitly follow Berkshire; but with the Buffett premium seemingly dissipating at Berkshire, you might be better off looking for other funds that incorporate Buffett-esque investing principles, such those focused on companies that enjoy wide "moats," says Aniket Ullal, head of ETF research and analytics at CFRA.

When Buffett explains his desire to invest in businesses with a long-term competitive advantage, he has long used the word moat, as in a waterway that surrounded castles of the Middle Ages.

A moat keeps potential competitors away from your business — in economic terms, it's called a barrier to entry. Berkshire's wholly owned subsidiary BNSF Railway, for example, has a moat: Only four major railroad companies remain in the U.S., and the probability that a new one will try to lay thousands of miles of track to compete is nearly zero.

The largest and oldest moat ETF is the VanEck Morningstar Wide Moat ETF (MOAT), which tracks the Morningstar Wide Moat Focus Index. The 52 companies in the index as of May 31 were the cheapest of what Morningstar considers wide-moat stocks, based on their discount to the research firm's estimate of their fair value.

The ETF's top three holdings at last report were Estée Lauder (EL), military shipbuilder Huntington Ingalls Industries (HII) and Allegion (ALLE), an industrial security firm.

Compared with similar funds, the portfolio is overweight in health care and consumer staples stocks and has less invested in consumer discretionary and financial services names, according to Morningstar.

In a market that has seen years of exuberance for high-growth names, however, the fund's philosophy has had a mixed track record. It returned 7.5% over the past 12 months, compared with 16.3% for the S&P 500.

Four times in the past decade, it has been in the top 6% of its fund category (U.S. large-company stocks with a blend of growth and value characteristics). But it had a poor 2024, ranking in the bottom 5%. The fund's expense ratio is 0.47%.

Another approach is to zero in on funds that focus on metrics that typically point to the kind of high-quality companies that Buffett favors.

We prefer the JPMorgan U.S. Quality Factor ETF (JQUA), a member of the Kiplinger ETF 20, the list of our favorite exchange-traded funds. The fund tracks an index that sifts for companies that meet 10 criteria, including measures of profitability such as strong earnings and cash flow; financial risk (low debt, high interest coverage, low share-price volatility); and earnings quality (consistent accounting practices).

It has returned 13.6% over the past 12 months, and its 0.12% expense ratio makes it one of the cheapest funds of its kind. Top sectors are technology, financial services and consumer discretionary stocks. Nvidia (NVDA) was the fund's top holding at last report. Berkshire Hathaway places in the fund's top 10.

Then again, perhaps you should follow Buffett's own investment advice for individual investors. In 1994, he told shareholders that by "periodically investing in an index fund, a know-nothing investor can actually outperform most investment professionals."

At Berkshire's 2020 annual meeting, he elaborated: "In my view, for most people, the best thing to do is to own the S&P 500 index fund. People will try to sell you other things because there's more money in it if they do." He has specifically suggested the low-cost Vanguard S&P 500 ETF (VOO), with an expense ratio of 0.03%.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Stocks were choppy Thursday as the government shutdown continued for a second straight day, with no sign of resolution in sight. Still, the three main indexes managed new record closing highs thanks to strength in the technology sector.

At the close, the tech-heavy Nasdaq Composite was up 0.4% to 22,844, the broader S&P 500 had gained 0.06% to 6,715, and the blue-chip Dow Jones Industrial Average was 0.2% higher at 46,519.

Technology was one of just three S&P 500 sectors that advanced Thursday, with its gains supported by several mega-cap semiconductor stocks. On Wednesday, OpenAI said it inked deals with South Korea's Samsung Electronics and SK Hynix to secure chips and build data centers for the ChatGPT parent's Stargate project.

Nvidia (NVDA), for one, added 0.9%, which made it one of the best-performing Dow Jones stocks. Advanced Micro Devices (AMD) jumped 3.5%, while Broadcom (AVGO) added 1.4%.

Berkshire buys OxyChem for $9.7 billion

Elsewhere on Wall Street, Warren Buffett's Berkshire Hathaway (BRK.B) said Thursday that it will buy OxyChem, Occidental Petroleum's (OXY) petrochemical segment, for $9.7 billion in cash.

This marks Berkshire's largest acquisition since 2022, when it bought insurance firm Alleghany for $11.6 billion, and could be the last for Warren Buffett before he retires as CEO of the holding company at year's end.

Berkshire already has substantial exposure to Occidental Petroleum. Indeed, OXY was the seventh-largest position in the Berkshire Hathaway equity portfolio at the end of Q2, with Buffett & Co. owning roughly 265 million shares. BRK.B also holds preferred shares of the energy firm, as well as warrants to purchase common stock.

BRK.B stock slipped 0.5% on the news, while OXY plunged 7.3%.

The government shutdown continues

Wall Street received no encouraging news on the shutdown Thursday. U.S. Senators are on break today in observance of Yom Kippur. The soonest a funding bill could be voted on is tomorrow.

Prediction markets such as Kalshi and Polymarket show traders are anticipating the shutdown dragging on for another two weeks or so, which could put a dent in economic growth.

"On average, real quarterly GDP growth has increased 2.2% during periods of government shutdowns and risen over the past six government shutdowns, indicating a limited economic spillover." says Monica Guerra, head of U.S. Policy at Morgan Stanley Wealth Management.

But Guerra adds that "economic effects could be magnified this time" considering it is a full shutdown vs a partial one. Additionally, "federal job cuts could be higher than usual."

Private economic data underscores a weak labor market

The delay of economic data due to the shutdown is a pressing issue for Wall Street – especially with a key Federal Reserve meeting on the horizon.

For those wondering, the next Fed meeting, scheduled for October 28-29, will still proceed as planned, even if the shutdown continues through the end of the month. The Fed is an independent agency and is not impacted by the lapse in funding.

But, "the suspension of economic statistical releases will make it harder to track the state of the economy during the shutdown," says Bill Adams, chief economist at Comerica Bank. "That may cause financial markets to react more than usual to private data releases."

Today, that data included a report from executive outplacement firm Challenger, Gray & Christmas, which showed that U.S.-based employers cut 54,064 jobs in September. This was down 37% from August and 26% from the year prior.

"Right now, we're dealing with a stagnating labor market, cost increases, and a transformative new technology," says Andy Challenger, senior vice president and labor expert for Challenger, Gray & Christmas. "With rate cuts on the way, we may see some stabilizing in the job market in the fourth quarter, but other factors could keep employers planning layoffs or holding off hiring."

Tomorrow's economic calendar will not feature the September nonfarm payrolls report, as initially expected, due to the shutdown. Market participants will still see the Institute for Supply Management's Services Purchasing Managers Index (PMI) and S&P Global's Services PMI, and hear from a pair of Fed speakers.

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The market cap of Warren Buffett's Berkshire Hathaway (BRK.B) is about $1 trillion.

Its equity portfolio – concentrated in blue chip stocks Apple (AAPL), American Express (AXP), Coca-Cola (KO), Bank of America (BAC) and Chevron (CVX) – is worth about $250 billion. Subtract Berkshire's cash and cash equivalents of about $350 billion and that means the core operations' contribution to Berkshire's market value comes to about $600 billion.

This is a rough way of looking at Berkshire, but it goes to the point of Buffett being a master capital allocator. The company's market value reflects more than $600 billion in operating businesses, $250 billion in equities and another $350 billion in cash.

In other words, there's a lot more to Buffett's incredible success with Berkshire than his stock-picking acumen. Rather, it was due to how Buffett chose to allocate capital over decades. He was always focused on value rather than price, and, by extension, on the opportunity cost of those allocation decisions.

For example: Buffett loves collecting dividends but Berkshire famously doesn't pay one itself. And why should it? If you invest in Berkshire Hathaway, you're telling Buffett to invest your money for you.

In effect, you're trusting Buffett to generate a better return on your capital than whatever yield the BRK.B dividend would pay. Why settle for, say, a 2% yield when Buffett has shown that he will deliver more than 2% if you let him steward the cash earmarked for dividends instead?

The bottom line is that over the past six decades, Buffett – through acquisitions, investments and opportunistic ventures – did something that's unlikely to ever be repeated. He essentially doubled the performance of the broader market.

Indeed, since 1965, Berkshire stock has generated a compound annual growth rate of almost 20%. Over the same span, the S&P 500, with dividends reinvested, delivered a compound annual growth rate of 10%.

What that meant for anyone lucky enough to get in on the ground floor with Buffett has been nothing less than astonishing. If you invested $1,000 in Berkshire stock in 1965, it would today be worth about $33 million.

The same sum invested in the S&P 500 would be worth about $336,000 today.

They say records are meant to be broken, and perhaps one day another capital allocator will surpass Warren Buffett. But it's hard to see how.

With that in mind, we've gathered some of Buffett's words of wisdom he's shared over the years. These quotes are gleaned from Berkshire Hathaway shareholder letters and are advice that all investors should live by.

1. Only in America. "Berkshire would not have achieved its results in any locale except America whereas America would have been every bit the success it has been if Berkshire had never existed. … So thank you, Uncle Sam."

2. Admit mistakes. "During the 2019-23 period, I have used the words 'mistake' or 'error' 16 times in my letters to you. Many other huge companies have never used either word over that span."

3. Cost matters. "Performance comes, performance goes. Fees never falter."

4. Seize opportunities. "Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it's imperative that we rush outdoors carrying washtubs, not teaspoons."

5. Avoid the herd. "If investors insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful."

6. Prepare for difficult times. "You only find out who is swimming naked when the tide goes out."

7. Think long-term. "If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes."

8. Value investing. "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

9. Invest like an owner. "We view ourselves as business analysts – not as market analysts, macro-economic analysts or even security analysts."

Note: The compilation of Warren Buffett's quotes first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Warren Buffett is known as the greatest long-term investor of all time, but that kind of gives him short shrift. When the Oracle of Omaha steps down as CEO of Berkshire Hathaway (BRK.B) at the end of 2025, it will mark the end of the career of the greatest capital allocator of all time.

What's the difference? Market participants who pore over which stocks Buffett is buying and selling every quarter forget that Berkshire is essentially a conglomerate with massive insurance operations at its core.

That's not to denigrate Buffett and his late partner Charlie Munger's stock-picking skills. They are legendary. But the company's equity holdings are just a part of Berkshire stock's incomparable run over the past 60 years.

Recall that Berkshire Hathaway was a struggling textile firm when Buffett took control in 1965. Over the ensuing years, Buffett converted it into a holding company, or a company that buys other companies.

Buffett's first target was an insurance company, and the insurance business continues to be at the core of its operations today.

The insurance business was especially attractive to Buffett because of float, or the money insurance companies hold between collecting premiums and paying out claims.

Thanks to the float from Berkshire's insurance companies, Buffett had a source of permanent capital to go shopping for other businesses and equities.

The end result is a sprawling set of wholly owned subsidiaries that collectively represent an endlessly optimistic bet on the dynamism of the U.S. economy.

Geico insurance is perhaps the crown jewel of Berkshire's businesses, but more than 60 other companies also contribute to its bottom line.

Plenty of folks might know that BNSF Railway, industrial titan Precision Castparts and Duracell are among Berkshire's businesses. But let's not forget about smaller operations such as Dairy Queen, Froot of the Loom, See's Candies and the wonderfully named Acme Brick Company.

Below, we feature some of Berkshire's high- and lowlights over the past six decades.

1965: Buffett takes control of struggling textile manufacturer Berkshire Hathaway – ironically, a purchase he would later deem "my first mistake."

1967: Berkshire Hathaway pays a dividend of 10 cents a share – the first and only dividend the company has ever paid.

1976: Buffett buys 1 million shares in insurance company Geico at about $2 per share. The stock had traded at $61 per share in 1972. Buffett first bought shares in 1951; Geico became a wholly owned Berkshire subsidiary in 1996.

1988: Berkshire starts buying Coca-Cola (KO), purchasing a 7% stake in the consumer staples stock for just over $1 billion. Today, Coke is Berkshire's third-largest holding, worth some $26.6 billion.

1993: Buffett buys Dexter Shoe for $433 million in Berkshire stock. Not only does the business eventually fail, but the shares paid would today be worth roughly $19 billion.

1996: Berkshire issues Class B shares, priced at $23.20, or one-thirtieth of the Class A shares. The B shares traded at $504 in May, up more than 2,000%.

2010: Berkshire makes the largest business acquisition in the company's history, buying Burlington Northern Santa Fe Railway for $44 billion.

2016: Buffett starts buying stock in Apple (AAPL), overcoming an aversion to tech stocks when he realizes – after noticing customers in line at a local Dairy Queen absorbed in their iPhones – that Apple is also a consumer products company.

2025: Buffett announces his retirement at the end of the year, "setting a gold standard for how corporate succession should be planned and implemented," says David Kass, a finance professor at the University of Maryland.

Note: The timeline of Berkshire's high- and lowlights first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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UnitedHealth Group (UNH) is soaring out of the gate Friday after regulatory filings revealed Warren Buffett's holding company, Berkshire Hathaway (BRK.B), initiated a stake in the beaten-down Dow Jones stock in the second quarter.

According to WhaleWisdom, Warren Buffett's holding company bought a little more than 5 million UNH shares between April 1 and June 30, accounting for 0.6% of the Berkshire Hathaway equity portfolio and making it the 18th-largest position.

The stake was worth a market value of $1.6 billion at the end of Q2.

Why did Buffett buy UnitedHealth stock?

It's been a rough stretch for UnitedHealth – both on and off the price charts. The country's largest health insurer has struggled with rising Medicare costs and a Department of Justice investigation into its billing practices.

The company also announced in May that its CEO, Andrew Witty, was stepping down. And in July, it gave a full-year outlook that came in well below what Wall Street was expecting.

"When we prepared our 2025 Medicare Advantage offerings back in the first half of 2024, we significantly underestimated the accelerating medical trend and did not modify benefits or plan offerings sufficiently to offset the pressures we are now experiencing," said UnitedHealthcare CEO Tim Noel on the company's earnings call.

And its share price has plummeted as a result. In the past 12 months, UNH shares have plunged 52%. And they're down 46% for the year to date through April 14 – making UnitedHealth the worst Dow Jones stock of 2025 so far.

And this may explain why UnitedHealth was one of the stocks Buffett bought in Q2. Following its recent slump, UNH's forward price-to-earnings (P/E) ratio is now at 16.5 – below both its five-year average of 19.2, according to Morningstar, and the S&P 500's forward P/E ratio of 23.3.

And if there's one thing Warren Buffett loves, it's a bargain. Also working in UnitedHealth's favor is its fat 3.3% dividend yield, which, at the moment, is more than double the yield on the S&P 500.

Does this make UNH stock a buy?

Buffett & Co. are not the only ones on Wall Street that have signaled their confidence in the embattled blue chip stock.

Of the 26 analysts covering UnitedHealth Group who are tracked by S&P Global Market Intelligence, 13 say it's a Strong Buy, six call it a Buy, five have it at Hold and two rate it a Strong Sell. This works out to a consensus Buy recommendation.

Meanwhile, the average price target of $327.29 represents implied upside of more than 20% over the next 12 months or so. And the Street's loftiest target price on UNH of $626 is more than two times higher than the stock's current price.

Truist Securities analyst David MacDonald is one of those with a Buy rating on UNH.

"The company has several initiatives underway to drive improvement across segments," MacDonald wrote in a July 31 note, adding that he sees "opportunity around value-based care and broader margin improvement aided by further leveraging [of] automation/AI over time."

The analyst adds that "long-term execution" is key and that UnitedHealth Group's cash flow "should help drive balanced ongoing capital deployment while supporting corrective actions and investment in core capabilities and technology/efficiency."

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In early May 2025, Warren Buffett announced his plan to retire as CEO of Berkshire Hathaway (BRK.B), the struggling textile company he took over in 1965 and transformed into a sprawling conglomerate (189 subsidiaries) and a legendary investment vehicle (stock in 40 companies worth nearly $280 billion in the first quarter, according to CNBC, plus some $348 billion in cash).

Come year-end, Buffett, who turns 95 in August, hands the reins to Greg Abel, 63, who joined Berkshire in 1999 when it acquired a controlling interest in MidAmerican Energy, an Iowa utility.

Buffett isn't disappearing. He'll remain chairman of the board, and he told the Wall Street Journal, "I'm not going to sit at home and watch soap operas."

We know Kiplinger readers revere Warren Buffett, so we couldn't let him go without a bit of a send-off.

It's difficult to overstate Buffett's influence on the business and investing worlds, says David Kass, a finance professor at the University of Maryland, who recalls how gracious – and funny – the man known as the Oracle of Omaha could be to the occasional groups of students Kass would bring to meet him.

"Many portfolio managers will tell you that everyone makes mistakes, and that if you get it right 50% of the time, then you succeed," says Kass. "In the case of Buffett, he's right over 90% of the time. That differentiates him from everyone else."

Buffett is a master communicator, and at times, he has been an elder statesman. His op-ed in the New York Times in October 2008, during the depths of the Great Financial Crisis, just weeks after Lehman Brothers declared bankruptcy, was Churchillian, as he encouraged frightened investors to "Buy American" and to "Be fearful when others are greedy and be greedy when others are fearful."

His annual letters to shareholders are gems of transparency and accessibility (no finance degree necessary!), sprinkled with a folksy humor that makes them must-reading for all investors, not just Berkshire's.

But perhaps Buffett's most important legacy, says Kass, beyond his personal qualities of honesty, integrity and transparency, is the example he set for how to be a long-term investor: patient, impervious to market swings, with an ideal holding period of "forever."

And indeed, as Buffett told the Journal, he hopes his equanimity will continue to stand Berkshire in good stead: "I will be useful here if there's a panic in the market, because I don't get fearful when things go down in price or everybody else gets scared."

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Warren Buffett likes to say that price is what you pay, value is what you get. But that doesn't mean blindly indexing to value stocks is a path to long-term success.

After all, value stocks have broadly lagged growth stocks for more than a decade and there's no telling when they'll catch back up.

Besides, value is in the eye of the beholder. It's not for nothing that, on average, about 30% of the stocks in the benchmark Russell 1000 Value Index are also found in the Russell 1000 Growth Index.

"The remaining 70% are assigned to be either all growth or all value," per FTSE Russell.

Passive investors in a broad market index that tracks the S&P 500 needn't worry about the style differences between value and growth. Such distinctions are of more concern to tacticians and traders.

Nevertheless, there is something unusual about value's long-term slump.

First, a quick recap on value stocks vs growth stocks: Value stocks are equities that are perceived to be trading at a discount based on metrics such as price-to-book ratios, price-to-earnings ratios, dividend payout ratios and the like.

Growth stocks tend to trade at premiums to these metrics, as investors are willing to pony up for accelerating future free cash flows.

It's important to know that classifying stocks as growth or value is not a straightforward matter.

Russell assigns a growth and value weight based on its valuation criteria, which is how so many stocks find themselves represented in both benchmark indexes.

As FTSE Russell notes, what started out as a way for active managers to benchmark their performance based on their investment styles became a tool for professionals to make "unbalanced allocations based on their strategic or tactical views."

In other words, the benchmark growth and value indexes are not pure plays, and haven't been for decades.

"Pre-conceived notions of 'growth' and 'value' aren't always reflected in indexes labeled growth and value," writes Liz Ann Sonders, chief investment strategist at Charles Schwab. "That has been both exacerbated and emphasized in the post-pandemic era, especially for a sector like technology, which is traditionally thought of as dominating the growth sphere but now has a hefty weight in some value indexes."

Is value investing dead?

"Value investing is based on the premise that paying less for a set of future cash flows is associated with a higher expected return," writes the equity investing team at Dimensional Fund Advisors. "That's one of the most fundamental tenets of investing."

Over the long haul, value stocks have indeed outperformed growth stocks in the U.S., often by wide margins.

"Data covering nearly a century backs up the notion that value stocks — those with lower relative prices — have higher expected returns," Dimensional adds. "While disappointing periods emerge from time to time, the principle that lower relative prices lead to higher expected returns remains the same."

Given that mean reversion is a thing in both life and investing, value investors may be forgiven for expecting their stylistic preference to come back vs growth.

But it hasn't happened yet.

Have a look at the chart below to see the performance of the iShares Russell 1000 Value ETF (IWD) vs the iShares Russell 1000 Growth ETF (IWF) over the past decade to see how far the gap has widened on a total return basis (price change plus dividends).

Using these benchmark ETFs as proxies, we can see that growth returned more than 360% over the past 10 years vs less than 140% for value. That bucks historical trends in a big way. Since 1927, value stocks outperformed growth stocks by 4.4% annually in the U.S.

This doesn't mean value investing is dead. However, it might suggest that value investing via a broad index like the Russell 1000 Value Index isn't the best way to find value stocks. It isn't necessarily a good proxy for retail investors looking for cheap diversification to true value names.

Finding true value stocks is hard – just ask Warren Buffett. That said, value investors do have history on their side.

As Hartford Funds notes, "the performance of growth stocks and value stocks has been cyclical. This cyclical behavior highlights the benefits of having both types of investments in a portfolio."

Getting the balance and timing of such tactical allocations is generally best left to the pros.

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Berkshire Hathaway (BRK.B) is in a class by itself when it comes to really long-term outperformance. It's not for nothing that Warren Buffett, who will retire as CEO at the end of 2025, is known as the greatest long-term investor of all time.

BRK.B stock has been a market beater over the past 20 years, too, but all the millionaires Berkshire minted had skin in the game long before the turn of the century.

That's how compounding and the law of large numbers work.

But first, a quick recap of Berkshire Hathaway's history. The company was a struggling textile firm when Buffett took control in 1965. Over the ensuing years, Buffett converted it into a holding company, or a company that buys other companies.

Buffett's first target was an insurance company, and the insurance business continues to be at the core of Berkshire's operations today.

Insurance was especially attractive to Buffett because of float, or the money insurance companies hold between collecting premiums and paying out claims. Thanks to the float from Berkshire's insurance companies, Buffett had ample sources of capital to buy up or invest in other enterprises.

Today, Berkshire Hathaway comprises more than 60 wholly owned subsidiaries, including BNSF Railway, Geico insurance, industrial titan Precision Castparts and fast food chain Dairy Queen.

Meanwhile, the Berkshire Hathaway equity portfolio, with a market value of about $250 billion, includes major stakes in Apple (AAPL), Bank of America (BAC) and American Express (AXP), to name just a few.

Berkshire Hathaway has always been a long-term bet on the dynamism of the U.S. economy. It's also a low-beta stock, which means it tends to underperform in up markets and outperform in down markets.

And what that has added up to over the past 60 years is nothing less than astonishing. Since 1965, Berkshire stock has generated a compound annual growth rate of almost 20% vs 10% for the S&P 500.

What does that look like on a brokerage statement? Well, if you put $1,000 into Berkshire stock 60 years ago, it would be worth about $33 million today. The same sum invested in the S&P 500 would today be worth about $336,000.

Warren Buffett and his late partner Charlie Munger really did mint many a millionaire over the course of their long careers.

However, BRK.B's returns over the past 20 years, while good, have naturally been more modest.

After all, there's nothing like getting in on the ground floor.

The bottom line on Berkshire stock?

Although BRK.B stock outperformed the broader market by a wide margin over the past five years, it actually lagged the returns of the S&P 500 over the past one-, three-, 10- and 15-year periods.

If you go back 20 years, BRK.B, which doesn't pay a dividend, generated an annualized return of 11.2%.

That's not too shabby, but it leads the S&P 500, with dividends reinvested, by less than a percentage point. An active fund manager might be happy with such results, but it hardly means BRK.B stock was a path to riches in the 21st century.

Have a look at the above chart to get a sense of what BRK.B's returns would mean to your brokerage statement over the past couple of decades. They're just OK.

Indeed, if you put $1,000 into Berkshire stock 20 years ago, today it would be worth about $8,300. The same amount invested in the S&P 500 would theoretically be worth about $8,200 today.

With Warren Buffett set to step down at the end of 2025, some folks fear that Berkshire stock's best days are behind it. The reality is that Berkshire is now so big that it's unreasonable to expect anyone to repeat Buffett's historic run.

True, that doesn't mean BRK.B can't continue to be a market beater going forward. Wall Street is mostly bullish on the name, giving it a consensus recommendation of Buy, according to data from S&P Global Market Intelligence.

Nevertheless, BRK.B's era of generating truly outstanding returns would appear to be behind it – and that was true even before Buffett announced his retirement.

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On the hit Paramount+ TV series Landman, Tommy Norris, played by Billy Bob Thornton, says:

"It's in everything — that road you drove in on, the wheels on every car ever made, including yours, tennis rackets and lipstick, refrigerators, antihistamines and pretty much anything plastic. It's in your cell phone case, artificial heart valves, clothing that's not made of animal or plant fibers, soap, hand lotion, garbage bags ... you name it."

The ubiquitous "it" he references is oil, and it really is in nearly everything.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

Solar panels and wind turbines, the darlings of "clean" energy afficionados, are made almost entirely out of petroleum products. So is your TV, backpack, half of your grocery containers, couch pillows, wire coating and plumbing in your home, most medical devices, roof shingles, key fobs, shampoo bottles … even shampoo itself! All require oil.

So can oil play an integral role in your retirement ... by becoming a part of your IRA?

Beyond the traditional investment trio

I've studied IRA investing for many years, with books like The Psychology of Money by Morgan House, The Intelligent Investor by Benjamin Graham, Ed Slott's Retirement Decisions Guide, One Up on Wall Street by Peter Lynch and many others.

But I don't want to add to your reading list arbitrarily. The fact is, when searching for investment information, it's not a shortage of information that cripples us, it's a surplus.

A simple Google search on "IRA investing" yields literally millions of pages of "information," and unless you have years of experience in the field, you're likely to find most or all of it confusing, self-serving, contradictory or explicitly designed to sell products or services.

Small wonder, then, that so many investors struggle to know what to listen to or whom to trust.

Drill a little deeper (pun intended) and you will find the majority of this information focuses exclusively on stocks, bonds or real estate. Many investors logically draw the conclusion that these are their best — or only — options. And that simply isn't true.

I'm not opposed to stocks, bonds or real estate; I own these investments myself, and most of my clients do, too.

However, over my three decades observing investors' portfolios, I've found that 9 out of 10 investors have all their wealth concentrated in just these three asset classes, with a handful reserving a sliver of cash or gold.

Ask yourself: Is your entire net worth in stocks, bonds and real estate? Could you be missing opportunities for greater diversification and potentially better results? Statistically speaking, it's quite possible, even likely.

As a financial planner in Houston — the oil and gas capital of the world — I've observed that many of the most sophisticated high-net-worth and accredited investors include oil and gas investments in their IRA portfolios.

While specific oil and gas returns must be discussed within a Private Placement Memorandum (PPM), I can tell you that accredited investors tend to benefit from comparing stocks and bonds with the expected returns, risk profiles and cash flows of certain oil and gas partnerships.

Each investor must draw their own conclusions, and of course no investment is risk-free.

Nevertheless, allocating a portion of your IRA to oil and gas allows many accredited investors to potentially amplify total returns, increase withdrawal rates, lower overall risk through diversification and ultimately enhance retirement income.

A real-world example

We recently counseled a couple approaching retirement who wanted to make sure they were as well prepared as they could be.

Robert and his wife, Susan — not their real names — had followed sound financial principles throughout their marriage: living below their means, saving and investing, avoiding debt and practicing prudent money habits.

Robert had worked for a Fortune 500 company, while Susan had just finished her 30th year as a schoolteacher.

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Their diligent approach had paid off, enabling them to put three children through college, start education funds for four grandchildren, pay off their home, acquire several rental properties and still accumulate just over $4 million in 401(k)s, which they planned to roll into IRAs at retirement. They were poised to retire debt-free, with considerable assets.

Overall, it was an enviable position to be in, but Robert and Susan still had questions and concerns. Robert had relatives who had retired just before the 2008 financial crisis, and when their retirement savings were severely damaged, they were forced to return to the workforce.

Robert and Susan wanted protection against similar risks, having witnessed various market cycles during their 30 years of investing. They also wondered about income planning, asset preservation, when to claim Social Security and what kinds of tax strategies to follow in retirement.

What impressed us about this couple was not just their dedication to learning about investment and retirement planning, but the ways they had followed the principles they had learned.

They correctly noted that the recommended withdrawal rate from IRAs for income should be around 3.5% to 4%, meaning each million dollars in their accounts would generate $35,000 to $40,000 annually.

They had always believed stocks and bonds were their only investment options. Then we introduced them to the concept of broader diversification through oil and gas investments, Class A apartment buildings, self-storage facilities, preferred stocks and corporate credit funds available exclusively to accredited investors — options no one had previously mentioned to them.

They were particularly drawn to oil and gas investments after reading about ongoing demand and learning how investors like Warren Buffett were increasing allocations to this asset class.

Robert consulted his brother, who had worked for a major oil company for nearly three decades. His brother explained why oil and gas prospects appeared favorable for the next decade or more.

Robert learned how ESG investing had diverted capital from major firms like Chevron and Exxon, creating opportunities for higher-tier independent producers to co-invest directly into partnerships with majors such as Exxon, Chevron, ConocoPhillips and Occidental.

Understanding oil and gas for IRAs

A typical IRA-suitable oil and gas partnership from a top-tier sponsor might last four to five years, potentially generating quarterly cash flow of 8% to 12%. Investments could involve anywhere from 20 to over 100 wells.

These partnerships typically target total returns of about 15% to 20% annually, though returns aren't guaranteed and are subject to various risks.

Every accredited investor must review the PPM, seek qualified advice and determine if the risk aligns with their personal situation.

Robert and Susan reasoned that by allocating a portion of their IRAs to oil and gas, they could improve their odds of generating an enhanced income stream as they moved into retirement compared to investing only in stocks and bonds.

Due diligence questions

If you're considering an oil and gas partnership for your IRA, it's crucial to conduct thorough due diligence. Key questions should address the sponsor's track record and reputation, projected cash flows, well locations, drilling strategy, investment duration, expected returns, break-even oil price, hedging strategies and partnerships with major companies.

Ask about risks including commodity price risk, execution risk and legislative risk.

These represent just a few of the 21 critical criteria we recommend investors learn more about before proceeding. A reputable company will provide clear, substantive answers to all your questions. If you don't receive satisfactory responses, continue your search.

Discuss income planning with IRAs using oil and gas investments with your financial adviser as part of a larger conversation about expanding your diversification.

If your adviser maintains a limited view focused only on stocks, bonds, real estate and a dash of cash, consider finding someone better versed in these important alternative asset classes or who works within a setting offering a broader menu of options.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

You don't have to be Warren Buffett or Charlie Munger to invest like them.

Their legendary success is often chalked up to brilliance and unmatched investing skill. But Munger once offered a simpler explanation: "It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent."

Still, many investors struggle with confidence. According to Schwab, about a third of Americans don't feel confident in their investment strategy – and roughly half of those say it's because they lack knowledge.

The good news? You don't need a secret formula to be successful. Finance experts say that following a handful of basic principles consistently can go a long way.

With that in mind, here are seven essential rules every investor should know. They may not turn you into a billionaire, but they just might help you build the future you want.

1. Start early

The stock market has historically gone up more than it's gone down. To make the most of that long-term trend, the best thing you can do is start investing early.

That's because of the power of compound interest – earning returns on your past returns. It's what Albert Einstein reportedly called the eighth wonder of the world.

Still, getting started is often "the hardest step to take," says Shaun Melby, certified financial planner and founder of Melby Wealth Management. He notes that people are often "intimidated" and "afraid" of making mistakes.

"But putting a few hundred dollars in a Roth IRA and investing it in a simple S&P 500 ETF is 1,000x better than doing nothing," he says.

Consider this: Nearly four in 10 older adults say not saving for retirement early enough is their biggest financial regret. As the old proverb goes, "The best time to plant a tree was yesterday. The second-best time is today."

2. Keep buying

Most people invest through workplace plans like a 401(k), contributing automatically every paycheck. That's not just convenient. It's a strategy known as dollar-cost averaging, where you invest consistent amounts over time, regardless of what the market is doing.

While research shows lump-sum investing generally outperforms over the long run, dollar-cost averaging can help smooth out the ride, especially during downturns, when your money buys more shares at lower prices.

It also has a powerful behavioral benefit: it keeps you investing through both good times and bad.

As Melissa Caro, certified financial planner and founder of My Retirement Network, puts it: "The goal isn't to find the most impressive portfolio, it's to build one you can actually stick with through good markets and bad."

3. Time in the market beats timing the market

The goal is to buy low and sell high, but trying to predict when to do that consistently? Nearly impossible.

In fact, some of the best market days tend to occur right after the worst. Wells Fargo found that over 30 years, the 30 biggest up days and 30 worst down days for the S&P 500 often happened close together.

"Let sleeping dogs lie is one of my favorite principles as it relates to investing," says Thomas Van Spankeren, principal and chief investment officer at Rise Investment Management.

He explains investors can buy, sell or hold. It's holding that is often the most advantageous, even though it feels like doing nothing. "Lasting wealth is created in the long game."

4. Stay calm and invest on during market volatility

Of course, sticking with your investments sounds easy… until the market drops. That's when emotion creeps in and investors can panic.

The real problem usually isn't what the market does. It's what the investor does in response.

Since 1980, the average intra-year decline in the stock market has been 14.1%, according to J.P. Morgan Asset Management. And yet, the market still ended in positive territory in 34 of those 45 years, or 75% of the time. So, volatility is normal. And often short-lived.

That's why Thomas Balcom, founder of 1650 Wealth Management, encourages a more opportunistic mindset during market swings. "Whenever there is a pullback in the stock market, long-term investors should consider adding to their investment portfolio," he says.

5. Know your "why"

A number doesn't define success in investing. It's defined by your ability to achieve "why" you're investing in the first place.

When you start with a specific goal, you might realize you don't have to take on maximum risk to reach it. Instead, you can work backward to build a plan that fits. Whether it's buying a house in five years or retiring in 20, your timeline and priorities should drive your strategy.

That's the role of asset allocation – the mix of investments you choose based on your time horizon and risk tolerance.

"Invest for your time frame," says David Haas, certified financial planner and owner of Cereus Financial Advisors. "The danger of ignoring this rule is either that you won't have your money when you need it, or that you will sell out of all your investments in a downturn and not buy them again until after they go back up."

Even the best investment strategies can fall short if they're not aligned with the life you want to live. A plan built around the wrong "why" might look good on paper, but miss the mark where it matters most.

6. Win the loser's game: diversify

In his classic book Winning the Loser's Game, investor Charles Ellis argues that long-term success comes not from chasing big wins, but from minimizing losses. He compares investing to amateur tennis: the player who makes fewer unforced errors usually wins.

One way to minimize losses in investing is through diversification. Rather than betting on a single stock, investors spread their risk. Mutual funds and ETFs are common tools for this, offering exposure to a wide range of assets.

"Diversification is highly important for long-term success," Haas SAYS. He explains that buying 100 shares of Nvidia (NVDA) or Tesla (TSLA) is speculation, while building a diversified portfolio and holding it for many years is true investing.

"Your portfolio will be less volatile and you can be assured you will own not just what is going up (or down) now, but what will be going up in the future," he adds.

7. The less you pay in fees, the more return you keep

An old Wall Street adage goes: There's no such thing as a free lunch. Every investment comes with costs, and those costs come straight out of your return.

The average mutual fund fee is around 0.4%, but some funds charge over 1%, according to the Investment Company Institute. That might not sound like much, but over time, even small fees can compound into thousands of dollars lost.

Some fees don't directly benefit investors. Sales charges (loads) and 12b-1 fees, for example, are used for marketing and distribution.

Legendary investor John Bogle put it plainly: "In investing, you get what you don't pay for. Costs matter."

Getting the basics right can make a big difference. But it also pays to keep learning, especially as your life and financial needs change.

Think of this as a bonus rule.

"When it comes to investing, staying sharp on strategy in real time pays dividends over the long haul," says Paul Penke, certified financial planner and portfolio manager at Ironvine Capital Partners.

Or, as Ben Franklin once said: "An investment in knowledge pays the best interest."

If you're reading this, you're already off to a good start.

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Do you have moves like Buffett? Play our quiz and test your knowledge of Warren Buffett's investment strategies. They don't call him the Oracle of Omaha for nothing.

More on Warren Buffett and his investing philosophy, from the Kiplinger team:

• How You Can Invest Like Warren Buffett: An Expert's Guide
• Warren Buffett Advice: Why You Should Pick Businesses, Not Stocks
• Warren Buffett Stocks: The Berkshire Hathaway Portfolio

There were no bells, no whistles, only two cans of Coca-Cola and a box of See's Candies. "I think the time has arrived," he said, "where Greg should become the chief executive officer of the company at year-end."

That's how Warren Buffett announced his succession plan, in a folksy, offhand way – and for practical reasons – at the end of a five-hour Q-and-A session with shareholders at the Berkshire Hathaway (BRK.B) annual meeting in Omaha on Saturday.

"Greg" is Greg Abel, the 62-year-old chairman and CEO of Berkshire Energy and vice-chairman of Berkshire's non-insurance operations.

Abel, who was designated CEO successor in 2021 and first joined Buffett and Charlie Munger on the stage at a Berkshire annual meeting in 2022, was there again on Saturday to learn of his promotion in real time.

As Buffett explained, two of Berkshire's 11 directors – his children, Howie and Susie – knew of his plan. "The rest of them, this will come as news to," he explained before he put a date on Abel's elevation to CEO.

On Sunday, as the Oracle of Omaha foretold, Berkshire's board of directors voted unanimously to appoint Abel president and CEO effective January 1, 2026.

Abel, from Edmonton, Alberta, Canada, started his career as a chartered accountant with PricewaterhouseCoopers in San Francisco. In 1992, he joined geothermal electricity producer CalEnergy.

In 1999, CalEnergy acquired MidAmerican Energy and took its name.

Berkshire acquired MidAmerican later that year. Abel became CEO of MidAmerican in 2008, and the company was renamed Berkshire Hathaway Energy in 2014.

Buffett, the largest Berkshire shareholder with holdings worth approximately $160 billion, will remain chairman of the board.

As he explained on Saturday, he'll "hang around" to help, but Abel will have final say on operations and capital deployment. "I could be helpful, I believe, if we ran into periods of great opportunity or anything."

Buffett said he won't sell any Berkshire shares as part of his transition into a new role.

"The decision to keep every share is an economic decision," he added, "because I think the prospects of Berkshire will be better under Greg’s management than mine.

"It's working way better with Greg than with me because, you know, I didn’t want to work as hard as he works. I could get away with it because we've got a basically good business, very good business."

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Buy low and sell high. That sounds easy, right? The problem is defining what exactly "low" means.

How do you define whether the stock market is cheap or expensive?

Precisely valuing the market is exceptionally hard. It involves making guesses on several key assumptions such as interest rates or growth in earnings per share.

So investors – even all-time greats like Warren Buffett – tend to fall back on "quick and dirty" metrics.

These metrics are designed to tell you whether the market is generally cheap or generally expensive. But they aren't intended to be used with surgical precision.

It so happens that the "Oracle of Omaha" has his very own quick-and-dirty metric, the "Buffett Indicator." The Buffett Indicator is a broad measuring stick of whether the stock market is overvalued or undervalued relative to the size of the overall economy.

Buffett famously referred to this indicator as "probably the best single measure of where valuations stand at any given moment" in a 2001 interview with Fortune magazine.

It is absolutely not a tool for short-term trading.

But it can be a really solid tool for long-term allocation decisions, such as for a 401(k) plan or even in an institutional portfolio like a pension plan.

What is the Buffett Indicator?

The Buffett Indicator is calculated by dividing the total market capitalization of a country's publicly traded stocks by its gross domestic product (GDP). Market cap is the total value of all outstanding shares of every publicly traded company.

For example, Microsoft's (MSFT) market cap is $2.6 trillion. That's the total value of all Microsoft shares in existence. We add up every other listed company to arrive at a total market cap of a country.

If we were putting the Buffett Indicator to work in the U.S., we would use the Wilshire 5000 Total Market Index. The Wilshire 5000 includes far more companies than the commonly quoted S&P 500 Index or the Dow Jones Industrial Average.

We would divide this comprehensive measure of nearly all publicly traded American stocks by U.S. GDP.

In short, the Buffett Indicator equals total market cap divided by GDP. Its utility is based on the idea that, over time, stock values should roughly move with the economy.

When this ratio is high, it suggests that the market's valuation is running ahead of the actual economic output, meaning the market is potentially overvalued. A low ratio could indicate undervaluation and possibly a good buying opportunity.

It's important to note that the number in a vacuum doesn't mean much. There is no absolute level that means the market is cheap or expensive. You have to compare it over time and look for trends.

Historically, the Buffett Indicator has hovered around 75% to 90%. Values above 100% may suggest the stock market is overvalued, although some argue that changes in interest rates, profit margins and globalization have shifted what counts as a "normal" ratio.

The Buffett Indicator has certainly trended higher over the past few decades.

The Buffett Indicator in action

Let's take a look at the Buffett Indicator today.

Research site GuruFocus calculated the traditional Buffett Indicator (green line) along with a modified Buffett Indicator (blue line) that attempts to adjust for the Federal Reserve's aggressive monetary policy since the 2008 meltdown.

Here's what that looks like in chart form:

A few things jump right off the chart.

If 100% is Buffett's rule of thumb for overvaluation, then the market has spent most of the past 20 years in exceptionally expensive territory. The average has been 122%.

Of course, today we're well above that level.

Even after the recent stock correction, the traditional Buffett Indicator is above 190%. And the Fed-adjusted Buffett Indicator is sitting at 155%.

When Buffett endorsed it in Forbes, the ratio had soared to record highs during the dot-com bubble. The indicator fell in the early 2000s following the market crash.

But it has climbed steadily in the decades since, often reaching levels well above its historical average.

Takeaways from the Buffett Indicator

Does the Buffett Indicator’s lofty level suggest a market crash is imminent? No, and that's not how the indicator is designed to be used.

It's exceptionally poor as a short-term timing tool. Had you dumped your stocks due to overvaluation in the index, you would have missed out on one of the longest and most extreme bull markets in history.

But it's a useful tool for understanding where we are in the broader market cycle. You should use it as you balance your portfolio between stocks, bonds, cash, gold and other assets.

If you're heavily invested in stocks right now, you might want to look at diversifying your portfolio by upping your exposure to other asset classes.

And, likewise, when the indicator dips into "cheap" territory, you might consider increasing your exposure to stocks.

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Warren Buffett has amassed a level of wealth few of us could ever comprehend, let alone achieve. His $150 billion net worth puts him not just among the wealthiest people today, but the wealthiest people in history – rarefied air where only the likes of Rockefeller, William the Conqueror, Augustus Caesar and Genghis Khan could ever look down upon him.

And as you're well aware, he became one of the richest people in the world on smart investing decisions.

The retiring CEO of the trillion-dollar Berkshire Hathaway (BRK.B) is hardly perfect, of course. Warren Buffett has made his fair share of mistakes.

But investing is more like baseball than pre-playoffs college football: You don't need to be perfect. You just need to win a decent amount more than you lose.

The Oracle of Omaha has done exactly that across eight decades of investing. But as you'd imagine, some of those winning investments stand out more than others.

And today, we're going to point a spotlight at some of Warren Buffett's best investments.

Coca-Cola

Warren Buffett is positively giddy about Coca-Cola (KO).

"Do you mean the stock or the drink?"

"Yes."

OK, if I'm being precise, Buffett's deep affection isn't for Coca-Cola Classic, but for Diet Coke and Cherry Coke, telling Fortune about a decade ago that between the two, he drank five cans a day.

"If I eat 2,700 calories a day, a quarter of that is Coca-Cola." That's a direct quote!

Can't blame the man for supporting the brand. Coca-Cola has been one of Buffett's most spectacular holdings since 1988, when Berkshire Hathaway began spending $1.3 billion to amass what today is a $28.1 billion, 9%-plus stake in the ubiquitous beverages giant.

It has all of the hallmarks of a good Buffett investment. It has a bulletproof brand and significant industry "moats."

It pays dividends, too – and has for a long time. Indeed, KO is a Dividend King that has grown its cash distribution to shareholders for 63 consecutive years. And based on Coca-Cola's most recent dividend increase, to 51 cents per share quarterly, KO will owe Buffett $204 million in dividends every quarter.

Buffett hasn't been afraid to be critical of Coca-Cola during his 37 years of owning the stock.

In 2006, Buffett said during Berkshire's annual meeting that he regretted not selling Coca-Cola in 1998 after it had exploded to wildly high valuations. "You can definitely fault me for not selling the stock," he said. "I always thought it was a wonderful business, but clearly at 50 times earnings it was a silly price." And in 2014, Buffett vocally opposed an executive pay plan, though he merely abstained from the vote because he didn't "want to go to war" with Coke.

Regardless, Coca-Cola is one of the few stocks that Buffett says he plans on owning forever. Given his returns, it's easy to understand why.

American Express

In a discussion about Buffett holdings, American Express (AXP) and Coca-Cola are often mentioned in the same breath. That's because they're both longtime Berkshire holdings that Buffett has said he wants to hold forever.

Buffett's original foray into AmEx started long before Coca-Cola, in the 1960s, but most of the $1.3 billion spent on building the position came during the 1990s. Berkshire now owns about 22% of the company, and despite not adding a single share since 1995, his position has swelled to more than $50 billion in worth.

American Express enjoys many of the same positive characteristics as Coca-Cola: a renowned brand, strong moats and a good dividend. AXP doesn't have quite the track record of uninterrupted growth that KO does, but the growth itself has been excellent.

The distribution has more than tripled in just the past decade alone. With the newest payout, which was raised by 17% to 82 cents per share in March, Buffett will be due almost $500 million in 2025.

"I can't really think of a company like American Express that has a position and a credit card that is extremely strong," Buffett has said. "It has strengthened dramatically over the last 20 years for a lot of reasons."

Apple

That's not the end of the quote, however. It continues:

"That's the story of why we own American Express, which is a wonderful business. We own Coca-Cola, which is a wonderful business. And we own Apple, which is an even better business, and we will own, unless something really extraordinary happens, we will own Apple and American Express and Coca-Cola."

Berkshire began buying Apple (AAPL) in 2016. Between that and additional purchases over the next few years, Buffett spent a total of $40 billion on a stake that would eventually swell to account for about half the worth of the Berkshire Hathaway equity portfolio.

But the quote above? That came from at Berkshire's annual meeting in May 2024 – after he had already started trimming his position in Apple, but right before he really hacked away at it.

All told, between Q4 2023 and Q3 2025, Buffett unloaded more than 70% of his stake, or about $150 billion. The biggest tranche of that came in Q2 2024, when he sold more than $80 billion worth of AAPL stock.

Despite seemingly sprinting away from Apple, Buffett's reasons for selling shares had little to do with the company itself.

Indeed, only a couple of years ago, he referred to Apple as "probably the best business I know in the world." Instead, his sales were largely chalked up to AAPL's high valuation, as well as wanting to take advantage of capital gains tax rates ahead of a possible increase.

In fact, even after all of those sales, Apple remains Berkshire's No. 1 position by a mile – a $60 billion stake that represents about 22% of the portfolio's assets, vs approximately 19% for No. 2 AXP.

GEICO

While many people love keeping up with what Warren Buffett is buying and selling because they might want to repeat those moves in their own portfolios, one of the Oracle's best investments is inimitable.

That's because Berkshire owns GEICO outright.

That wasn't always the case – decades ago, GEICO was a publicly traded company. Buffett bought shares in 1951 when he was at Columbia University, but sold them by 1952. Still, GEICO had made an impression.

"At the time I felt that GEICO possessed an extraordinary business advantage in a very large industry that was going to continue to grow," Buffett said. "Since that time they never have lost that advantage – the ability to give the policyholder back in losses a greater percentage of the premium dollar than any other auto insurance company in the country, while still providing a profit to the company."

Then in 1976, Buffett started buying … and kept buying for the next two decades. By 1995, he owned 49% of the company, then spent another $2.3 billion buying the rest of it outright.

Today, GEICO has some $32 billion in assets.

"When I count my blessings, I count GEICO twice," Buffett has said.

Japanese trading houses

This last investment might not be one of Buffett's greatest trades yet, but it's off to a spectacular start, and Buffett is nothing but bullish about it.

In July 2019, Berkshire began building stakes in five Japanese "sogo shosha" (trading houses). The firm has spent a total of $13.8 billion on these positions, which are now collectively worth about $30 billion.

And clearly, he's still enamored.

In Berkshire's 2023 shareholder letter, Buffett lumped his Japanese investments in with Apple, AmEx and Occidental Petroleum (OXY) as holdings he expects to maintain indefinitely. Then in 2024's letter, he signaled his willingness to keep buying.

"Our holdings of the five are for the very long term, and we are committed to supporting their boards of directors. From the start, we also agreed to keep Berkshire's holdings below 10% of each company's shares. But, as we approached this limit, the five companies agreed to moderately relax the ceiling. Over time, you will likely see Berkshire's ownership of all five increase somewhat."

We'll see whether new Berkshire CEO Greg Abel maintains similar levels of commitment.

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Warren Buffett is many things – the world's most famous investor, the departing CEO of the trillion-dollar Berkshire Hathaway (BRK.B) holdings company, and a true Cherry Coke junkie among them.

But like the rest of us, he's certainly not perfect.

We keep a close eye on Warren Buffett, for good reason. Investors not only are curious about the stocks Buffett is buying and selling each quarter and what he keeps in the Berkshire Hathaway equity portfolio, but also the occasional pearls of wisdom he doles out in shareholder letters, annual meetings and interviews.

That said, the "Oracle of Omaha" might boast myriad successes, but he certainly hasn't batted 1.000 for his career – not even close. Indeed, the retiring CEO of Berkshire Hathaway has made numerous mistakes to the tune of many billions of dollars.

And those mistakes serve to teach us a pair of vital lessons:

1. You don't need to be perfect to be a successful investor.

2. Like Buffett, you should use each of your errors as a learning opportunity – even if the lesson is nothing more than "you're not infallible."

With that in mind, let's take a look at some of Warren Buffett's biggest misses:

ConocoPhillips

Warren Buffett first entered ConocoPhillips (COP) in 2005, but his big, disastrous splash in the energy stock didn't come until 2008, when he vastly expanded his stake from 17.5 million shares to 84 million by the end of the third quarter.

And what, pray tell, happened in the fourth quarter?

COP shares cratered with the rest of the energy sector, losing roughly half of their value by the middle of Q1. Buffett's Berkshire Hathaway ended up absorbing a $1.5 billion loss during the quarter, predominantly fueled by a $1.9 billion write-down of its ConocoPhillips stock. Buffett began unloading shares that same quarter.

Buffett was characteristically open about the failure in February 2009, when he issued his annual letter to Berkshire shareholders:

"I told you in an earlier part of this report that last year I made a major mistake of commission (and maybe more; this one sticks out). Without urging from Charlie or anyone else, I bought a large amount of ConocoPhillips stock when oil and gas prices were near their peak. I in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year. I still believe the odds are good that oil sells far higher in the future than the current $40-$50 price. But so far I have been dead wrong. Even if prices should rise, moreover, the terrible timing of my purchase has cost Berkshire several billion dollars."

Berkshire's stake winnowed away until 2013, when Buffett finally exited the position outright – and shifted his focus to a new $3.7 billion in competitor Exxon Mobil (XOM).

Paramount Global

One of Buffett's biggest failures provides a quick back-story to one of the market's biggest current dramas, the battle for Warner Bros. Discover (WBD) between Paramount Skydance (PSKY) and Netflix (NFLX).

Berkshire started building a stake in PSKY's predecessor Paramount Global's Class B shares during Q1 2022. That stake reached 93.6 million shares (~$1.6 billion). And it was an unmitigated disaster.

Paramount – the company behind CBS, Showtime, MTV, Comedy Central, Nickelodeon, BET and more – has suffered alongside other traditional media companies from the decline of cable and lousy ad rates.

The past three years have seen Paramount slide from robust profits to deep losses, thanks in large part to a $6 billion write-down of its cable businesses announced in August 2024.

Buffett wasn't around for the write-down – he had sold off roughly 30 million shares in 2023, then announced in early May 2024 that Berkshire had fully bailed on the position. That was the same day Paramount announced a 79% cut to its dividend and a wide earnings miss.

"I was 100% responsible for the Paramount decision," Buffett said at Berkshire's annual shareholder meeting. "It was 100% my decision, and we've sold it all and we lost quite a bit of money."

He's not exaggerating. PARA shares lost more than two-thirds of their value between the end of Q1 2022, when Berkshire reported it had opened the position and its May 2024 exit.

Energy Future Holdings

While virtually all of the attention paid to Warren Buffett's investments involves his equity decisions, one of his biggest failures came in the bond market.

In late 2007, Berkshire announced a $2.1 billion purchase of double-digit-yielding junk bonds from Energy Future Holdings Corporation, an electric producer that was primarily reliant on coal.

Buffett was making effectively the same bet that KKR, TPG Capital and Goldman Sachs Capital Partners made when they purchased the company (then called TXU) a couple of months earlier: that its coal-fired plants would become more competitive as natural gas prices increased.

They did – sharply, but briefly, before turning tail and plunging for years. Energy Future Holdings eventually filed for bankruptcy in 2014, saddling Berkshire with a loss of more than $870 million.

That year, Buffett admitted to not running the decision by Berkshire Vice Chair Charlie Munger.

"Most of you have never heard of Energy Future Holdings. Consider yourselves lucky; I certainly wish I hadn't," Buffett said. "Next time I'll call Charlie."

It wouldn't be the Oracle's last time getting the short end of the stick from Energy Future Holdings. In 2017, the company turned down a bid from Berkshire to buy power transmission company Oncor for $9 billion, opting instead to sell it to Sempra Energy (SRE) for $9.45 billion.

USAir

Curiously enough, one of Buffett's self-professed mistakes was a deal that technically resulted in gains.

In 1989, Buffett directed Berkshire to buy $358 million worth of convertible preferred shares from U.S. carrier USAir. Shortly thereafter, the dividend – typically the primary source of returns for preferred stocks – was suspended.

"In the 1990 Annual Report I correctly described this deal as an 'unforced error,' meaning that I was neither pushed into the investment nor misled by anyone when making it," Buffett admitted in a 1994 shareholder letter. "Rather, this was a case of sloppy analysis, a lapse that may have been caused by the fact that we were buying a senior security or by hubris. Whatever the reason, the mistake was large."

But that wasn't the end. A new CEO helped USAir rehabilitate and actually catch up on its missed dividend payments to Berkshire. In 1998, USAir redeemed the convertible preferreds for common shares, which Buffett sold at a profit.

The Oracle refused to spike the ball.

"But we then got very lucky," Buffett explained years later, in a 2007 shareholder letter. "In one of the recurrent, but always misguided, bursts of optimism for airlines, we were actually able to sell our shares in 1998 for a hefty gain. In the decade following our sale, the company went bankrupt. Twice."

In a single gaffe, Buffett was able to teach two lessons: the importance of taking responsibility for losses, as well as the importance of recognizing when we're not responsible for gains.

Other airline stocks

If only Buffett had learned from his USAir mistake.

"Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down. The airline industry's demand for capital ever since that first flight has been insatiable. Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it."

Those comments, made in the aforementioned 2007 shareholder letter, were a reflection on his USAir losses, but they also foreshadowed the failure he would suffer roughly a decade later.

In 2016, he dove headfirst into the airline industry – but rather than making a single concentrated bet, he spread his wealth by accumulating 10% stakes in American Airlines (AAL), United Airlines (UAL), Delta Air Lines (DAL), and Southwest Airlines (LUV).

By 2019, the trade was profitable, but … well, most of us can sympathize with what happened next.

All four airline stocks cracked under the weight of the COVID-19 pandemic. Buffett completely abandoned the position in early May 2020, having suffered steep losses.

To add insult to injury, Berkshire's exit came roughly around the bottom of the airlines' descent. A year later, those positions would've been worth roughly double what Buffett sold them for.

Berkshire Hathaway Textile Business

"Monumentally stupid." "The dumbest stock I ever bought."

These words were reserved not for any of the stocks mentioned above, but for the company that gave its name to Warren Buffett's $1 trillion empire.

Before Berkshire, the Oracle did his investing out of Buffett Partnership, Ltd. (BPL), which he established in 1956. In 1962, Buffett began acquiring shares of Berkshire Hathaway, then a declining textile manufacturer. He bought shares with an expectation that, as Berkshire sold off its mills, he would be able to sell the shares back at a profit … and indeed, in 1995, he struck an oral deal with Berkshire manager Seabury Stanton. But when the written tender offer came in under what he was told, he became angry and began aggressively buying a controlling stake in the company.

In 2010, Buffett told CNBC that, had he taken the money he poured into the textile business and invested it into the insurance company he bought in 1967 instead, Berkshire would've been worth some $200 billion more.

"… Berkshire Hathaway was carrying this anchor, all these textile assets. So initially, it was all textile assets that weren't any good. And then, gradually, we built more things onto it," Buffett said. "But always, we were carrying this anchor. And for 20 years, I fought the textile business before I gave up. [If] instead of putting that money into the textile business originally, we just started out with the insurance company, Berkshire would be worth twice as much as it is now."

Alphabet/Amazon

"Sometimes your best investments are the investments you don't make." It's a clever way of saying that investment success isn't just about putting your money in the right places – but also avoiding putting your money in the wrong places.

Unfortunately, sometimes, the opposite is true – our worst mistakes can occasionally be the investments we passed on.

Buffett has, on more than one occasion, fessed up to staying his hand when he shouldn't have. And two of those missed opportunities stick out like a sore thumb:

Amazon (AMZN) and Alphabet (GOOGL) … even though Berkshire directly owns one and indirectly owns the other.

In 2019, Buffett initiated a $900 million Amazon stake that has more than doubled. But in a CNBC interview, he said he was "an idiot for not buying" AMZN even earlier.

He's nothing if not consistent – Buffett had expressed regret about not buying Amazon several times before he finally took the plunge.

In 2017, he blamed "stupidity" on his inaction while lavishing praise on Amazon founder Jeff Bezos. And in 2018, he told CNBC: "It's far surpassed anything I would have dreamt could have been done. Because if I really felt it could have been done, I should have bought it. … I had no idea that it had the potential. I blew it."

As for Alphabet? During Berkshire's 2017 annual shareholder meeting, he said he missed out on buying Google, citing the company's $10-$11 per-click advertising rates charged to Berkshire subsidiary Geico.

However, while the Berkshire Hathaway stock portfolio still doesn't include Alphabet, the company still has exposure to it – through New England Asset Management (NEAM). Berkshire acquired NEAM when it bought reinsurer General Re in 1998. It's often referred to as Buffett's "secret portfolio" even though Buffett has no direct input in its holdings – which today include nearly 5,200 shares of GOOGL.

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Berkshire Hathaway (BRK.B) was once again a net seller of stocks in its most recent quarter. But if you think Warren Buffett, who will step down as CEO at the end of 2025, has caught the "AI is a bubble" bug, think again.

The Oracle of Omaha has been easing off equities and hoarding cash for quite a while. In the past three years, Berkshire was a net seller of stocks to the tune of $190 billion. Also noteworthy is that Berkshire hasn't engaged in stock buybacks since May 2024.

As a result, Buffett is running a sort of "barbell" portfolio. Berkshire, with a market cap of more than $1 trillion, holds $280 billion in stocks and a whopping $380 billion in cash.

Berkshire's cash pile has been boosted by comparatively high short-term interest rates, as well from pruning its portfolio. Buffett once again pared BRK.B's stakes in major long-term holdings such as Apple (AAPL), Bank of America (BAC) in the most recent quarter.

The Apple sales are particularly noteworthy. Not too long ago, the iPhone maker accounted for roughly 40% of Berkshire U.S. equity portfolio. Today, it's closer to 23%.

For some folks, these are highly disquieting developments. When one of the greatest investors of all time is selling massive amounts of stock in some of his favorite names, it's understandable if people believe they would feel better about it if only they knew why.

First things first, however. Buffett took pains to explain to Berkshire shareholders at their annual meeting in May that the iPhone maker is still, er, the Apple of his eye. (It would have been embarrassing not to, considering Apple CEO Tim Cook attended the event in person.)

If Buffett has a problem with AAPL, it's that the value of Berkshire's stake has grown tremendously at a time when he expects corporate tax rates to rise, probably sometime in the not-too-distant future.

As Buffett told the Berkshire faithful in August 2024: "If I'm looking at a 21% rate this year and then we're [paying] a lot higher percentage later on, I don't think you'll actually mind the fact later on that we sold a little Apple this year."

Perhaps the same thinking informed Berkshire's paring of its stake in Bank of America. The fact that owning more than 10% of a publicly traded company's shares triggers disclosure requirements large shareholders would rather avoid for as long as possible is another reason to bring one's ownership below a regulatory threshold.

What we know is that Buffett has been a net seller of equities for 12 consecutive quarters. Share repurchases have ground to a halt, too. For context, Berkshire repurchased more than $9 billion worth of BRK.B stock in all of 2023.

This is not the sort of behavior one typically sees in someone with excessive confidence in equity prices.

What gives?

Buffett stocks sales: An expert's take

If Warren Buffett is selling stocks and not buying back his own, that might tell us something about the Oracle of Omaha's view of the market, writes Nicholas Colas, co-founder with Jessica Rabe of DataTrek Research.

As a multidecade market watcher and market participant, Colas posits three potential explanations for Buffett's "unusual activity."

The first explanation is that Buffett is calling a top. "Buffett sees stocks as overvalued, including his own, and therefore susceptible to a deep correction or outright bear market," Colas writes.

It's interesting that Berkshire holds $380 billion in cash. "That’s a lot of firepower if markets see a sustained drop," notes Colas. "While Berkshire is not especially expensive, its multiple may be worrisome to a value investor."

Don't forget that Buffett likes nothing more than to be greedy when others are fearful. If stocks crash, Berkshire will be able to go shopping for assets at deep discount prices.

M&A on tap

Then there's the possibility that Berkshire is amassing cash to effect a truly whale-sized deal. "Berkshire may have identified one or more large acquisitions and is raising capital for those purchases," Colas writes. He adds that BRK.B's $380 billion in cash would comfortably buy all of Coca-Cola (KO) or Goldman Sachs (GS).

Colas emphasizes that the latter two are only examples, not risk arbitrage trading ideas. They do make sense, however. Coca-Cola, a Buy-rated Dow Jones stock, has been a core Berkshire holding for four decades.

As for Goldman Sachs, Berkshire has been a major shareholder in the past. (Recall that Buffett gave GS an injection of capital during the Great Financial Crisis.)

Passing the baton

Lastly, Colas postulates that it's possible Buffett is simply preparing the company for his departure as CEO. (He will stay on as chairman.)

Perhaps Buffett "wants to clear the decks for his successors to remake Berkshire's portfolio and rethink the company's stock repurchase program," Colas says.

"At 95 years old, he has certainly earned the right to ride off into the sunset as one of the greatest investors of all time."

The bottom line

The most important takeaway from Colas' note: "We wouldn't read too much into Buffett's latest moves since there is more than one logical explanation for his actions."

Let's pause on that for a moment, because it's important. As folks have noted before, if copying Warren Buffett's buys and sells was all it took to become the next Warren Buffett, there would be a lot more Warren Buffetts in the world.

As far as we know, there is still only one.

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Bank of America (BAC) stock is trading notably lower Wednesday after regulatory filings revealed that Warren Buffett's holding company, Berkshire Hathaway (BRK.B), sold more of its stake in the banking giant.

In a Securities and Exchange Commission (SEC) filing, Berkshire Hathaway reported the sale of about 5.8 million Bank of America shares, with the selling price ranging between $39.29 and $39.67 per share. The selling started on September 6 and ran through September 10.

All told, Berkshire Hathaway sold about 174.7 million shares of BAC stock over that time frame for about $7.2 billion, bringing its holding down to 858.2 million shares, according to CNBC. This knocks Bank of America down to the third-largest position in the Berkshire Hathaway equity portfolio, with the financial stock now perched behind Apple (AAPL) and American Express (AXP). Prior to the stock sales, Bank of America was Buffett's second-largest holding.

"I don’t know what exactly he's doing, because frankly, we can't ask him," said Bank of America CEO Brian Moynihan after being asked about Warren Buffett's selling during Barclays Global Financial Services Conference, according to CNBC. "But on the other hand, the market's absorbing the stock."

Berkshire has been paring back on its BAC stake in recent months and it halved its position in tech giant Apple (AAPL) in Q2. Buffett touched upon the selling of Apple at the annual Berkshire Hathaway meeting in May, saying he still believes in the economics of the tech giant's business but cut his stake in AAPL for tax purposes.

Is Bank of America stock a buy, sell or hold?

Bank of America has outperformed the broader market on a total return basis (price change plus dividends) so far in 2024, up 19% vs the S&P 500's 16% gain. And Wall Street is bullish on the financial stock.

According to S&P Global Market Intelligence, the average analyst target price for BAC stock is $45.53, representing implied upside of nearly 20% to current levels. Additionally, the consensus recommendation is Buy.

But not everyone has gone all in on the large-cap stock. Financial services firm CFRA Research, for instance, has a Hold rating and $39 price target on BAC stock.

The financial firm has seen "no growth on loans and deposits for the last two quarters," said CFRA Research analyst Kenneth Leon in an August 6 statement. Additionally, "BAC card income declined from late 2023 and we think the American consumer (middle class) is stressed with inflation and living costs." 

Leon adds that investment banking will benefit other large banks over Bank of America. The analyst's $39 price target is roughly in line with where BAC is currently trading.

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Warren Buffett's Berkshire Hathaway (BRK.B) initiated small positions in Ulta Beauty (ULTA) and Heico (HEI) in the second quarter, bought more Chubb (CB), pared stakes in eight names – most notably, Apple (AAPL) and Chevron (CVX) – and exited bets on Paramount (PARA) and Snowflake (SNOW).

There were other moves, as well, but the biggest news to come out of Berkshire's latest regulatory filing was already known. Buffett slashed Berkshire's stake in Apple by almost half. As previously reported, the holding company also reduced its exposure to top holdings such as Chevron and Bank of America (BAC).

Keep in mind that Buffett told Berkshire shareholders that the Apple sales were done for tax purposes, as he expects corporate tax rates to rise sometime in the not-too-distant future. The same thinking could apply to BRK.B's other sales, but then it's not unusual for Buffett to be a net seller of equities when stocks are trading at record levels.

All told, Berkshire sold roughly $77 billion in equities in Q2 – mostly Apple – and purchased less than $2 billion. At any rate, with exactly 400 million Apple shares still in the portfolio, Buffett would appear to be done selling his favorite stock.

Earlier this year, the greatest long-term investor of all time said AAPL is "even better" than American Express (AXP) or Coca-Cola (KO), two "wonderful" businesses that Berkshire has owned since the early 1960s and late 1980s, respectively.

Perhaps it's a coincidence, but Berkshire now holds 400 million AAPL shares – or the exact same number of shares it has held in KO for decades. 

Before we detail Berkshire's quarterly buys and sells, it's important to know that Buffett has always maintained a highly concentrated portfolio. The top five holdings account for almost three-quarters of its U.S. equities portfolio value, while the top 10 account for more than 90%. 

As Buffett likes to say, diversification is for people who don't know what they're doing.

Stocks Warren Buffett is buying

Berkshire picked up two new stocks in Q2: Ulta Beauty and Heico. Berkshire bought 690,000 shares of Ulta Beauty worth $266 million at the end of the Q2. With a weight of 0.1% in the Berkshire Hathaway portfolio, or its 30th largest position, the cosmetics retail chain won't be moving the needle much on Berkshire's returns.

Meanwhile, with a weight of just 0.07%, Heico is even less material. Berkshire accumulated a little more than 1 million shares in the supplier to the aerospace industry. The stake was worth $185 million as of the end of Q2. 

The comparatively small size of the purchases could mean they were initiated by Buffett's co-portfolio managers Ted Weschler or Todd Combs.

On the other hand, one of the largest additions Berkshire made in Q2 was probably the work of Buffett himself. As previously disclosed, BRK.B bought another 7 million shares in Occidental Petroleum (OXY). (Buffett has added to OXY on weakness in the past.) The holding company owned 255 million shares worth $16 billion at the end of the quarter. At 5.8% of its portfolio, OXY is Berkshire's sixth largest holding.

In another interesting move, Buffett also added to Chubb, the insurance company Berkshire first picked up just a quarter ago. The holding company increased its stake by 4.3%, or more than 1 million shares. With roughly 27 million shares worth $6.9 billion at quarter's end, Chubb accounts for a hefty 2.5% of the portfolio, or Berkshire's ninth largest holding.

Elsewhere, Berkshire fiddled with some of its smallest positions, upping its bets on rather immaterial holdings such as Liberty Sirius XM Group, Series C (LSXMK) and Liberty Sirius XM Group, Series A (LSXMA). Note that the company cut its stakes in the tracking stocks last quarter. Berkshire also bought more Sirius XM Holdings (SIRI) – a position it reduced in Q1.

Stocks Warren Buffett is selling

As noted above, Apple accounted for almost all of Berkshire's Q2 sales. Other reductions included Chevron, a Buy-rated Dow Jones stock, which Buffett first purchased four years ago. In Q2, Berkshire cut CVX by 3.6%, or 4.4 million shares. With 119 million shares worth $18.6 billion at the end of the quarter, the integrated oil major is Berkshire's fifth largest holding.

Other sales included a more than 20% reduction in Capital One Financial (COF). Berkshire sold 2.7 million shares in the financial services company in Q2, bringing its position down to 9.8 million shares worth $1.4 billion. With a 0.49% weight in the portfolio, COF is Berkshire's 19th largest bet. 

Berkshire also continued to clean and prune a number of its mid-level equity holdings, paring its stakes in T-Mobile US (TMUS), Louisiana Pacific (LPX), Liberty Media (LLYVK), Liberty Media (LLYVA) and specialty retailer Floor & Decor (FND).

Buffett also closed out its stake in Paramount, dumping all 7.5 million shares. The company first bought PARA in early 2022. It didn't work out.

Lastly, Berkshire exited its position in Snowflake (SNOW), which is believed to have been the work of subaltern Todd Combs. Berkshire made a rare bet on an initial public offering (IPO) with Snowflake in the third quarter of 2020. SNOW has an all-time total return of negative 16%.

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Warren Buffett's Berkshire Hathaway (BRK.B) slashed its stake in Apple (AAPL) by almost half during the second quarter, further rattling a tech sector already under scrutiny over its massive spending on AI – and naturally unnerving some Apple shareholders, too.

After all, Apple stock has been the single largest position in the Berkshire Hathaway equity portfolio for years, typically carrying a weight in excess of 40%. And yet Buffett has been paring Berkshire's enormous Apple stake at an alarming rate in 2024.

He's also taken something off the top of Berkshire's second largest holding, Bank of America (BAC).

Buffett has said his preferred holding period is forever. It's also important to know that Buffett is not, and has never been, a market timer. Furthermore, he has had nothing but praise for Apple – calling it "Berkshire's third business" – and openly admires Bank of America CEO Brian Moynihan. 

So what's going on?

Stay tuned for churn

We won't get the full details of which stocks Warren Buffett bought and sold in the second quarter until Berkshire Hathaway discloses its changes in holdings after the market closes on August 14. 

What we do know now is that this isn't the first time Buffett has taken a big bite out of Berkshire's Apple stake this year. As we wrote at the time, BRK.B cut its position in AAPL by 13% in the first quarter. Keep in mind that Buffett was explicit that this was done for tax purposes: 

"Buffett took pains to explain to Berkshire shareholders at their annual meeting in Omaha on Saturday that the iPhone maker is still, er, the Apple of his eye. (It would have been embarrassing not to, considering Apple CEO Tim Cook attended the event in person.)"

If Buffett has a problem with AAPL, it's that the value of Berkshire's stake has grown tremendously at a time when he expects corporate tax rates to rise, probably sometime in the not-too-distant future. 

As Buffett told the Berkshire faithful: "If I'm looking at a 21% rate this year and then we're [paying] a lot higher percentage later on, I don't think you'll actually mind the fact later on that we sold a little Apple this year."

Buffett pointed out that Berkshire's corporate tax rate was 35% just a few years ago. Back in the late 1960s, it was more than 50%. This man has been around a long time. He knows tax policy is never written in stone.

Perhaps Buffett's calculus explains the thinking behind the BAC sales too. As with Apple, Berkshire has enjoyed outsized returns from its investment in Bank of America. Indeed, Buffett liked the bank so much that Berkshire received special regulatory approval to acquire more than 10% of its shares outstanding. That's commitment.

The bottom line is that whatever Buffett is up, it's actually sort of irrelevant. He is a professional capital allocator. It's his job to maximize the returns on the capital entrusted to him. You either trust Warren Buffett or you don't. If you don't trust him, fine. You're not going to hurt his feelings. His track record sort of speaks for itself.

More selling to come

If today's news bothered you, you might want to skip next Wednesday. That's because Berkshire Hathaway tends to be a net seller of equities when stocks are at record highs. 

The holding company sold $77 billion worth of stock in Q2, mostly Apple. But do not be surprised if we learn that Buffett & Co. trimmed or exited positions in any number of other holdings when Berkshire files its Form 13F with the Securities and Exchange Commission after markets close on August 14. 

Buffett has this funny habit of trying to buy stocks when they are selling at lower prices rather than higher prices. Stocks are pretty pricey these days. Buffett is selling. What's the mystery?

By the way, some folks might try to use Buffett's buys and sells as signals for what to do with their own portfolios. 

That would be silly. 

As noted above, Buffett is not a market timer. This is the man who wrote in The New York Times in October 2008 that he was buying stocks. The market didn't bottom until months later, in March 2009. 

"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful," Buffett said. 

No, Buffett didn't bottom-tick the S&P 500's 50% collapse. The market fell another 28% from the time he penned that op-ed to equities' nadir. And all Buffett did was buy shares in great companies at cheaper and cheaper prices, probably the entire way down. (Berkshire shareholders then benefited by riding those prices all the way back up.)

As much fun as it might be to see which stocks Warren Buffett is buying and selling, you cannot copy his moves and expect to get the same returns. There are a bunch of reasons for this, but let's keep it simple: Buffett has access to a massive pile of really cheap capital and you don't.

You're no Warren Buffett

Berkshire's timing could have been better. It didn't do market sentiment any favors by releasing its results ahead of a global rout in equities that was mostly sparked by what's happening to the Japanese yen. But that's not on Buffett.

Markets go down as well as up. Pullbacks are normal. "The average drawdown from peak-to-trough in a given year in the U.S. stock market going back to 1928 is -16.3%," notes Ben Carlson, director of institutional asset management at Ritholtz Wealth Management. "Since 1950, the S&P 500 has had an average drawdown of 13.6% over the course of a calendar year."

Volatility is the price of admission to the stock market. The greater the reward, the greater the risk. If you can't handle the equity risk premium, stick to bonds.

In the meantime, leave professional capital allocation to the pros. Word is Warren Buffett is pretty good at it.

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Apple (AAPL) stock declined in an up market Monday after Berkshire Hathaway (BRK.B) disclosed it cut its stake by 13% in the most recent quarter. 

Is Warren Buffett, Berkshire's chairman and CEO, losing faith in what is by far the company's largest holding?

Not at all.

Buffett took pains to explain to Berkshire shareholders at their annual meeting in Omaha on Saturday that the iPhone maker is still, er, the Apple of his eye. (It would have been embarrassing not to, considering Apple CEO Tim Cook attended the event in person.) 

For the record, the greatest long-term investor of all time said that AAPL is "even better" than American Express (AXP) or Coca-Cola (KO), two "wonderful" businesses that Berkshire has owned since the early 1960s and late 1980s, respectively.

Indeed, during the question and answer portion of the meeting, Buffett was asked: "[Has your] view of the economics of Apple business or its attractiveness as an investment changed since Berkshire first invested in 2016?"

Buffett: "No. But we have sold some shares."

Why? Because corporate taxes are "likely" to go up "later." He figures the federal government – at some unknown future date – will have to raise taxes to reduce the deficit. 

"With current fiscal policies, I think something has to give," said Buffett. "I think that higher taxes are quite likely."

That's not exactly a heretical idea, regardless of your policy preferences or political inclinations. It's also kind of irrelevant. Buffett is a steward of other people's capital. It's his job to maximize their returns. 

"If I'm looking at a 21% rate this year and then we're [paying] a lot higher percentage later on, I don't think you'll actually mind the fact later on that we sold a little Apple this year," Buffett said.

He noted that Berkshire's corporate tax rate was 35% just a few years ago. Back in the late 1960s, it was more than 50%.

Buffett on paying taxes

Mind you, Buffett is no tax dodger. Here are some of the things he said about taxes when explaining the Apple stock sales:

• "Almost everybody I know pays a lot more attention to not paying taxes than I think they should."
• "We don't mind paying taxes at Berkshire."
• "We at Berkshire always hope to pay substantial federal income taxes. We think it's appropriate [to pay taxes] to a country that's been as generous to our owners. It doesn't bother me in the least to write that check. I would really hope that with all that America has done for all of [Berkshire shareholders], it shouldn't bother you that we do it."

The bottom line is that Berkshire doesn't mind paying taxes. But if they're going to go up, better to pay them at a lower rate today than a higher rate tomorrow. 

Apple by the numbers

Apple is still Berkshire Hathaway's largest holding.

At one point last year AAPL accounted for about half of the holding company's U.S. stock portfolio. However, with 790 million shares (down from 905 million at the end of 2023), Apple is now somewhere in the lower-to-mid-40% range.

That's a hefty allocation, but then Berkshire has always maintained a highly concentrated portfolio. Including its positions in Japanese brokerages, Berkshire's top five holdings – AAPL, Bank of America (BAC), AXP, KO and Chevron (CVX) – comprise about 75% of its equity portfolio.

We won't know the exact breakdown of Berkshire's holdings until it files its Form 13F with the Securities and Exchange Commission after the market closes on May 15.

Whatever the filing reveals, Apple bulls needn't fret about Berkshire Hathaway losing its taste for Apple.

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Warren Buffett stepped down as CEO of Berkshire Hathaway (BRK.B) at the end of 2025, and although he remains chairman, the holding company's stock portfolio is under new management.

Buffett always handled the largest positions in the Berkshire Hathaway portfolio, but those days are no more. The greatest long-term investor of all time still keeps his hand in and plays a key advisory role. Investment manager Ted Weschler also continues to manage perhaps 5% of Berkshire's stock investments.

But there's no question that CEO Greg Abel is now calling the shots.

In the first quarter of 2026, Abel reduced or closed out positions in 22 names, many of them thought to be picks by former investment manager Todd Combs, who decamped to JPMorgan Chase (JPM) at the end of last year.

The overhaul shouldn't come as a shock. After all, Berkshire's portfolio has been changing dramatically for years now. Although old-guard favorites such as American Express (AXP) and Coca-Cola (KO) still form the core of the portfolio, Buffett & Co. have taken a shine to names such as Apple (AAPL), most recently, Alphabet (GOOGL).

One thing that hasn't changed, however, is Buffett's preference for maintaining a highly concentrated portfolio.

Excluding the company's Japanese brokerage stocks and other overseas equities, Apple alone accounts for more than a fifth of Berkshire's U.S. stock portfolio, according to data from WhaleWisdom. (That's down from more than 40% at its peak.)

Furthermore, Berkshire's top five U.S. equity holdings comprise about 67% of its portfolio value, while the top 10 account for 90%.

As Buffett likes to say, diversification is for those who don't know what they're doing.

Regardless, whether we're talking about Berkshire's biggest bets or the scores of stocks it maintains at the margins, Buffett's focus shifted after the COVID-19 pandemic.

Berkshire used to see value in a host of big bank stocks. Today, the holding company is far more selective. Healthcare stocks and payments processors were a long-time Buffett bet. But not anymore.

If you want to know which stocks Berkshire is buying and selling, look no further than our portfolio analysis.

Price, share totals and other data as of March 31, 2026. Sources: Berkshire Hathaway's SEC Form 13F filed May 15, 2026, for the reporting period ended March 31, 2026; and WhaleWisdom.

The Berkshire Hathaway portfolio

Stocks Berkshire is buying

Buffett famously avoided airlines for decades. When he finally did come around, his timing was terrible, spreading his bets among a handful of major carriers not too long before COVID-19 set the industry into a tailspin. As a result, he quickly closed out those positions.

So it's a mark of change that Berkshire initiated a stake in Delta Air Lines in Q1, buying 39.8 million shares worth $2.6 billion. With a portfolio weight of a bit more than 1%, the air carrier is Berkshire's 14th-largest holding.

As noted above, Berkshire also made a bet on the consumer discretionary sector, picking up 3 million shares in Macy's. The tiny position in the department store operator was worth $55 million as of the end of Q1. At less than 0.1% of the portfolio, M stock is Berkshire's 27th-largest investment.

More interestingly, Berkshire more than tripled its stake in Google parent Alphabet (GOOGL). The holding company now owns 54 million shares worth $15.6 billion as of the end of Q1. With a weight of 5.9%, the Google parent's Class A shares are Berkshire's 7th-largest U.S. equity holding. Berkshire first bought GOOGL in the third quarter of 2025.

Relatedly, Berkshire initiated a stake in Alphabet Class C (GOOG) stock, picking up 3.6 million shares during the first three months of the year. With a value of $1 billion, the Class C investment accounts for Berkshire's 19th-largest holding.

In another vote of confidence in an existing position, Berkshire tripled its holdings of The New York Times Co. (NYT), adding another 10 million shares during Q1. With a market value of $1.3 billion, or 0.5% of the portfolio, NYT is Berkshire's 17th-largest investment — up from 30th place when it first bought the stock at the end of 2025.

Berkshire also added to homebuilder Lennar (LEN), an investment Berkshire initiated last year. The holding company bought another 3 million shares to bring its total stake to 10 million. With a market value of $877 million, LEN accounts for 0.3% of the portfolio, or the 21st-largest investment. Berkshire picked up more Lennar Class B (LEN.B) stock, as well. However, at less than 0.1% of the portfolio, it's essentially immaterial to a company of Berkshire's size.

Stocks Berkshire is selling

Berkshire reversed course on Chevron (CVX) in Q1, cutting its position in the integrated oil major by 35%. After boosting its stake in Q4, the holding company sold 46 million shares to start the year. Berkshire, which has owned the Buy-rated Dow Jones stock since the fourth quarter of 2020, still owns more than 84 million shares worth $17.5 billion as of quarter's end. And with a weight of more than 6.6% in the portfolio, CVX remains Berkshire's fifth-largest holding.

In another reprise from previous quarters, Buffett once again sold Bank of America (BAC) stock, which has been a major holding since 2017. Don't panic, though. Berkshire reduced its investment in the nation's second-largest bank by assets by less than 1%.

With 513 million shares worth more than $25 billion as of March 31, BAC slipped one place, to Berkshire's No. 3 holding.

In other sales, Berkshire continued to ease up on DaVita (DVA), its 11th-largest holding, this time 5%. The company also massively reduced exposure to Constellation Brands (STZ), a stake it initiated at the end of 2024, by 95%.

Elsewhere, Berkshire cut its stakes in Liberty Live Holdings (LLYVK) and Nucor (NUE), but with portfolio weights of less than 1%, respectively, these names don't move the needle.

The biggest changes came in the form of exits. After slashing its stake by 77% last quarter, Berkshire closed out its position in Amazon.com (AMZN).

A number of other familiar names were also banished from the portfolio. Apparently Berkshire is no longer a fan of payments processors, having exited its stakes in both Visa (V) and Mastercard (MA). The holding company owned both stocks since 2011.

Also getting the boot were Charter Communications (CHTR), Diageo (DEO), UnitedHealth Group (UNH), Domino's Pizza (DPZ), Heico (HEI), Lamar Advertising (LAMR), Formula One Group (FWONK), Atlanta Braves Holdings (BATRK), Pool Corp. (POOL), Allegion (ALLE), Aon (AON), Liberty Latin America Class A (LILA) and Liberty Latin America Class C (LILAK).

Berkshire's top five holdings

• Warren Buffett has always maintained a concentrated Berkshire Hathaway equity portfolio.
• The top five positions in the Berkshire portfolio account for 67% of its total value.
• Apple, American Express, Coca-Cola, Bank of America and Chevron are the five largest holdings.

As noted above, Buffett has always maintained a highly concentrated portfolio. Indeed, he's said that "diversification makes very little sense for anyone who knows what they're doing."

The stocks below accounted for 67% of Berkshire's total U.S. equities portfolio value as of the end of Q1. If you want to know what's driving the bulk of the Buffett's returns, check out the names below.

Apple

Buffett has called Apple "Berkshire's third business," so it should come as no surprise that the iPhone maker routinely takes the top spot among the holding company's positions.

True, Berkshire has pared its stake in Apple in recent quarters, but Buffett has assured shareholders he adores AAPL as much as ever. BRK.B's former CEO took pains to explain that the iPhone maker is still — er — the Apple of his eye.

For the record, the sales were for tax purposes. The greatest long-term investor of all time said that AAPL is "even better" than American Express or Coca-Cola, two "wonderful" businesses that Berkshire has owned since the early 1960s and late 1980s, respectively.

More recently, Buffett said he wasn't comfortable with Apple accounting for such an outsized weight in the portfolio.

As Apple's sixth-largest shareholder, Berkshire's continuing interest in the iPhone maker has market-wide implications.

American Express

Berkshire closed out its stakes in payments processors Visa (V) and Mastercard (MA), but it continues to adore American Express.

Buffett took his first stake in AmEx in the 1960s, and it’s still paying off a half-century later.

There's a lot to love about AmEx: Its management is strong; it's a dominant brand in the industry; and it generates copious amounts of free cash flow — the money left after essential capital expenditures are made that can be used to finance dividends and stock buybacks.

The current yield on the dividend isn't eye-catching, but it is safe and growing. The stock is only slightly more volatile than the broader market. Those are attributes that will help long-term investors sleep better at night.

Coca-Cola

Buffett famously drank Coca-Cola for 52 years before investing in the stock.

He finally took the plunge in 1988. "We expect to hold these securities for a long time," Buffett wrote back then of his new stake in Coke in a letter to Berkshire shareholders. "In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."

As of the end of Q1 2026, Berkshire owned 9.3% of Coca-Cola’s outstanding shares. Analysts like the stock's prospects, too. Wall Street gives KO a consensus recommendation of Buy, with strong conviction.

Bank of America

Bank of America is Berkshire Hathaway's fourth-largest holding. Buffett first acquired BAC stock in Q3 2017. Berkshire is the bank's second-largest institutional shareholder.

In an April 2023 media appearance, Buffett said that he unloaded many of the holding company's bank stocks because he didn't think they were near as solid investments as they once were. As for Bank of America, he said this about the bank and its CEO:

"I like [CEO] Brian Moynihan enormously. And I just don't wanna, I don't wanna sell it," the then 92-year-old CEO told CNBC's Becky Quick.

"But I did sell banks that we'd owned for 25 or 30 years. And if they asked me why I did it, I told them — I just think the system isn't set up quite right in terms of connecting punishment to culprits on something that's important," Buffett added.

Chevron

Thanks to the outlook for crude oil prices, the energy sector is enjoying steady and predictable free cash flow. Chevron, the only energy name among all 30 Dow Jones stocks, is returning some of this cash to shareholders through dividends and buybacks.

Make no mistake: There are few things Buffett likes more than dividends and buybacks.

It also helps that oil is a solid hedge against inflation. With inflation still running ahead of the Federal Reserve's 2% target, commodities should remain in favor.

Berkshire's massive pile of cash, equivalents and short-term investments is much better put to use in an asset such as Chevron under such conditions.

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Business partners for nearly 50 years and friends for longer, Charlie Munger was probably one of the few people on the planet who felt comfortable telling Warren Buffett, the greatest investor of all time with $120 billion in personal wealth to prove it, that he was wrong. 

Munger, vice chairman of Berkshire Hathaway (BRK.B), died on Nov. 28, just a month shy of his 100th birthday. Already rich by the time he joined Buffett at Berkshire in the mid-70s, Munger possessed the wealth – and had the temperament – to be the opposite of a yes man. And BRK.B shareholders are all very much richer for it.

Just ask Warren Buffett himself. He's the first to admit that he couldn't have done it without Munger, who saved him from many an ill-conceived move. Indeed, Munger shot down his ideas so frequently that Buffett called him the "Abominable No-Man."

Buffett has said that Munger changed his thinking in profound ways, instilling in him a relentless focus for buying "wonderful companies at fair prices, rather than fair companies at wonderful prices."

Munger's upbringing during the Great Depression naturally informed his view of what constituted a good price. As a teenager in the 1930s, he worked in a grocery store for 20 cents an hour. Adjusted for inflation, that's around four-and-a-half bucks an hour today, which is still a terrible wage. Munger said he never intended to get rich. "I wanted to get independent," he explained. "I just overshot!"

Munger: The big money is in the waiting

Already being rich and independent no doubt helped even the playing field for Munger when he agreed to become Buffett's second banana. And for whatever reasons, they always had tremendous chemistry. Buffett's folksy, optimistic style perfectly complemented Munger's acerbic, more skeptical view of things. We'll never know what blunders Munger helped Buffett avoid – or which opportunities only the two, working together, could see and then seize – but suffice to say Berkshire wouldn't be Berkshire without Munger. It follows that Buffett wouldn't be Buffett without Munger, either.

Berkshire Hathaway stock has famously clobbered the broader market for decades. That's why people call Warren Buffett the greatest long-term investor of all time. At Kiplinger, we naturally like to focus on stocks Warren Buffett is buying and selling, as well as the broader Berkshire Hathaway equity portfolio. 

Munger's passing reminds us that Berkshire Hathaway is much more than the value of its stock holdings. 

Buffett is thought to manage about 90% of Berkshire's equity portfolio, with co-managers Ted Weschler and Todd Combs handling the remaining 10%. Presumably Buffett consulted Munger when handling his end of the portfolio, but it's important to remember roughly half of the company's value stems from its scores and scores of wholly owned subsidiaries and other ventures.

These were the deals – the supreme decisions of how to allocate Berkshire's capital – in which having Munger around really paid off. Buying a railway operator for $26 billion, as Berkshire did with BNSF in 2010, is not something anyone should do lightly.

It's also important not to let a massive and growing cash pile tempt you to do something stupid, like overpay for acquisitions. Buffett has bemoaned for years the lack of "whale-sized" acquisition targets, even as Berkshire's cash pile swells. Sitting on the sidelines, while waiting for lower prices, that's Munger's DNA, and it will serve any investor well:

Buy wonderful, well-managed businesses (or stocks in such companies) at great prices – and then have the patience to let these productive businesses (and their share prices) grow. 

As Munger always stressed, "the big money is not in the buying or selling, but in the waiting." 

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The best books on investing break down one of the biggest barriers for folks wanting to build wealth: knowledge, or the lack thereof.

Most people might think that money is the largest hurdle for those wanting to start investing in the stock market. But with funds and apps that let you get started for as little as $1, you can invest with your pocket change.

Instead, what is arguably the greatest obstacle facing both beginning and seasoned investors alike is not knowing what to do.

Unfortunately, investing is not part of most educational curricula, so it's up to investors to create their own course, so to speak. The good news is that it's never been easier to do so thanks to the plethora of engaging books on investing available.

The bad news is that the abundance of choices can be a little overwhelming. This article will help you narrow it down.

Here, we look at six of the best books for investors, from quick reads you can knock out on your morning commute, to hefty tomes that leave nothing uncovered. And if you want to buy any of these books on investing for yourself or for someone on your holiday shopping list who's just getting started with their investing journey, we've included links to purchase pages.

Author: William J. Bernstein

Purchase: Amazon.com / Barnes & Noble

Starting with the easiest – or certainly the shortest – read, William Bernstein's primer is one of the best books on investing for those looking to start their journey toward building wealth. At less than 50 pages, you could finish it over breakfast and have your first trade placed by lunch. 

Bernstein proposes a strategy that's so straightforward a seven-year-old could do it. The whole process, Bernstein explains, takes only 15 minutes per year and has been shown to outperform 90% of financial professionals over the long run.

Best of all: you can get this book for free. Bernstein's website, Efficient Frontier, allows visitors to download If You Can in Kindle and Adobe Acrobat formats at no cost. (But at about six bucks, a paperback version won't break the bank and lets you support the author in the process.)

Author: Howard Marks

Purchase: Amazon.com / Barnes & Noble

No matter what type of beginning investor you are – "whether fresh out of business school or in the middle of your career looking to invest your retirement savings" – Ben Sayer, alternative investments group head at MAI Capital Management, recommends reading The Most Important Thing Illuminated by chairman and cofounder of Oaktree Capital Management, Howard Marks.

The book distills a career's worth of Marks' wisdom and client memos into less than 250 pages. In other words, it illuminates the important stuff. The latest edition also includes insights from other famed investors and a forward by the "guru to Wall Street's gurus," Bruce C. N. Greenwald.

Marks gives beginning investors what they need without going "too deep into the weeds on any given topic to exclude anyone without a finance background," Sayer says. "This book won't give you succinct, actionable insight to immediately implement in your portfolio, but hopefully it will arm you with a timeless decision-making framework to use whenever you need to make an investment decision."

Author: Niall Ferguson

Purchase: Amazon.com / Barnes & Noble 

Perspective is key when it comes to investing. It's all too easy for market turbulence to shake your confidence and make you question if doomsday has come at last. But in reality, whatever is happening today is likely no worse than what has come in the past. If investors have survived harsher downturns before and come out ahead in the long run, you probably can too.

Learning a little history can go a long way toward helping put the present into perspective, and this is just what you get from Niall Ferguson's book.

It provides readers with a solid base through a "historical perspective of market bubbles and the risks of focusing too much on short-term trends," says Phillip Hamman, president and CEO of Linscomb Wealth. 

The most recent edition takes you from the Italian Renaissance up to the 2008 Financial Crisis and even bitcoin.

Author: Louis C. Engel

Purchase: Amazon.com / Barnes & Noble

Technology has changed the way we invest, from the advent of robo advisers and digital wealth platforms to fractional share investing, but the fundamentals of what a stock is and how you should invest in the market remain the same.

How to Buy Stocks by Louis Engel is "a timeless classic on investing" that "incorporates everything an investor would need to know to get started," says Andrew Crowell, a financial adviser and vice chairman of wealth management at D.A. Davidson.

In one of the best books on investing available, Engel creates a fictional company called Acme through which he illustrates the process of becoming a publicly traded company.

"Taking the reader step-by-step from business concept to capital raising, Engel expertly but straightforwardly illustrates how capitalism and the financial markets work," Crowell says. "It's an excellent primer for individuals who want to begin investing or simply want to have a better understanding of how the system works."

Author: Jason Zweig

Purchase: Amazon.com / Barnes & Noble 

"The difference between success and failure with investing oftentimes boils down to human psychology and behaviors," Hamman says. To help you develop the psychology and behaviors for long-term investing success, he recommends reading Jason Zweig's Your Money & Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich.

In the book, Zweig draws on scientific research – including experiments on his own brain — to help you make better financial decisions and avoid bad ones that even the smartest people fall prey to. 

And don't worry about it being too theoretical: Zweig expertly combines science and practicality to ensure you walk away with actionable steps to be a better investor today.

Author: Robert G. Hagstrom

Purchase: Amazon.com / Barnes & Noble

You know you're entering classic investing books territory when you find one that's in its 30th-anniversary edition. The Warren Buffett Way has earned its reputation as a Wiley Investment Classic after three decades of educating investors on the strategies that helped the famed Oracle of Omaha earn his own reputation as an investing guru. For this reason, Hamman recommends the book to both beginning personal and professional investors.

In the book, Hagstrom examines the twelve tenets of Buffett's strategy and each of the major investments that have helped build his success. Along the way, you'll gain the insights you need to apply those same strategies in your own portfolio while avoiding some of the most common pitfalls. 

The latest edition includes even more wisdom from Buffett's longtime business partner and former vice chairman of Berkshire Hathaway, Charlie Munger. You'll also get a history of the Berkshire Hathaway common stock portfolios dating back to 1977.

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On the surface, Warren Buffett and Oprah Winfrey couldn’t be more different in their backgrounds and careers. Yet both have built empires using similar methods. It’s what Buffett calls his “circle of competence” or, as Winfrey explained it in the miniseries Making Oprah, “running your own race.” 

Whether it's Buffett’s nearly 10% stake in Coca-Cola, which he drinks several cans of a day, or Winfrey’s 10X on Weight Watchers stock, an area she’s often discussed her familiarity with, the two follow a similar investing tenet. They both continually choose areas they know best, which they know how to capitalize on in ways others don’t. 

For these two financial icons, it’s all about knowing yourself and your strengths – and then playing to them. They have both demonstrated the effectiveness of the strategy of defining your own lane and committing to it, without getting distracted by something flashy someone else is doing.

Warren Buffett's key to success

“You don't have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital,” Buffet said in his 1996 letter to Berkshire Hathaway shareholders.

In investing, Buffett emphasizes the importance of recognizing your circle of competence and staying within its boundaries. The concept is a mental model he developed with Charlie Munger, vice chairman of Berkshire Hathaway. It revolves around getting familiar with areas that match your skills, expertise, and experience. 

According to Buffett, understanding your circle of competence can lead to better financial decisions and life choices. This explains why Buffett is known for investing in companies like Coca-Cola, Apple, Bank of America, and AmEx – companies he’s personally familiar with within his circle of competence. He doesn't just invest in stocks, but the companies these stocks represent.

Oprah Winfrey's success strategy

“I hope the way you spend your money is in line with the truth of who you are and what you care about,” Winfrey wrote in her 2014 book, What I Know For Sure. 

Winfrey's “run your own race” concept encourages focusing on yourself and not getting preoccupied with what others are doing. This mindset helped Oprah build a media empire and an investment portfolio worth nearly $3 billion. 

The core idea behind “run your own race” is that comparing yourself to others or worrying about their progress distracts you from your own goals. Winfrey emphasizes that it's fine to learn from others, but not to the extent that it hinders your ideas and confidence. 

While working at Harpo Studios as an undergraduate, I encountered the “run your own race” mindset. Producers were consistently encouraged to concentrate on their own work and not become preoccupied with the activities of other producers or the strategies of other shows. This way of thinking was ingrained throughout the entire organization.

Lessons from Winfrey and Buffett

These principles from Winfrey and Buffett can be applied to achieve greater financial success and personal satisfaction:

• Define Your True North: Understand your authentic self, core values, and deepest aspirations – the guiding principles in your life. 
• Identify Your Knowledge and Expertise: Take the time to recognize your strengths and apply them to your financial and life decisions. 
• Narrow Your Focus: Avoid comparing yourself to others and instead concentrate on what you can accomplish. 

Winfrey and Buffett excel at understanding themselves. Knowing your true north sets the stage for comprehending your circle of competence and running your own race. 

Both the “circle of competence” and “running your own race” mindsets are rooted in self-awareness, identifying your areas of expertise, and using them to excel in your unique domain.

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Warren Buffett's Berkshire Hathaway (BRK.B) initiated a small stake in The New York Times Company (NYT) in the fourth quarter but continued to pare back bets on core holdings such as Apple (AAPL) and Bank of America (BAC).

Buffett, who stepped down as CEO at the end of 2025 but remains chairman of the holding company, continued to cut Berkshire's exposure to equities as the market hit record highs.

In what was perhaps a nod to stretched valuations, Berkshire was once again a net seller of stocks, with net sales of approximately $4 billion in Q4. The holding company has now sold more stocks than it has bought for 13 consecutive quarters.

While exact figures will have to wait until Berkshire releases quarterly earnings on February 28, it's estimated that the company was a net seller of stocks to the tune of $14 billion in 2025.

Over the past three years, Berkshire sold more than $190 billion worth of equities. Also noteworthy is that Berkshire hasn't bought back its own stock since May 2024.

With a market cap of more than $1 trillion, Berkshire maintains a sort of "barbell" portfolio, as it holds approximately $280 billion in stocks and more than $380 billion in cash.

Although Berkshire has become more cautious, it did do some shopping in Q4. In addition to buying NYT, the holding company increased stakes in four of its holdings.

Before we get into Berkshire's most recent buys and sells, it's important to know that Buffett has always run a highly concentrated portfolio.

Excluding the company's Japanese brokerage stocks and other overseas equities, Apple alone accounts for more than a fifth of Berkshire's stock portfolio. (That's down from more than 40% at its peak.)

Furthermore, Berkshire's top five U.S. equity holdings comprise about 70% of its portfolio value, while the top 10 account for 88%.

As Buffett likes to say, diversification is for those who don't know what they're doing.

Also, please note that while Warren Buffett traditionally managed Berkshire Hathaway's largest equity positions, the management structure has officially transitioned.

Buffett has confirmed that CEO Greg Abel now oversees the entire portfolio, supported by investment manager Ted Weschler. Notably, Todd Combs – who previously managed a portion of the portfolio alongside Weschler – departed in late 2025 to take a role at JPMorgan Chase (JPM).

Stocks Warren Buffett is buying

Berkshire boosted its biggest bet in the energy sector, increasing its stake in Chevron (CVX) by almost 7%, or more than 8 million shares. Berkshire, which has owned the Buy-rated Dow Jones stock since the fourth quarter of 2020, now owns more than 130 million shares worth $19.8 billion as of the end of Q4. With a weight of more than 7% in the portfolio, CVX is Berkshire's fifth-largest holding.

In a boost of confidence for Chubb (CB), Berkshire once again upped its stake in the insurer. The holding company, which first bought CB in the first quarter of 2024, increased its position by more than 9%, or almost 3 million shares. With a market value of $10.7 billion as of December 31, CB remains the eighth-largest Berkshire Hathaway holding.

Elsewhere, Berkshire made minor additions to four of its smaller holdings.

Berkshire continued to add to its investment in Domino's Pizza (DPZ), which it initiated in the third quarter of 2024. The holding company increased its stake by more than 12% and now owns nearly 3.4 million shares in the pizza chain worth $1.4 billion as of the end of Q4. However, with a weight of 0.5% in the portfolio, DPZ is Berkshire's 20th-largest position.

As noted above, Berkshire initiated a small stake in NYT, purchasing 5 million shares worth $352 million at the end of Q4. With a weight of about 0.1%, the stake is Berkshire's 30th-largest position.

Lastly, Berkshire made an incremental and essentially immaterial additional investment in Lamar Advertising (LAMR). With a market value of $152 million, LAMR accounts for less than 0.1% of the portfolio.

Stocks Warren Buffett is selling

Buffett continued to pare back Berkshire's position in Apple, which, as recently as 2024, accounted for roughly 40% of its U.S. holdings. The company sold more than 10 million shares over the course of the fourth quarter – a 4% reduction – but Buffett has hardly lost faith in the iPhone maker.

With nearly 228 million shares worth $62 billion as of December 31, AAPL remains Berkshire's largest holding by far, accounting for nearly 23% of the portfolio's total value.

In another reprise from previous quarters, Buffett once again sold Bank of America stock, which has been a major holding since 2017. Berkshire reduced its investment in the nation's second-largest bank by assets by another 9% in Q4, selling more than 50 million shares.

With 517 million shares worth more than $28 billion as of December 31, BAC is Berkshire's third-largest holding, accounting for more than 10% of the portfolio value.

In other sales, Berkshire continued to ease up on DaVita (DVA), its 11th-largest holding, but only by 1.3%. The company also reduced exposure to Constellation Brands (STZ), a stake it initiated at the end of 2024, by 3%.

Other stocks Berkshire pared its stakes in included Aon (AON), Pool Corp. (POOL), Liberty Latin America Class A (LILA) and Atlanta Braves Holdings (BATRK).

Interestingly, Berkshire's most significant reduction in percentage terms was its stake in Amazon.com (AMZN). The conglomerate cut its position by 77%, offloading nearly 8 million shares of the Magnificent 7 stock. With a market value of approximately $525 million, Amazon has tumbled from Berkshire's 17th-largest holding at the end of Q3 to its 27th-largest position as of year-end 2025.

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Warren Buffett, the chairman of Berkshire Hathaway (BRK.A, BRK.B), is the most successful investor of our time.

His daughter, Susan, worked as my assistant when I was the publisher of a magazine 40 years ago.

Just before she got married, Susie told me she worried that her fiancé's parents had bought a couple of shares of Berkshire stock – and what if it tanked?

At the time, the price of the A-listed shares was about $1,000 apiece. Today, it's $771,315 a share. I hope the in-laws hung on.

In his latest annual report, Warren Buffett calculates that the average yearly gain in market value from his acquisition of Berkshire in 1965 through the end of 2024 was 19.9%, compared with 10.4% for the S&P 500 – an astounding difference, matched by no one of whom I'm aware. And Berkshire beat the market in two-thirds of the years.

First, let’s understand Berkshire Hathaway Inc.

Buffett writes that in 1965, it was a "one-trick pony, the owner of a venerable – but doomed – New England textile operation." Buffett switched to insurance and bought National Indemnity, a company he still owns.

Today, Berkshire has three major kinds of investments: cash (a war chest of $334 billion as of December 31, 2024); companies that Berkshire operates and typically owns in full, ranging from GEICO to BNSF Railway to See's Candies; and publicly traded stocks that you can buy yourself.

At last count, Berkshire owned shares of nearly 40 different public companies, but a few dominate, with just five stocks accounting for 70% of the value of Buffett's stock holdings: Apple (AAPL), American Express (AXP), Bank of America (BAC), Coca-Cola (KO) and Chevron (CVX).

Buffett doesn't worry about concentration. He likes to quote the actress Mae West: "Too much of a good thing can be wonderful!"

But the overall portfolio (operating companies plus stocks) is certainly diversified by sector. He owns tech, banks, energy companies, consumer-goods firms, health care, automakers, retailers, media, railroads, charter jets, furniture, homebuilders, insurance and more.

Think like a partner

Buffett's goal, as he wrote in the Chairman's Letter of Berkshire's 2022 annual report, "is to make meaningful investments in businesses with both long-lasting favorable economic characteristics and trustworthy managers." The italics are his – and they’re essential.

Buffett thinks of investing not as buying a symbol with a number attached but as becoming a silent partner in a business.

"Charlie and I are not stock-pickers; we are business-pickers." (Charlie Munger, Buffett's longtime partner, passed away on November 28, 2023; Buffett, the youngster, turned 94 in August 2024.)

The great advantage of owning publicly traded businesses, he writes, is that you can buy pieces of them – from time to time – "at wonderful prices."

Buffett’s mentor, the Columbia University scholar Benjamin Graham, used a metaphor in his 1949 book, The Intelligent Investor, to explain why.

Imagine a character called Mr. Market who is manic-depressive. Some days, he buys stocks in a mood of euphoria, pushing their prices to absurd heights; other days, he is depressed or panicked and sells at absurd depths.

In the latter instances, Mr. Market presents opportunities for you to buy, especially businesses that throw off cash.

In his 2022 annual report, Buffett uses Coca-Cola as an example. Between 1987 and 1994, he bought $1.3 billion worth of shares and never bought any more. In 1994, Coke’s dividend came to $75 million for Berkshire. In 2022, the payout from those shares was $704 million.

"Growth occurred every year, just as certain as birthdays. All Charlie and I were required to do was cash Coke's dividend checks." The value of Buffett's Coke shares grew to $28.7 billion as of September 2024, a 22-fold increase.

Buffett writes that the "lesson for investors" is this: “The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders."

"Over time" is the operative phrase. Buffett’s preferred holding period is forever. He does sell, but not often. In 2022, for example, he unloaded 50 million shares of U.S. Bancorp and made minor reductions in a few other holdings, including General Motors (GM) and Chinese electric vehicle manufacturer BYD (BYD).

When a firm’s prospects change, move your money. As Munger says, "Don't bail away in a sinking boat if you can swim to one that is seaworthy."

The wisdom of patience 

Buffett follows the wisdom of Graham: "Day to day, the stock market is a voting machine; in the long term, it's a weighing machine." Translation: In the short term, stock prices might reflect little more than a popularity contest, but eventually, fundamental value will be revealed.

I frequently hear from readers who say that I tell them to invest for the long term, but they are already 70 years old, for goodness' sake!

If you believe your own time horizon is too short for the long term, you might remember that Buffett is patient in his 90s. Or pass the wisdom of patience on to the ones who really need it: your children and grandchildren.

"Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage," said Munger. To the delight of their shareholders, Munger and Buffett have concentrated on – and we can expect their handpicked successors to do the same.

We shall soon see beginning in 2026 when Greg Abel officially takes the reins as CEO of Berkshire Hathaway. Buffett announced in May that he is stepping down from the position at the end of 2025, but will remain on as chair.

For your own portfolio, you can pick and choose among Berkshire's stock holdings, which are widely tracked by the financial press, including Kiplinger.

Or you can buy Berkshire's own stock. The Class A shares, which have never split, may cost $771,315 each, but the B shares, which were launched in 1996, were recently $514. Berkshire is now the seventh-largest U.S. company by market capitalization (shares outstanding times price).

No longer increasing at twice the rate of the S&P 500 Index, Berkshire over the past 10 years has generated an average annual return of 13.5% vs 12.5% for the S&P 500. Is Buffett losing his touch?

Has Berkshire become so big that its days of beating the market are over? Perhaps, but I'm betting on Buffett, the spirit of Munger and their ability to identify successors who will continue to execute their vision. The stock might even be a bargain.

James K. Glassman chairs Glassman Advisory, a public-affairs consulting firm. He does not write about his clients. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. You can contact him at JKGlassman@gmail.com.

Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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I spend more time than is reasonable or probably healthy thinking about Warren Buffett. 

This is certainly not because I believe that by studying his ways I can emulate his success. I know for a fact that I can't. That's why I don't buy stocks. I dollar-cost average into cheap index funds and never, ever sell. 

Rather, it's more that the chairman and CEO of Berkshire Hathaway (BRK.B) is just kind of endlessly fascinating in the way that all great outliers are. If I were a basketball writer instead of a financial writer, maybe I would obsess over Michael Jordan or LeBron James the same way.

If there's a difference between Buffett and Jordan or James, well, I'd like to believe that when you study the stats, the records, the performance of the former, you're gathering more than mere trivia. There are lessons to be learned, I think? 

And so, without further ado, I'd like to share some random facts and thoughts about Warren Buffett and Berkshire Hathaway. Some of what follows is very much for beginners, but I hope that even the most knowledgeable Buffettologists might glean something new.

Warren Buffett's incomparable returns

Berkshire Hathaway was a down-and-out New England textile manufacturer when Buffett gained majority control of the company in 1964. It was a somewhat hot-headed move – one that he could have easily come to regret. But Buffett wisely turned Berkshire into a holding company, or a company that owns other companies. Critically, Buffett focused on acquiring insurance companies. 

There's more to running an insurance company than managing risks and maintaining reserves, but when handled correctly, they are amazing cash machines. Policyholders send in their premium checks every month, and those, in turn, can be turned into a river of free cash flow. 

That cash can then be used to buy stocks in other companies or to acquire them outright. Berkshire Hathaway currently owns more than 60 subsidiary companies, while Berkshire Hathaway's portfolio holds more than 50 stocks and ETFs.

This is the basic Buffett playbook, and it's created stupendous returns for shareholders.

Between 1965 and 2022, shares in Berkshire Hathaway generated an annualized return of 19.8%. The S&P 500, by comparison, delivered an annualized total return (price change plus dividends) of 9.9%.

Even without paying dividends, Berkshire Hathaway stock doubled the performance of the broader market under Buffett's stewardship. That's an incomparable feat of investing acumen.

What do these returns look like on an account statement? Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, notes that if you had invested $10,000 in Berkshire Hathaway in 1968 and left it untouched for 50 years, your nut would have grown to $85 million. (To be fair, adjusted for inflation, 10 grand in 1968 is the equivalent of about $90,000 today.)

Plenty of stocks have outperformed Berkshire Hathaway over the past couple of decades – there's a reason why almost half of Berkshire's equity portfolio is sunk into Apple (AAPL) stock – but there's no denying Buffett has clobbered most of the competition most of the time.

Between 1990 and 2020, Berkshire Hathaway stock created $504.1 billion in wealth for shareholders, generating an annualized return of 11.7% along the way. Such performance made Berkshire Hathaway one of the 30 best stocks in the world over those three decades. 

Warren Buffett adores dividends

I mentioned dividends above, which are great for juicing a stock's total return over long periods of time. And yet Berkshire Hathaway famously hasn't paid a dividend itself since 1967. Why? Because when you invest with Warren Buffett, you're betting on his skills as an allocator of capital. You're in effect trusting him to generate a superior rate of return to whatever the yield on Berkshire's dividend would happen to be. 

The indicated yield on the S&P 500 currently stands at 1.6%. Let's say BRK.B sported a dividend yield more than twice that level, or more than 3%. Buffett's track record of nearly 20% annualized returns since 1965 suggests that he's better at investing your cash than you are. Why would you want him to return some of it to you in the form of dividends? So you can experience the joys of opportunity cost?

That said, Buffett absolutely loves collecting dependable dividends on behalf of Berkshire Hathaway. He often mentions the company's haul from its blue chip dividend stocks in his annual letters to shareholders. There's no question the loot is worth hyping. Consider this: in 2022, Buffett's five top holdings collectively paid Berkshire Hathaway about $3.6 billion in cash dividends: 

• Apple: $815 million
• Bank of America: $869 million
• Chevron: $922 million
• Coca-Cola: $704 million
• American Express: $302 million

Dividends and distributions from all of Berkshire's investments and subsidiaries topped $15 billion last year. To give that some context, revenue from Berkshire's non-insurance operations totalled $52 billion in 2022. In other words, the company cashed checks equivalent to 28% of all the revenue it generated from its energy businesses, railway operations and other services activities combined.

Warren Buffett doesn't do diversification

For most of us, diversification is an investor's best friend. That's because most stocks fail to beat the market. Indeed, all of the market's returns since 1926 were driven solely by the top-performing 4% of stocks. Almost no one can reliably find these needles in the haystack. That's why Jack Bogle, the Vanguard founder and pioneer of index investing, evangelized the concept of diversification. To paraphrase Bogle, investors should just buy the haystack.

The problem with buying the haystack is that an S&P 500 ETF will slightly underperform the benchmark index because of fees. While indexing is clearly the best way to go for most retail investors, it would never do for Warren Buffett. He's said more than once that diversification is for people who don't know what they're doing. And given that most professional fund managers can't beat their benchmarks, he's right. 

Don't try this at home, but Warren Buffett has always maintained a highly concentrated portfolio at Berkshire Hathaway. True, the company counts more than 50 stocks and ETFs as holdings. Note, however, that many of these are picks made by co-portfolio managers Ted Weschler and Todd Combs. Most importantly, almost all of them account for teeny tiny parts of the portfolio.

Here's the breakdown: Apple alone accounted for more than 46% of the total value of Berkshire's stock portfolio as of the end of the first quarter. Berkshire's top five holdings comprised 78% of the total, while the top 10 holdings made up more than 90%.

Although Berkshire owns scores upon scores of equities, very few are individually material to performance. And that's just how Buffett likes it. 

"Over time, it takes just a few winners to work wonders," Buffett said in Berkshire Hathaway's 2022 annual report. "And, yes, it helps to start early and live into your 90s as well."

Warren Buffet's secret is compounding

That last quotation brings us to the most important point of all: compound interest.

Ask Warren Buffett and his partner Charlie Munger about the secret to their success and they'll say that it's all about avoiding big mistakes.

"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent," Munger has said. 

That's absolutely true. Avoiding costly mistakes has been critical. But the real driver of Buffett's success has been the miracle of compounding.

There's a sort of talismanic number in compounding: 7.18%. (It's actually closer to 7.1773463%, but let's not nerd out too much here.) If you can achieve an annualized return – also known as a compound annual growth rate – of 7.18%, your initial investment will double every 10 years.

Berkshire Hathway has done far better than 7.18%, and you can see the effects on Buffett's net worth. Even after contributing billions to charity, Buffett's net worth has compounded along with his Berkshire holdings. 

Here's what compounding looks like in action: in 1992, Buffett's net worth was estimated at about $5 billion. In 2022, his fortune had grown to about $100 billion. Put another way, 95% of Buffett's lifetime wealth accumulation occurred in the three decades after he turned 62. 

Or look at it this way: a decade ago, Buffett's net worth was estimated at about $59 billion. Today, he's worth something like $112 billion. His fortune grew by about 90% in just the past 10 years – or after he turned 82. 

Happily for us non-billionaires, the S&P 500 has generated an inflation-adjusted annualized return of at least 7.1% over the past 30, 20, 15 and 10 years. The market has basically been doubling our money or better for decades.

No, past performance doesn't guarantee future results, but history and compounding are as much on our side as they were on Warren Buffett's.

If nothing else, the Oracle of Omaha is living proof of a hackneyed finance joke about compounding:

Question: How do you make a great fortune on Wall Street?

Answer: Start with a small one. 

More columns by Dan Burrows

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• After the Best Start in 26 Years, What Comes Next for Stocks?
• Investing in Gold Is Dumb
• What's So Scary About a Mega-Cap Tech Bull Market?
• We Are Not in a Bull Market
• Why I Don't Buy Stocks

Berkshire Hathaway (BRK.B) stock continued its recent remarkable run Monday, helped by better-than-expected quarterly results, Wall Street lifting its price target on shares, and another successful performance by Chairman and CEO Warren Buffett (and partner Charlie Munger) at the holding company's annual meeting over the weekend.

Berkshire Hathaway stock gapped up as much as 2% soon after the opening bell, adding to a run of outperformance that began shortly after the crisis in regional bank stocks shook the broader market. 

With a market capitalization of more than $715 billion, even just a single percentage point move in the BRK.B share price equates to more than $7 billion in shareholder value. More impressively, Berkshire Hathaway stock has added nearly 12% since hitting a year-to-date low on March 17 – a period in which the S&P 500 gained 5.5%.

Berkshire Hathaway, of course, has been a market beater for decades. Indeed, it's one of the best stocks of the past 30 years. Perhaps less appreciated is how well Warren Buffett's conglomerate has done by shareholders since the early days of the pandemic. As you can see in the chart below, over the past three years, Berkshire Hathaway stock is up 89%, good for an annualized return of 22.5%. 

By comparison, the S&P 500 generated a total return (price change plus dividends) of 50%, or 14.8% annualized. (Warren Buffett loves dividend stocks, but Berkshire Hathaway famously doesn't pay one itself.)

And after the latest Berkshire Hathaway annual meeting, BRK.B investors have to feel pretty good about Buffett & Co. maintaining the stock's market beating ways going forward.

Berkshire Hathaway stock outlook

"We viewed Berkshire's 2023 annual meeting as the best in several years with quality questions and insightful answers," writes UBS Global Research analyst Brian Meredith, who rates the stock at Buy.

The analyst praised Buffett's commitment to making investments in upgrading technology, data and analytics at Berkshire Hathaways' Geico insurance business, and liked what he heard about improving margins at subsidiary BNSF railway.

More importantly, Warren Buffett made clear that Berkshire Hathaway will not acquire Occidental Petroleum (OXY). Buffett guzzled up shares in the oil and gas company in 2022, and received regulatory approval to purchase up to 50% of OXY's shares outstanding. That fueled speculation that Berkshire would look to acquire the entire operation – which always seemed somewhat farfetched.

With an enterprise value (or theoretical takeout price) of more than $82 billion – plus a deal premium – OXY would have more than doubled the size of Berkshire Hathaway's largest ever acquisition. To date, the $44 billion in cash and debt-assumption Buffett paid for railroad operator BNSF in 2009 stands as the company record. 

As for BRK.B stock, UBS lifted its target price to $377 from $371. That's modest, to be sure, but since only four analysts cover the stock, per S&P Global Market Intelligence, it did move the consensus needle. With an average price target of $361.33, analysts give Berkshire Hathaway stock implied upside of more than 10% in the next year or so.

One analyst rates shares at Strong Buy, one says Buy and two have them at Hold. That works out to a consensus recommendation of Buy, with mixed conviction. 

Market volatility, inflation and the pandemic have all amplified the need for investors to mitigate portfolio risks. Amid these factors, it’s vital to evaluate whether a disproportionately large portion of your portfolio is invested in any single stock — also known as a concentrated stock position.

While this investing approach isn’t always a negative, it can leave investors open to significant risk and potentially significant losses. Here are some key questions to ask your financial adviser when it comes to concentrated stock positions:

What are the general pros and cons of concentrated stock positions?

While highly concentrated stock positions have created significant wealth for many investors, including some of the world’s wealthiest people (think Elon Musk, Jeff Bezos, Bill Gates, Warren Buffett and Larry Ellison), they can also produce the opposite effect.

It’s natural to be fascinated by the possibility that meteoric growth in a single holding could drastically increase your net worth, but also important to remember that concentrated positions can dramatically decrease your wealth. This is why diversification and “de-risking” techniques are critical components of most investing strategies.

Are there any legal restrictions related to the sale of concentrated stock ownership?

The SEC has rules to regulate stock sales by corporate insiders — generally officers and directors, as well as employees who have earned the stock as part of their compensation package. Typically, the “insider” can still sell some or all of the concentrated positions but needs to be aware of the applicable rules and transaction windows.

For example, 10b5-1 plans allow directors and officers to sell company stock during predetermined “open windows” that normally occur outside quarterly earnings announcements or the dissemination of other new information to the public that could cause the underlying stock price to change significantly.

What reasons might investors have to maintain concentrated stock positions?

Whether investors understand the risks of concentrated positions or not, there is often a strong tendency to hold on to them. This could be caused by fear of missing out on potential future gains, emotional attachment to the investment, overconfidence in the stock’s outlook, corporate pressure or even tax implications.

Another potential motivator is recency bias, where recent outperformance leads an investor to believe such results will indefinitely continue.

What steps can investors take to reduce the risk caused by concentrated positions?

There are many techniques investors who would like to stay somewhat invested in the stock can participate in, depending on their unique circumstances and goals.

• The most common technique is to reduce or eliminate exposure to the same sector in other facets of the portfolio.
• One of the most straightforward of these strategies is structured sales that span across multiple tax years. With this, investors can sell a fixed-dollar amount or percentage of the position over multiple tax years, allowing them to achieve concentrated risk reduction and spread out tax implications over many years.
• Tax-loss-harvesting equity strategies are also another popular risk-reduction tactic, as they provide investors with direct ownership of individual stocks in an indexlike solution and use a harvesting technique designed to reduce taxes and improve after-tax returns (aka tax alpha).
• Charitable gifting is another, less obvious strategy that investors can use to de-risk, as there’s the flexibility to contribute shares of appreciated stock directly to a charity, with the potential to deduct charitable contributions.
• To potentially see some instant diversification, investors might consider exchange funds, which allow qualified purchasers to exchange shares of their concentrated stock for an interest in a diversified fund that will hold shares of other companies.
• For those who do not want to sell their shares and instead are in a situation where they would like to hedge their position, option strategies could be a highly customizable choice to achieve virtually any hedge an investor desires.

Throughout my career, I’ve found that effective risk minimization can be achieved through a customized combination of the strategies listed above, but again it depends on the client’s circumstances and financial objectives. While it’s possible for a concentrated position to greatly enhance an investor’s net worth, de-risking the position can actually be more critical to long-term investing success.

Apollon Wealth Management, LLC (“Apollon Wealth”) provides advice and makes recommendations based on the specific needs and circumstances of each client. For clients with managed accounts, Apollon Wealth has discretionary authority over investment decisions. Investing involves risk and clients should carefully consider their own investment objectives and never rely on any single chart, graph, or marketing price to make decisions. The information contained herein is intended for information purposes only, is not a recommendation to buy or sell any security and should not be considered investment advice. Please contact your financial advisor with questions about your specific needs and circumstances.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Sell calls are pretty rare on Wall Street, so when analysts collectively give any name a thumbs down it's probably wise to toss it in the stocks to sell – or at least avoid – pile.

Fortunately, as noted, such stocks are indeed unusual. To get a sense of just how reluctant industry analysts are to issue Sell recommendations, simply take a look at the S&P 500. Only five components of the benchmark index rate a consensus recommendation of Sell, per S&P Global Market Intelligence. 

Interestingly, four of these names happen to be members of the S&P 500 Dividend Aristocrats, an index of companies that have increased their dividends annually for at least 25 consecutive years. The Aristocrats are generally considered to be the best dividend stocks for dividend growth, and long-term investors shouldn't dump them automatically just because analysts are negative on them at current levels.

Remember: When an analyst rates a stock at Sell, all that implies is that the equity in question is forecast to underperform the broader market by some margin over the next 12 months or so. Income investors with extended holding periods – we're talking anywhere from five years to decades – needn't worry about such shorter term concerns. The magic of compounding will still redound to truly patient dividend-growth investors. 

Here's how we found the five stocks to sell or avoid now. Using data from S&P Global Market Intelligence, we screened the S&P 500 for the stocks with the highest-conviction consensus Sell recommendations by industry analysts.

A note on how the ratings system works: S&P surveys analysts' stock calls and scores them on a five-point scale, where 1.0 equals a Strong Buy and 5.0 is a Strong Sell. Any score higher than 3.5 means that analysts, on average, rate the stock at Sell. The closer a score gets to 5.0, the stronger the consensus Sell recommendation.

After running the screen we were left with the five following names. Although they come from sectors as diverse as consumer staples, financials and utilities, they all have one thing in common: The Street expects them to underperform the broader market over the next year or so.

Market data and analysts' recommendations are as of March 8, courtesy of S&P Global Market Intelligence. Stocks are listed by strength of conviction of analysts' Sell calls, from weakest to strongest.

• Market value: $18.7 billion
• Analysts' consensus recommendation: 3.52 (Sell)

Clorox (CLX) stock is off to a strong start in 2023 – up 8.7% vs. 4.3% for the S&P 500 – but analysts don't expect the outperformance to last. That's because the consumer staples stalwart is dealing with both a post-COVID-19 hangover and higher input costs.

"The company had benefited from increased sales during the pandemic as demand for cleansing products spiked," writes Argus Research analyst Taylor Conrad, who rates CLX at Hold. "As benefits from the pandemic have subsided, inflation has put sales and margins under pressure. The company's revenue has fallen from peak pandemic levels, with sequential declines in five of the past eight quarters."

Of the 21 analysts covering this blue chip dividend stock tracked by S&P Global Market Intelligence, one calls it a Strong Buy, one says Buy, nine have it at Hold, six rate it at Sell and four call it a Strong Sell. Their average target price of $141.40 gives Clorox stock implied downside of about 6.5% over the next 12 months or so. 

• Market value: $32.6 billion
• Analysts' consensus recommendation: 3.56 (Sell)

Founded in 1823, Consolidated Edison (ED) provides electric, gas or steam services to roughly 3.6 million customers in New York City and Westchester County. ConEd also happens to be one of North America's largest solar power providers.

ED stock tends to lag the broader market over pretty much any time frame you care to chart, but it never really underperforms to a disastrous degree, either. Wall Street has never expected much in the way of outperformance, anyway. Indeed, ED has carried a consensus recommendation of Hold or Sell for more than 20 years. 

No, ED won't wow investors with its price potential, but few names are more reliable at raising their dividends. This Dividend Aristocrat has hiked its disbursement annually for 49 years. 

Ten analysts rate the stock at Hold, three say Sell and three call it a Strong Sell. Their average price target of $88.50 gives ED implied downside of about 4% in the next year.

• Market value: $17.3 billion
• Analysts' consensus recommendation: 3.59 (Sell)

Global macroeconomics aren't being very kind to transportation and logistics services companies these days, and Expeditors International of Washington (EXPD) has been no exception.

"We expect the current environment of weak demand and significantly lower airfreight and ocean rates to persist in 2023," writes UBS analyst Thomas Wadewitz, who rates EXPD at Sell.

Wadewitz has plenty of company on the Street. Of the 17 analysts covering EXPD tracked by S&P Global Market Intelligence, 11 call it a Hold, two say Sell and four rate it at Strong Sell. That works out to a consensus recommendation of Sell, albeit with moderate conviction. Meanwhile, the Street's average price target of $99.87 gives EXPD stock implied downside of about 11% in the next 12 months or so.

Income investors can at least count on EXPD's regular dividend increases. The company, which pays a semiannual dividend, has hiked the payout annually for almost three decades.

• Market value: $14.2 billion
• Analysts' consensus recommendation: 3.69 (Sell)

Franklin Resources (BEN), along with its subsidiaries, is best known as Franklin Templeton investments. The global investment firm with $1.5 trillion in assets under management is among the largest in the world.

BEN stock was beating the S&P 500 by about 4 percentage points for the year-to-date through March 8, but the Street doesn't expect the lead to last. Mutual fund providers are under pressure as customers eschew traditional stock pickers in favor of indexed investments. That trend in outflows has much of the Street worried about BEN's prospects. 

On the other hand, this Dividend Aristocrat's reliable and generous dividend history should not be overlooked, analysts note.

"While ongoing net asset outflows temper our view, we think the shares are worth holding amid an expected tailwind from an equity market rally and the potential for further industry consolidation," writes CFRA Research analyst Cathy Seifert (Hold).

Seven analysts rate BEN at Hold, while three call it a Sell and three rate it at Strong Sell. Their average price target of $26.92 gives shares implied downside of about 5% in the next year or so.

• Market value: $19.6 billion
• Analysts' consensus recommendation: 3.71 (Sell)

No stock in the S&P 500 gets a lower consensus recommendation from Wall Street than Principal Financial Group (PFG). 

Of the 14 analysts covering the investment and retirement management firm, one calls it a Strong Buy, five rate it at Hold, four say Sell and four call it a Strong Sell. Although their average target price of $83.08 does give shares implied upside of about 3% in the next 12 months or so, analysts expect PFG's total return to lag that of the broader market.

If PFG is expected to disappoint this year, that's partly due to the fact that it has so overwhelmingly outperformed in the recent past. Shares returned almost 33% over the past 52 weeks vs. a decline of 2.7% for the S&P 500. The trailing three-year annualized return likewise clobbered the broader market, with PFG up 30% vs. 12.1% for the S&P 500. 

PFG faces fundamental hurdles as well, such as lower performance fees and higher expenses, notes Credit Suisse analyst Andrew Kligerman, who rates shares at Underweight (the equivalent of Sell). 

Stocks closed sharply lower Thursday after the latest inflation data came in hotter than expected and two Federal Reserve officials advocated for more aggressive rate hikes. Also in focus was a fresh round of corporate earnings reports. While several companies reported well-received results, one Warren Buffett stock tumbled after a fourth-quarter miss. 

Starting with that inflation data. The Labor Department said its producer price index (PPI), which measures how much suppliers are charging businesses for goods, rose 0.7% month-over-month in January. This was the biggest increase since June, and higher than the 0.4% rise economists were expecting. On an annual basis, PPI was up 6%. Core PPI, which excludes volatile energy and food prices, was 0.6% higher from December to January and up 4.5% year-over-year.  

This morning's PPI data follows Tuesday's concerning consumer price index (CPI) reading, which heightened concerns the Federal Reserve could raise interest rates more than expected and keep them higher for longer. 

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"Both inflation readings this week point to the stickiness of inflation and that the fight isn't over, especially when considering today's PPI reading was the highest month-over-month increase since early summer," says Mike Loewengart, head of model portfolio construction at Morgan Stanley. "And if you add in that jobless claims declined suggesting the labor market remains tight, it shouldn't be a surprise to see the market take a breather as hopes of a dovish Fed in the coming months fade. Bottom line is investors should recognize inflation may not return to normal levels as quick as many hope, and with that may come more volatility."

As for those earnings reports, Roku (ROKU) stock jumped 11.2% after the streaming company reported a slimmer-than-expected fourth-quarter loss of $1.70 per share on higher-than-anticipated revenue of $867 million. The company also said active subscribers and streaming hours were up compared to Q3. 

Cisco Systems (CSCO) was another post-earnings winner, adding 5.2% to make it the best Dow Jones stock today. The network equipment maker reported fiscal second-quarter earnings of 85 cents per share on $13.6 billion in revenue, more than analysts were expecting. CSCO also raised its full-year outlook, with CEO Chuck Robbins saying "our fiscal 2023 is shaping up to be a great year."

While ROKU and CSCO finished on the positive side of the ledger, the same can't be said for many other names on Wall Street Thursday – including Warren Buffett stock Paramount Global (PARA). PARA shares slid 4.2% after the media giant reported lower-than-expected fourth-quarter earnings and revenue. 

PARA is a member of the Berkshire Hathaway equity portfolio. Regulatory filings released earlier this week revealed which stocks Warren Buffett is buying and selling, and PARA was among the holdings Berkshire added to in Q4. On the flip side, Taiwan Semiconductor Manufacturing (TSM, -2.1%) continued to decline following the bombshell revelation that Buffett drastically reduced his stake in the chipmaker after initiating the position in Q3. 

As for the major indexes, the Nasdaq Composite finished down 1.8% at 11,855, the S&P 500 was 1.4% lower at 4,090, and the Dow Jones Industrial Average was off 1.3% at 33,696. The benchmarks closed at their session lows after St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester backed more aggressive action from the central bank to bring down inflation.

Stay defensive with portfolio picks

Following two hot inflation readings, all eyes are on next Friday's release of the personal consumption and expenditures index (PCE), the Fed's preferred measure of inflation that tracks consumer spending. 

Pooja Sriram, U.S. economist at Barclays Investment Bank, expects headline PCE to be up 0.52% on a monthly basis – much higher than the 0.05% month-over-month increase seen in December. "We expect some of this acceleration in price pressures to come from the positive contributions of food and energy, similar to what was seen in the January CPI report," the economist says. Another elevated inflation reading could spark more volatility in the markets amid worries over additional hikes. 

Investors seeking out stock picks or strategies to minimize the impact of inflation and higher interest rates on their portfolio would be hard-pressed to find better options than the best inflation-proof stocks or the best stocks for rising interest rates. There's also the top recession-proof stocks or, for those seeking a more diversified approach, the best bear market ETFs, all of which are solid defensive investments. 

An unexpectedly strong retail sales report weighed on the major benchmarks in early trading Wednesday, though the three indexes flipped higher by the close. Investors also sifted through an onslaught of 13F filings released overnight, which included a surprisingly quick turnaround for one of Warren Buffett's portfolio picks.  

While Tuesday's inflation data showed consumer prices moderated more slowly than expected in January, today's retail sales report suggested consumer spending was strong last month. Specifically, the Commerce Department said retail sales rose a seasonally adjusted 3% from December to January. Spending at bars and restaurants was 7.2% higher – the biggest monthly increase since March 2021 – while auto sales were up 5.9%. On an annual basis, retail sales jumped 6.4%. 

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"The American consumer went on a shopping spree in January. The consumer still has money saved and will continue to spend it as long as the labor market remains robust," says Edward Moya, senior market strategist at currency data provider OANDA. "The U.S. economy is looking like it will have a solid first quarter and recession doubts are getting some vindication here. The data-dependent Fed is seeing its case for more ongoing rate increases get bolstered after both inflation accelerated and as retail sales rebound sharply in January."

Meanwhile, following yesterday's release of fourth-quarter 13F filings, many investors were focused on which stocks Warren Buffett is buying and selling. Most notably, Berkshire Hathaway (BRK.B) – Buffett's holding company – drastically reduced its stake in Taiwan Semiconductor Manufacturing (TSM) in Q4 after initiating the position in the third quarter. This sent TSM down 5.3% today, dragging several semiconductor stocks like Advanced Micro Devices (AMD, -0.9%) and Micron Technology (MU, -0.4%) down with it. 

As for the major indexes, the Nasdaq Composite closed up 0.9% at 12,070, the S&P 500 gained 0.3% to 4,147, and the Dow Jones Industrial Average added 0.1% to 34,128.  

The best tech stocks to buy

The Nasdaq's outperformance today came courtesy of a few well-received earnings reports, namely vacation rental company Airbnb (ABNB, +13.4%), video game firm Roblox (RBLX, +26.4%) and AI lending stock Upstart (UPST, +28.1%). But while today's price action extends a recent run higher from 2022's most beaten-down area of the market, uncertainty remains – especially following last week's surprisingly strong jobs report and this morning's impressive retail sales data. 

"The resiliency of the consumer is another sign that areas of the economy remain robust even amid talks of a recession," says Mike Loewengart, head of model portfolio construction at Morgan Stanley. "Expect some volatility in the near-term as investors mull over the Fed's next steps and what, if anything, could lead it to cut rates in the calendar year." 

Still, for investors looking to play the hot hand of the market, there are plenty of ideas, including those found among the best growth stocks and the best tech stocks to buy now.

Some mixed economic data and the release of the minutes from the last meeting of the Federal Reserve's rate-setting committee made for a volatile session on Wednesday. 

The major indexes overcame some early stumbles to trade higher for most of the day – but then reversed course after it became clear that the central bank has no interest in cutting interest rates anytime soon. 

Market participants had plenty of economic data to digest even before the Fed minutes landed at 2 p.m. Eastern Time. Among the most important news was a report that U.S. manufacturing activity contracted for a second month in December. The Institute for Supply Management's gauge of factory activity fell to 48.4 last month – the lowest reading since the COVID-19 month of May 2020 – from 49 in November. 

Readings below 50 indicate contraction. With ISM's December figure now in the books, 2022 represented the steepest annual drop in manufacturing activity since the Great Financial Crisis year of 2008. 

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The factory data confirm "fading global goods demand and falling production," wrote Jonathan Millar, senior U.S. economist at Barclays Investment Bank. "December's composite reflects intensifying contractions in new orders and supplier delivery times, as well as the production index dropping into contractionary territory."

Markets shrugged off the data to trade higher. But the release of the Fed meeting minutes (in which officials affirmed their hawkish stance on inflation) led to a pullback.

"The tone [of the minutes] was hawkish, but not more so than anticipated," wrote Ian Lyngen, head of U.S. Rates Strategy at BMO Capital Markets, in a note to clients. "It was encouraging to see the Fed acknowledge the risks of the market easing financial conditions while the FOMC is actively attempting to tighten further."

Happily, markets managed to rebound by the closing bell. The blue-chip Dow Jones Industrial Average added 0.4% to finish at 33,269, while the broader S&P 500 gained 0.8% to close at 3,852. The tech-heavy Nasdaq Composite rose 0.7% to finish at 10,458. 

The Best Warren Buffett Dividend Stocks

If nothing else, Wednesday's session was a reminder that volatility is very much carrying over to the new year. Against this backdrop, investors would do well to gird their portfolios with securities that can soften such swings. 

Low-volatility ETFs are a great way to add defense and diversification to your holdings, as are select low-volatility stocks. The best bear market stocks and best bear market ETFs will also help do the trick. For those looking for steady and reliable equity income, the best Dow dividend stocks and the best dividend-growth stocks will also stand one in good stead.

But why not take a cue from the greatest long-term investor of all time? Warren Buffett's Berkshire Hathaway (BRK.B) owns dozens of dividend stocks – and Warren Buffett's best dividend stocks are always worth a closer look. 

Warren Buffett's retirement as CEO of Berkshire Hathaway (BRK.B) marks the end of an era, but it's unlikely to be the end of the holding company's love of high-quality dividend stocks.

To be sure, much will change. New CEO Greg Abel is creating his own vision for Berkshire Hathaway. Meanwhile, Todd Combs, who, along with Ted Weschler, had managed perhaps 10% of Berkshire Hathaway's stock portfolio, left in December to take a job at JPMorgan Chase (JPM).

The days of investors diligently tracking every one of Berkshire's buys and sells just won't be the same.

Be that as it may, the Oracle of Omaha has said that his preferred holding period is "forever," and that's been a winning formula when it comes to Buffett's best dividend stocks.

What Buffett has to say about dividend stocks 

Berkshire famously doesn't pay a dividend of its own, even as Buffett liked to rake them in with both fists. There's no hypocrisy here. Buffett is a master of capital allocation. Investors entrust him with their capital to maximize their returns. Why would Buffett return cash to shareholders via a dividend that yields, say, 2% when he's confident he can generate a greater return on their capital elsewhere?

When he's on the other side of the deal, however, Buffett has had an abiding love for long-term and reliable dividend payers. For one thing, dividends enforce management discipline, he's said. Even better is the magic of compounding.

When a company raises its dividend regularly over an extended period of time, the yield on an investor's cost basis goes up. Hold on long enough at that puny 2% yield you started with, and it could hit double-digits or more one day.

Buffett periodically liked to highlight this fact in his annual letters to shareholders, noting that —– spoiler alert —– in 1994, Berkshire received $75 million in Coca-Cola (KO) cash dividends. Less than two decades later, that sum had ballooned to more than $700 million.

"Growth occurred every year, just as certain as birthdays," Buffett wrote. "All Charlie [Munger] and I were required to do was cash Coke's quarterly dividend checks. We expect that those checks are highly likely to grow."

They have.

How we chose the best Buffett dividend stocks

Note that Berkshire amassed its massive KO stake back in the late 1980s and early 1990s. Based on the initial cost of the investment, the dividend yield on Buffett's stake is around 60%.

With that example being top of mind, we screened Berkshire's portfolio for the best Buffett dividend stocks based on the current forward yield, commitment to dependable dividend growth over the long haul, and analysts' consensus recommendations.

Have a look at five of the best Buffett dividend stocks.

• Market value: $341.6 billion
• Dividend yield: 2.7%
• Percentage of Berkshire Hathaway portfolio: 11.6%
• Berkshire Hathaway ownership stake: 9.3%

No surprises here. Few companies have Coca-Cola's track record when it comes to returning cash to shareholders. Indeed, this member of the S&P 500 Dividend Aristocrats Index has increased its payout annually for more than six decades.

Buffett quipped that he drank Coke — and watched its stock — for more than 50 years before finally taking the plunge in 1988. Today, KO is Berkshire's third-largest holding, one that generated $816 million in dividend income in 2025.

KO stock has trailed the broader market over the past few years, but analysts say it's poised to get its momentum back. The Buy-rated Dow Jones stock remains one of Wall Street's favorite names in the consumer staples sector. Analysts surveyed by S&P Global Market Intelligence give shares a consensus recommendation of Buy, with high conviction to boot.

• Market value: $400.7 billion
• Dividend yield: 2.0%
• Percentage of Berkshire Hathaway portfolio: 9.5%
• Berkshire Hathaway ownership stake: 7.2%

Buffett first bought Bank of America (BAC) back in 2017, and he's clearly pretty fond of it. Even as Berkshire slashed or outright exited stakes in a host of financial stocks over the years, he remained committed to the nation's second biggest bank by assets.

Partly that's because BAC stock paid Berkshire about $625 million in cash dividends in 2025.

It also helps that BAC has raised its dividend annually for 13 years and counting.

True, Buffett has been trimming Berkshire's BAC stake over the past few quarters, but it is still the holding company's fourth-largest position.

The Street likes BAC over the shorter term as well. Industry analysts give shares a consensus recommendation of Buy, with very high conviction.

"We believe that the current BAC share price undervalues the franchise given ongoing improvement in return metrics and continued positive operating leverage," writes Argus Research analyst Stephen Biggar, who rates the financial stock at Buy.

• Market value: $34.8 billion
• Dividend yield: 2.5%
• Percentage of Berkshire Hathaway portfolio: 1.4%
• Berkshire Hathaway ownership stake: 8.1%

When Buffett initiated a stake in Kroger (KR) in 2019, it looked like a classic defensive dividend play. With almost 2,700 locations in 35 states, Kroger is one of the nation's largest grocery retailer.

It's a low-margin business in a defensive sector, but it sure does pay dividends. Heck, Kroger has hiked its dividend annually for 19 straight years — and at a compound annual growth rate of 13%.

As a low-beta stock, KR tends to lag the broader market when everything is going up. It also tends to hold up better when stocks are selling off. Interestingly, KR has generated competitive long-term performance vs the S&P 500 despite the secular bull market.

Looking at the next 12 to 18 months, the Street gives KR stock a consensus recommendation of Buy, albeit with somewhat mixed conviction.

Kroger is Berkshire's 12th-largest holding.

• Market value: $4.37 trillion
• Dividend yield: 0.4%
• Percentage of Berkshire Hathaway portfolio: 22%
• Berkshire Hathaway ownership stake: 1.6%

Don't let the paltry yield on Apple's (AAPL) dividend fool you. Yes, the company gets flack for its tiny yield, but that's partly a function of its soaring share price and partly due to its strict dividend policy.

Apple prefers returning cash to shareholders through stock buybacks, which are more tax-friendly. As such, it generally follows a regimen where it regularly raises its dividend by only one cent.

That sounds like a lousy deal until you realize that Apple's dividend has increased at a compound annual growth rate of more than 7% over the past decade. Buffett's No. 1 pick, which he first bought in 2016, paid Berkshire $280 million in cash dividends last year.

Meanwhile, investors counting on future increases to the payout can probably rest easy. In fiscal 2025, Apple generated $98.7 billion in free cash flow — and that was after paying out more than $15 billion in dividends.

The Street gives Apple a consensus recommendation of Buy, with mixed conviction.

• Market value: $230.5 billion
• Dividend yield: 1.1%
• Percentage of Berkshire Hathaway portfolio: 17.4%
• Berkshire Hathaway ownership stake: 22.2%

Buffett really loves American Express (AXP). He first bought the stock in the 1960s, but he didn't start building Berkshire's massive long-term holding until the 1990s.

Today, Berkshire owns more than a fifth of the financial company's shares outstanding. And at more than 20% of its U.S. equity portfolio, AXP is Berkshire's second-largest holding after Apple.

AXP's dividend yield won't impress impatient equity income investors. Those with longer horizons will appreciate the fact that AXP has increased its payout at a compound annual growth rate of more than 11% over the past decade.

Analysts are split on AXP over the shorter term, giving shares a consensus recommendation of Hold.

Speaking for the bulls, Argus Research analyst Stephen Biggar cites a competitive strength in making his Buy call on AXP.

"The company's customers, who tend to have higher incomes than those of other credit card companies as well as better credit scores, are generally more insulated from economic distress and have not shown signs of slower spending despite periods of high inflation and interest rates," the analyst writes.

Related content

• 9 Warren Buffett Quotes for Investors to Live By
• A Timeline of Warren Buffett's Life and Berkshire Hathaway
• 5 of Warren Buffett's Best Investments
• 7 of Warren Buffett's Biggest Misses

Some early Wednesday gains sparked hope that markets might just get a Santa Claus rally after all. Any optimism was quickly dashed, however, as the major market indexes turned lower in light trading after the latest housing data fanned fears of a potential recession in the new year.  

Looking at the economic data, the National Association of Realtors this morning said that pending home sales were down 4% month-over-month in November, marking their sixth straight decline. "The November level of pending homes sales plummeted close to pandemic lows as the housing market cools," says Jeffrey Roach, chief economist at LPL Financial. "As a leading indicator for the residential real estate market, low pending home sales should inform investors that we have not likely seen the bottom." 

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And it wasn't just the dismal housing data that had stocks reversing lower today. "The market appears to be exhausted, understandably, no longer expecting a large technical rally and just hoping to get to Friday afternoon without any further meaningful losses," says Louis Navellier, chairman and founder of Navellier & Associates. "Most of the year's major uncertainties: China COVID, the war in Ukraine, tight energy supplies, and hawkish central banks, will be waiting for us on the other side."

The tech-heavy Nasdaq Composite once again led the path down, shedding 1.4% to 10,213, as index heavyweights Apple (AAPL, -3.1%) and Amazon.com (AMZN, -1.5%) declined. The broader S&P 500 Index (-1.2% at 3,783) and the blue-chip Dow Jones Industrial Average (-1.1% at 32,875) also ended in the red.

Why Investors Should Be Watching Buffett

One notable advancer today was Tesla (TSLA), which rebounded 3.3% after Tuesday's brutal selloff. But while Tesla stock is on pace to end 2022 down by nearly 68%, it remains "a perennial favorite among investors," says Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, in recapping some of the biggest share price moves of the past year. 

The analyst adds that Meta Platforms (META) is another previous highflier that has dramatically lost value in 2022. "[B]ut some investors will have been buying [META stock] to capitalize on the share drop in the hope its fortunes will turn around as the company restructures."

As for those that have artfully maneuvered the extreme stock market volatility of 2022, Streeter points to Warren Buffett's Berkshire Hathaway (BRK.B). The holding company "remains a top pick for investors hoping the steady hand of the Sage of Omaha will see them through any storms ahead." Buffett and his lieutenants did a lot of bargain hunting in 2022 as the equities market plummeted. Berkshire increased exposure to energy stocks by boosting stakes in Occidental Petroleum (OXY) and Chevron (CVX), and added to its tech sector bets via a third-quarter purchase of Taiwan Semiconductor (TSM) shares. To see the other stocks Buffett & Co. feel are worth their time, check out the entire Berkshire Hathaway equity portfolio.

Intel (INTC) stock has been lagging the broader market for more than 20 years, hurt by the rise of nimble competitors, manufacturing delays and the fact that the world's largest semiconductor company missed out on some of the biggest changes in technology of the past couple of decades.

But Intel, a component of the Dow Jones Industrial Average, insists that it's set to turn all that around. The company on Monday affirmed that it remains on target to regain leadership in semiconductor manufacturing.

A multi-year effort to return to the forefront of production technology will allow the firm to reverse market-share losses to competitors such as Advanced Micro Devices (AMD) and Nvidia (NVDA), Intel says. And if that weren't bold enough, Intel even has designs on competing with Taiwan Semiconductor Manufacturing (TSM) in the market for manufacturing chips for other semiconductor companies.

TSM, incidentally, recently became one of Warren Buffett's top stock picks.

Intel is indeed the world's largest chipmaker, with commanding market shares in central processing units for personal computers (PCs) and data center servers. But its business, as we have been reminded many times over the years, is a slowly melting iceberg. PCs, after all, are in secular decline.

True, data centers are an area of growth in a future increasingly powered by artificial intelligence, but investor interest has shifted to firms that make chips for mobile devices and the Internet of Things. In these endeavors, Intel is an also-ran.

In other words, Intel's current strategy is critical to the stock's long-term success. Bulls contend that if the company is able to deliver on its aspirations, it could provide the catalyst INTC stock needs to shake off its multi-decade run of underwhelming returns.

With that as our backdrop, it's probably at least somewhat disheartening to INTC bulls that Wall Street remains very much on the sidelines on Intel stock. As illustrious and widely held as Intel stock may be, it's a "show me" story at best, analysts say.

Past performance, as we all know too well, is not indicative of future returns, but one look at Intel stock's long-term chart is reason enough to be skeptical about the firm's promises. The chipmaker has tried to reverse its fortunes many times before, and yet INTC stock's track record shows only that investors would have been better served putting their capital elsewhere.

Over the past three years, INTC stock delivered an annualized total return (price plus dividends) of -17.2%. The S&P 500, meanwhile, delivered a three-year annualized total return of 10.4%. At five years, INTC stock's annualized total return stands at -5.1% vs. 10.7% for the broader market. 

Things get better when we look back farther, but not by much. Intel stock generated positive annualized total returns over the past 10, 15 and 20 years – but still lagged the broader market by at least 5 percentage points in every one of those periods.

Little wonder, then, that not only does the Street's consensus recommendation on INTC stock stand at Hold, but it's been stuck there for a very long time.

Of the 43 analysts issuing opinions on Intel stock tracked by S&P Global Market Intelligence, seven rate it at Strong Buy, two say Buy, 24 have it at Hold, five call it a Sell and five rate it at Strong Sell. Moreover, Intel stock has held a rating no better than Hold since early 2019.

In other words, analysts as a group haven't been constructive on the name for years. Sadly for bulls, Intel's current strategy hardly has them changing their minds.

Oppenheimer analyst Rick Schafer, who rates shares at Perform (the equivalent of Hold) does a good job summing up Wall Street's lack of enthusiasm for INTC stock.

"Intel remains largely tied to PC growth, and our relatively bearish stance reflects our belief that the PC market has begun a secular decline," Schafer writes in a note to clients. "Intel has stumbled on its technology leadership, falling behind peers as they struggled to transition to 10 nanometer manufacturing."

Susquehanna Financial Group takes an even dimmer view of Intel stock's prospects. Analyst Christopher Rolland, who rates shares at Negative (the equivalent of Sell) downgraded INTC earlier this year from Neutral (Hold). He cites a slew of headwinds, including increased competition in servers and PCs – notably from Apple (AAPL) – as well as a "work-from-home hangover" that's depressing sales of Windows devices. 

Rolland further worries about longer-term pressures on Intel as it "moves to more complex, multi-packaged and smaller geometries, and as increased competition pressures pricing."

Intel stock trades at just 14.7 times analysts' 2023 earnings per share (EPS) estimate. That's cheaper than the broader market. But then the Street forecasts Intel's EPS to decline at an average annual pace of more than 11% over the next three to five years.

It's hard to make a bull case on valuation based on that sort of earnings forecast. Most analysts don't even try to. 

Warren Buffett has said that the problem with most turnarounds is that they don't turn. Berkshire Hathaway (BRK.B), of which Buffett serves as chairman and CEO, actually owned Intel a decade ago. The stake underperformed and he dumped it in fairly short order.

Something tells us Warren Buffett won't be biting on Intel stock amid the chipmaker's current turnaround efforts either.

The McDonald’s Gold Card, the McGold Card, whose owner can get McDonald’s for life, is leaping from legend to reality in the U.S. after causing a stir in the U.K.

What’s a McDonald’s Gold Card? It’s the McGold Card, a credit card-size gold card that allows you to swipe for swag in the form of free meals from the McDonald’s menu.

The magical card, versions of which have surfaced on actors and billionaires and friends of McDonald’s franchise owners (legendary McDonald’s regular Warren Buffett has one) – has been elusive to all but the elite cognoscenti. Now McDonald’s is cashing in on this mythology to give people using the McDonald’s app family a chance to win one of three McDonald’s McGold Cards during its “SZN of Sharing” (yes, that’s what they’re calling it) contest. Winners will also have the option to give three other cards to their friends or family (that’s a total of 12 cards being given away in this event). The McGold Card gives its owner free McDonald’s meals twice a week for life (or 50 years, um, whichever comes first). McDonald’s is also throwing in some cash to help offset the winners’ taxes on the prize.

"Our fans have been fascinated by the lore of the McGold Card and if it really exists,” Tariq Hassan, McDonald’s USA chief marketing and customer experience officer said in a statement. “And now, we’ll make this McDonald’s legend a reality for our fans by giving them the ultimate holiday gift – a chance to win a card and then share access to it with three of their family or friends.” 

So how do you get (a chance at) a McDonald’s Gold Card? Two ways: 

• Get the McDonald’s app and enroll in the MyMcDonald’s Rewards program. Make purchases on the app between Dec. 5 and Dec. 25. You’re automatically entered.
• Or go to McDonald’s SZN Sharing web site and enter without making a food purchase between Dec. 5 and Dec. 25. 

 As with any contest there are rules, and within those rules, the numbers. And these numbers  answer a question about just how much gluttony is promised here: It works out to a $10 McDonald’s meal, two times a week. You can’t just sit there and eat Big Macs until you burst.

McDonald’s values the cards at up to $297,140. McDonald’s says the McGold Card has an annual value of $1,040 per year for 50 years. Winners will also receive a check for $22,285 “to help offset taxes” on the prize, totalling $74,285. The cards you can give to friends? McDonald’s isn’t covering their taxes.

Stocks bolted out of the gate Tuesday after another data point showed inflation eased in October. The major markets pared some of these earlier gains in afternoon trading amid reports Russian missiles crossed into Poland, a member of NATO, but they still managed to end the day higher.

The Labor Department this morning said its producer price index (PPI), which measures what suppliers are charging businesses and other customers for goods and services, rose 8% year-over-year in October. This was slower than September's 8.4% increase. On a monthly basis, the PPI accelerated 0.2%, matching last month's number. Core PPI, which excludes volatile energy and food prices, also rose at a slower pace than what was seen in September.

"The PPI read certainly adds more fuel to the fire for those who feel we may finally be on a downward inflation trend," says Mike Loewengart, head of model portfolio construction at Morgan Stanley. "The market embraced last week's consumer downtick and today's initial reaction seems to be more of the same as expectations rise that the Fed could pull back from 75 basis point hikes next month, especially considering [Federal Reserve Board Vice Chair Lael] Brainard's comments on slowing the hikes yesterday."

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The market also responded positively to third-quarter earnings beats from retail giants Home Depot (HD, +1.6%) and Walmart (WMT, +6.5%). These results come ahead of a busy stretch of retail earnings, with Lowe's (LOW, +2.0%) and Target (TGT, +4.0%) on deck to unveil their Q3 financial results.

At the close, the Dow Jones Industrial Average was up 0.2% at 33,592, the S&P 500 Index was 0.9% higher at 3,991, and the Nasdaq Composite had gained 1.5% to 11,358.

Warren Buffett's Q3 Buys and Sells

The Nasdaq's outperformance came largely at the hands of semiconductor stocks. And the most talked about chipmaker today was Taiwan Semiconductor Manufacturing (TSM), which rallied 10.5% on news that one of Wall Street's most revered investors took a massive stake in the company. 

Specifically, Warren Buffett's Berkshire Hathaway (BRK.B) late Monday filed its latest Form 13F, a quarterly disclosure the Securities and Exchange Commission (SEC) requires of all institutional investors with $100 million or more in assets. The regulatory filing revealed that Buffett bought 60.1 million shares in the world's biggest semiconductor manufacturer, making TSM the 10th largest position in the Berkshire Hathaway equity portfolio. 

This wasn't the only move Buffett & Co. made in the third quarter, though. Here, we take a closer look at all the stocks Warren Buffett bought and sold in Q3, including the one position he completely exited. Check them out.

Warren Buffett's Berkshire Hathaway (BRK.B) initiated a position in Capital One Financial (COF) in the first quarter, reduced its stakes in nine other stocks and exited holdings in four more names, including Bank of New York Mellon (BNY) and U.S. Bancorp (USB).

In total, Berkshire Hathaway was a net seller of equities to the tune of $10.4 billion during the first three months of the year. The holding company also spent $4.4 billion buying back its own stock.

On the buy side of Berkshire's ledger, chairman and CEO Warren Buffett – or his co-portfolio managers Ted Weschler or Todd Combs – bought 9.9 million shares in COF worth $954.9 million as of March 31, according to regulatory filings. With a 0.3% weighting, however, the stock represents a tiny part of the Berkshire Hathaway portfolio.

The addition of Capital One, a bank holding company, is notable in that Buffett has mostly been getting out of bank stocks for some time. At the Berkshire Hathaway annual shareholder meeting in May, the legendary long-term investor said he first lost his appetite for bank stocks at the beginning of the pandemic, citing an overly complicated banking system, mismanagement and bad incentives.

Berkshire has dumped shares in JPMorgan Chase (JPM), Goldman Sachs (GS), Wells Fargo (WFC) and PNC Financial (PNC) over the past few years. BNY and USB have now joined the list of former Berkshire bank holdings.

"The American public doesn’t understand their banking system — and some people in Congress don’t understand it anymore than I understand it," Buffett told the Berkshire faithful earlier this month.

Buffett does maintain a major position in Bank of America (BAC). Other financial sector holdings include American Express (AXP), Jefferies Financial Group (JEF), Citigroup (C) and Visa (V), to name a few.

In another move on the buy side of the ledger, Berkshire upped its stake in Occidental Petroleum (OXY) by 17.4 million shares in Q1. As was previously disclosed, Berkshire now holds 211.7 million shares worth $13.2 billion as of quarter's end. Although Berkshire owns roughly a quarter of OXY's common stock – and has regulatory approval to purchase up to half of the oil and gas firm's shares – Buffett said at the annual meeting that Berkshire will not acquire it outright. 

Warren Buffett was much busier selling

In addition to eliminating its equity investments in Bank of New York Mellon and U.S. Bancorp, Buffett also sold off the remainder of Berkshire's stake in Taiwan Semiconductor (TSMC) in Q1. Berkshire slashed its TSMC holdings by 86% in the fourth quarter after initiating a major position just three months earlier. 

Buffett attributed his abrupt volte-face on TSMC to concerns over China's increasingly bellicose claims to the island nation. "I don't like its location, and I've reevaluated that," Buffett said.  

Berkshire also exited its stake in RH (RH), formerly known as Restoration Hardware. 

As previously disclosed, Buffett cut Berkshire's stake in Chevron (CVX) by 18%, leaving it with 132.4 million shares worth $21.6 billion as of March 31. The CVX stake now accounts for 6.7% of the Berkshire equity portfolio, or its fifth largest holding, down from 9.8% three months ago. 

In another notable move, Buffett slashed Berkshire's equity investment in General Motors (GM) by a fifth. The stake is thought to have been initiated by Weschler or Combs, but Buffett did weigh in on the auto industry at the company's annual meeting, saying "I don’t think I can tell you what the auto industry will look like five or 10 years from now."

Other reductions saw Berkshire pare stakes in McKesson (MKC), Celanese (CE), Activision Blizzard (ATVI), Jefferies Financial (JEF), Amazon.com (AMZN), Aon (AON) and Ally Financial (ALLY). 

Berkshire Hathaway has always maintained a highly concentrated portfolio. And a change in the way it reports the stock holdings of a subsidiary boosted its recorded ownership in a number of companies, even though Berkshire didn't buy more shares. 

Rising share prices in some of its largest investments also increased the concentration of Berkshire's holdings. For example, Apple (AAPL) now accounts for more than 46% of the portfolio, up from 38.9% at the end of Q4. 

All told, Berkshire Hathaway's five largest equity investments – AAPL, BAC, AXP, Coca-Cola (KO) and CVX – comprise almost 78% of the portfolio's total value. 

Much of AAPL's increased weighting in the portfolio can be attributed to the fact that Apple stock is soaring in 2023. Shares in the company, which Buffett has called Berkshire's "third business," are up by a third for the year-to-date. 

Of course, Apple is one of the best stocks of the past 30 years. A mere $1,000 invested in Apple stock 20 years ago would have generated stupefying returns too.

Stocks continued to climb Friday, boosted by hope that Thursday's inflation data, which showed a slower-than-expected rise in consumer prices last month, could have the Fed easing back on rate hikes sooner rather than later. 

The tech-heavy Nasdaq Composite jumped 1.9% to 11,323, while the broader S&P 500 Index rose 0.9% to 3,992 – building on Thursday's impressive rally. And while the Dow Jones Industrial Average spent most of the day lower on weakness in healthcare stocks UnitedHealth (UNH, -4.1%) and Merck (MRK, -3.9%), a late-day burst of buying power helped the blue-chip index eke out a modest gain (+0.1% to 33,747). It was the best week for the Nasdaq (+8.1%) since March, and for the S&P 500 (+5.9%) since June.

Despite the deceleration in inflation last month, today's economic data shows prices remain uncomfortably high for consumers. The University of Michigan's consumer sentiment index fell more than expected in November, to 54.7 from October's 59.9 – erasing about half the gains the index has seen since hitting a historic low in June. Additionally, consumers' expectations for where inflation will be at this time next year rose to 5.1% from last month's reading of 5%.

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José Torres, senior economist at Interactive Brokers, says today's consumer sentiment data points to a potentially rocky road ahead. "This month's reading reflects broad weakening across all categories and implies that consumers are feeling the pain of inflation, rising interest rates and tighter credit conditions," Torres says. "Overall, this report points to a tapped-out consumer that is likely to weaken further into next year."

What Buffett's Big Move Could Mean for USB

It was a busy week of headlines on Wall Street, but one notable news story flew under the radar of all but the most devout Buffettologists. On Thursday, a regulatory filing revealed Berkshire Hathaway (BRK.B), Warren Buffett's holding company, slashed its stake in U.S. Bancorp (USB). 

Specifically, Berkshire sold 56% of its position in USB, bringing its stake in the big bank to 3.5% from 8.1%. The move shouldn't come as a major surprise given the stock's longer-term performance troubles. Besides, Buffett has been reducing exposure to financial stocks in the Berkshire Hathaway equity portfolio for some time – including selling smaller portions of his U.S. Bancorp stake in recent quarters. 

But what could this mean going forward? Read on as we take a closer look at Buffett's big move, and the impact this could have on USB stock.

Warren Buffett's Berkshire Hathaway (BRK.B, $303.20) cut its stake in longtime holding U.S. Bancorp (USB, $44.87) by more than half.

Buffett, who serves as Berkshire Hathaway's chairman and CEO, has been slashing his holding company's exposure to financial stocks – and bank stocks in particular – for years. And although the U.S. Bancorp position hasn't been immune to some recent downsizing in the Berkshire Hathaway equity portfolio, Buffett has left it mostly intact.

That is, until now. 

Berkshire Hathaway sold 56% of its position in the nation's fifth largest bank by assets, a new regulatory filing revealed. Buffett's conglomerate now holds 52.5 million USB shares, or 3.5% of the regional lender's shares outstanding. That's down from an ownership stake of 8.1% prior to the sales. 

Berkshire Hathaway's USB stock was worth $2.4 billion as of Thursday's close, and now accounts for just 0.7% of the Berkshire Hathaway equity portfolio. That's down from 1.8% before Buffett slashed the stake. 

Berkshire, formerly the bank's largest shareholder, now drops to fourth place behind asset management giants Vanguard, BlackRock and State Street Global Advisors.

Buffett First Bought USB in 2006

Not to get sentimental or anything, but U.S. Bancorp is one of the oldest holdings in the Berkshire Hathaway portfolio. Warren Buffett first bought shares in the nation's largest regional lender in the first quarter of 2006. And while he has always been tight-lipped about the USB position, Buffett's actions over the past few quarters have hinted that something like this might be in the offing.

After all, Buffett clipped Berkshire Hathaway's USB stake by 5%, or 6.6 million shares, in the second quarter of 2022. He also pared the stake in each of the first three quarters of 2021.

True, Buffett had been gradually reducing Berkshire Hathaway's exposure to USB. But those scissorings stood in stark contrast to what he's done with so many of Berkshire's other bank stocks.

Mostly, he's taken a hatchet to them.

In just a sample of moves, Berkshire Hathaway dumped what was left of its stake in Wells Fargo (WFC) in the first quarter of 2022, and exited positions in JPMorgan Chase (JPM), Goldman Sachs (GS), PNC Financial Services (PNC) and Travelers (TRV) over the past couple of years. 

To be sure, Warren Buffett is by no means done with big bank stocks. Bank of America (BAC) is Berkshire Hathaway's second largest holding after Apple (AAPL). The nation's second largest bank by assets accounts for 10.2% of Berkshire's total portfolio value. 

Berkshire Hathaway also owns 55.2 million shares in Citigroup (C), a position that Warren Buffett initiated in the first quarter of 2022. At 0.8% of the portfolio, Citigroup is one of Berkshire Hathaway's 15 largest investments. 

Other financial sector stocks in the Berkshire Hathaway equity portfolio include American Express (AXP), Bank of New York Mellon (BK), Mastercard (MA), Visa (V) and Ally Financial (ALLY), among others.

What This All Means

The bottom line is that U.S. Bancorp stock is a long-time market laggard, and so perhaps we shouldn't be too surprised that Warren Buffett decided it was time to dramatically lighten up on the position. We'll learn more of what the world's greatest long-term investor has been up to when Berkshire Hathaway reports its third-quarter buys and sells on Monday, Nov. 14.

For now, all we can say for certain is that Berkshire Hathaway stock has been a market-beating buy this year. Operating earnings expanded 20% in the third quarter, helping to bolster BRK.B's case as one of the best stocks to buy for a bear market. 

It's also fair to assume that this isn't good news for USB stock. If Warren Buffett's recent history with big banks stocks offers any sort of guide, Berkshire Hathaway might be putting even more USB shares on the market soon.

In the 12 months ending June 30, companies in the S&P 500 index spent a record $1 trillion to buy back their own shares, according to S&P Dow Jones Indices. But come January, a new 1% tax on buybacks might dampen corporate America’s appetite. S&P Dow Jones estimates the tax would reduce corporate profits by half a percentage point at current buyback rates. 

Buybacks have lately become controversial, with critics arguing that there are better uses for corporate cash. But a 2020 S&P Dow Jones Indices analysis of the 100 companies with the biggest buybacks found that their long-term stock returns generally outpaced the S&P 500. 

Many smart investors, including Warren Buffett, are big supporters of strategic buybacks. “If a management wishes to further intensify our ownership by repurchasing shares, we applaud,” he has said. 

The new tax is low enough that it will discourage only the most marginal buybacks, say experts, so don’t expect them to disappear. But buybacks can be complex to evaluate. For investors trying to navigate this changing market, a few signals can help you find stocks likely to benefit from share repurchases despite the tax. But first, the basics.

The pros. Buybacks make a lot of sense when a company can sweep up shares whose prices have been irrationally driven below true value by market swings. Such purchases signal insiders’ faith in the company and add demand that supports the stock’s price.

Many investors prefer buybacks over dividends because although you must pay taxes on dividends when they are issued, you don’t pay capital gains taxes until you sell your shares. In addition, when companies buy back more shares than they issue, each remaining share represents a bigger ownership slice of the company

Some investors want companies to distribute cash through buybacks so managers aren’t tempted to make worse choices, says Meb Faber, chief investment officer of Cambria Investment Management. “How many companies have wasted money on naming stadiums?”  

Executives like buybacks because by reducing the number of shares outstanding, a company can report higher per-share earnings even when overall profits are flat or down. That can be an especially enticing strategy for any executive whose compensation is tied to rising earnings per share.

Buybacks also give managers flexibility. A company that raises its dividend risks a stock meltdown if troubles later force it to cut the payout. A buyback program, however, can usually be suspended without alarming investors. Another advantage: Every share brought home means one less dividend payment for those companies that also pay dividends, reducing future cash obligations. 

Finally, economists like buybacks because they take cash from companies that lack good internal investment ideas and return it to shareholders—who then typically reinvest it in other publicly traded companies (which, presumably, have more-productive investment plans).

The cons. Politicians as disparate as senators Elizabeth Warren (D-Mass.) and Marco Rubio (R-Fla.) have tried to discourage buybacks. The critics hope to nudge companies to invest more in their operations, generating new jobs. 

Although some studies highlight the positive aspects of buybacks, others conclude that shareholders often benefit more from alternative uses of cash. Greg Milano, CEO of Fortuna Advisors, an investment consulting firm, says Fortuna found over the past 12 years that, on average, firms that raised earnings per share due to investments in operations generated twice the stock-price gain of companies that raised per-share profits through buybacks. Dividend payouts also led to slightly higher returns than did buybacks. 

And Milano warns that despite the hype, many buybacks don’t end up giving investors a bigger share of a company because companies often issue more shares in stock-based compensation plans than they repurchase. Worst of all, investors have been burned by companies that spent billions on buybacks instead of cleaning up their balance sheets or investing in their businesses to protect against downturns—as some airlines did recently, for example. (For more on airlines, see Why Airline Stocks Are a Bad Deal)

How to cash in. Investors who still want to ride the coattails of buyback programs should follow three principles, experts say. The stocks mentioned below provide good examples.

Avoid dilution. Don’t jump at every buyback announcement. Check whether the company’s overall share count is actually decreasing, thereby raising your ownership stake in the company, advises Faber. You can look up a company’s outstanding shares in its Securities and Exchange filings, or you can find its most recent share count on websites such as Yahoo Finance and YCharts. A good example is McKesson (MCK), says Faber, whose investment firm owns the stock. The distributor of drugs and medical supplies has reduced its share count by 7% in the past year, and over the past five years the stock price has doubled. 

Look for price discipline. Successful repurchasers, like successful investors, should buy low. Buffett’s Berkshire Hathaway (BRK.B), sitting on more than $100 billion in cash, buys back its own shares when the price falls below what Buffett calls its “intrinsic value.” Morningstar sector strategist Greggory Warren notes that the company has repurchased $58 billion worth of its common stock since 2019, reducing its share count by about 10%. Warren, a Berkshire bull, believes the company is focused on reducing its long-standing cash hoard through a mix of stock purchases and share buybacks. 

Bet on healthy firms. Fortuna’s Milano says the companies most likely to have high long-term returns on their buybacks have strong balance sheets and, ideally, are less vulnerable than other firms to economic or commodity cycles. One company high on his list: Apple (AAPL). Since the start of 2021, Apple has bought back more than $200 billion of its stock, reducing its share count by about 5%. In that time, the stock has gained roughly 6%, not including dividends, compared with a loss of 3% for the S&P 500 index. Says Howard Silverblatt, senior index analyst for S&P Dow Jones Indices, “Apple is the poster child for buybacks.”

A bit of advice about airline stocks: Resist them. I know it’s hard. Warren Buffett once joked about his own addiction, saying, “I am Warren, and I am an aeroholic.” Buffett’s mentor, the scholar and investor Benjamin Graham, was right from the start. He wrote in 1949 that it’s obvious that the airline industry will take off, but that doesn’t make airline stocks good investments. 

In the late 1980s, Buffett bought US Airways preferred shares anyway and made a little money for Berkshire Hathaway on the dividends, all the while disparaging his choice. In 2007, he wrote in his annual shareholder letter, “If a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down. Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it.” 

But he remained attracted. In 2016, he started buying a chunk of nearly the entire U.S. industry, eventually paying $7 billion to $8 billion to buy roughly 10% of American Airlines Group, United Airlines Holdings, Delta Air Lines, and Southwest Airlines. By 2019, he had a small profit. Then COVID-19 struck, and he immediately pulled out, calling his investments “an understandable mistake.” A year later, the stocks had taken off, with United and American more than doubling between May 1, 2020, and May 1, 2021. Such is life with airline stocks. They’re suitable only for short-term market timers, and no one—not even Warren Buffett—can time the market, knowing precisely when to jump in and out.

That is just one of the lessons that airline stocks teach. More important is the question of why, as Ben Graham predicted, they have been so lousy in the long run. If you understand the deficiencies of airlines, you can apply the wisdom more broadly.

Begin with just how poorly these stocks have performed. US Global Jets (JETS) is an exchange-traded fund that holds airline shares, with about 10% of its assets in each of the four largest U.S. carriers, another 30% in smaller international lines, and the rest in related stocks such as Boeing and Expedia. If you insist on owning a diversified portfolio of airline stocks, this is the best choice, however flawed. Over the past five years, the ETF has lost an annual average of 12%, compared with a gain of 9.3% for the broad-market S&P 500 index. (Prices and returns are as of October 7; stocks I like are in bold.) 

US Global Jets was launched only in 2015. The returns of the large airlines over long periods are mostly horrendous as well. American, for example, has returned a negative 9.9% annualized over 15 years, meaning a $10,000 investment would have collapsed to roughly $2,100 over the period. United was a loser, too. Southwest, the best-run of the four largest lines, managed a return of 5.8%, compared with 8.0% for the S&P 500; Delta returned a paltry 4.1%. Since 1978, there have been well over 100 bankruptcy filings by airlines. Airlines suffered in many different years. United filed in 2002, Delta in 2005 and American in 2011. The field is littered with fabled names of the past: Pan American (bankrupt in 1998), TWA (1992 and 2002), Eastern (1989 and 1991) and Buffett’s US Airways (2002 and 2004). 

So what’s the problem? There are several. Airlines are:

Too competitive. In 1978, Congress deregulated the airlines, allowing companies to set their own fares and routes—a boon to consumers, but the beginning of fare wars (and bankruptcies, as we have seen) for the lines themselves. In 1980, the average round-trip U.S. airfare was $593; today, it’s $328. After adjustment for inflation, fares have fallen 85%. Meanwhile, 381 domestic airlines are competing for business, but regulators and Congress have been reluctant to allow mergers that would give the larger ones a shot at better profitability. For example, a JetBlue Airways bid to buy low-cost carrier Spirit Airlines, even if successful, would likely face severe headwinds getting government approval. 

Too commoditized. Domestic airlines have tried hard, but they can’t differentiate themselves from each other by brand. All that counts is price and timetable, so no airline can charge a premium.

Too subject to the vagaries of the price of oil. Fuel represents an average of about 20% to 25% of an airline’s total costs, and although companies can hedge the cost in the futures market, they are generally helpless to control this volatile expense. 

Too capital intensive and debt ridden. Airlines need to invest heavily in planes through either purchases or leases, which means either raising equity (it’s difficult to attract investors in an industry that’s not very profitable) or issuing debt. At the end of 2021, for every $1 of equity, Delta had $19 in debt; for United, the figure was $12. Overall, the industry has a debt-to-equity ratio of about five to one, compared with one to one for all listed U.S. companies.  

Too dependent on organized labor. According to Forbes, airlines represent “the most heavily unionized major U.S. industry. At American Airlines, United Airlines and Southwest Airlines, three of the four largest airlines, between 80% and 85% of the workforce is unionized. Nationwide, about 11% of the workforce is unionized.” In addition, post-COVID, airlines are facing a severe and persistent pilot shortage, as well as difficulty hiring flight attendants and other staff. This crisis has led to operational cutbacks and extra expenses for both compensation and training. Alaska Airlines, perhaps the best-managed of all the U.S. carriers, recently agreed to raise the pay of its pilots this year by 15% to 23%.

Too lacking in innovation. Planes today are actually slower than they were 40 years ago. It takes 19 minutes longer to fly from New York to Denver than it did in 1983. And that figure doesn’t count the additional time at the airport for security. Much of the innovation in flying has gone into fuel conservation—a big reason for slower planes—but technology has not done much to improve either the efficiency or the comfort of flight.

Too dependent on government. Unlike in Europe, nearly all the airports in the U.S. are run by state and local governments and thus are subject to the constraints of bureaucracy and politics. The antiquated air-traffic control system, run by a federal agency, has bedeviled airlines for decades. 

For all these reasons, I urge you to stay away from airline stocks—and to apply these same lessons to the rest of your investing. But the wider aviation sector does offer opportunities to play the powerful trend of more and more of the world’s population going up in the air. 

Consider Air Transport Services Group (ATSG), a diversified maintenance, leasing and cargo company whose shares have actually risen in the past year. It trades at a price-earnings ratio, based on forecasts for year-ahead profits, of 11. Shares of a similar maintenance firm, AAR (AIR), have doubled from their 2020 low but remain modestly priced. Grupo Aeroportuario del Pacifico (PAC), which I recommended in my column last month on emerging markets, operates five airports, mostly on the West Coast of Mexico. The stock has held up this year and yields 5.3%. All of these stocks are small, with market caps ranging from $1 billion to $6 billion. 

If you’re having a hard time shaking your aeroholism, I’ll suggest Panama-based Copa Holdings (CPA), which flies to 29 destinations, mainly in Latin America. Founded in 1947, Copa trades at a P/E of just 9, based on projected profits. Yes, it’s an airline, but just one. 

James K. Glassman chairs Glassman Advisory, a public-affairs consulting firm. He does not write about his clients. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. He owns none of the securities mentioned here. You can contact him at James_Glassman@kiplinger.com.

Stocks gained ground Monday as investors looked ahead to a busy week of earnings and economic data, as well as Tuesday's highly anticipated midterm elections.

While the outcome of the midterms will certainly draw some interest from investors, the results of Thursday's consumer price index will likely be more important to markets. "It is still all about inflation and while this report might not be as hot as the last few, it still should show that rents and the core-service sector part of the economy are still hot," says Edward Moya, senior market strategist at currency data provider OANDA. "Inflation might not fall as quickly as some Fed members are expecting and that could support the idea that rates will stay higher for longer."

As for today's market, the S&P 500 Index rose 1.0% to 3,806 and the Nasdaq Composite advanced 0.9% to 10,564. However, it was the Dow Jones Industrial Average (+1.3% at 32,827) that led the path higher as blue-chip drugstore chain Walgreens Boots Alliance (WBA) gained 4.1% on news it will invest $3.5 billion in primary care provider VillageMD's acquisition of Summit Health, an owner of urgent care centers. WBA is VillageMD's largest shareholder with a roughly 53% stake.

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In other individual stock news, data mining firm Palantir Technologies (PLTR) slid 11.5% after the company's third-quarter profit fell short of the consensus estimate. On the flip side, Facebook parent Meta Platforms (META) jumped 6.5% after the company said it is planning to start laying off thousands of employees later this week.

Behind Berkshire's Q3 Earnings

Also in the winner's circle today was Warren Buffett's Berkshire Hathaway (BRK.B). Shares of BRK.B rose 1.0% after the holding company released its third-quarter earnings report over the weekend. While the bear market took a toll on Berkshire's bottom line over the three-month period, its diversified income stream – which includes companies ranging from battery maker Duracell to healthcare liability insurance provider MedPro Group – was useful in propping up other sections of its financial statement. 

Among the highlights of BRK.B's Q3 results were a 20% year-over-year pop in operating income and higher-than-expected earnings per share. Read on to see what other notable developments occurred for Berkshire in Q3, and why BRK.B remains a top defensive stock in what has been a turbulent year for the broader equities market.

Warren Buffett's Berkshire Hathaway (BRK.B, $287.47) showed once again why it's one of the best stocks to buy for a bear market.

Berkshire Hathaway, of which Warren Buffett serves as chairman and CEO, shrugged off rising fears of recession and the impact of Hurricane Ian to post a 20% jump in third-quarter operating earnings. 

Conglomerates have fallen almost entirely out of fashion, but it's a corporate structure that's working wonders for BRK.B shareholders during our current period of heightened uncertainty. Berkshire Hathaway owns outright or has investments in scores of companies across a wide range of industries. That highly diversified income stream came in mighty handy in Q3.

Insurance underwriting, for example, booked an operating loss of $962 million in the quarter, hurt by the Atlantic hurricane season. Insurance-investment income, however, rose to $1.41 billion from $1.16 billion a year ago, helped by higher interest rates.

Meanwhile, profits at Berkshire Hathaway's utilities and energy businesses increased to $1.59 billion from $1.50 billion in last year's third quarter, while railroad earnings slipped to $1.44 billion from $1.54 billion a year ago.

Then there's everything else. Berkshire Hathaway's myriad businesses range from Kraft Heinz and Fruit of the Loom to Acme Brick Company and Nebraska Furniture Mart. Companies in which Warren Buffett's holding company has a controlling interest of at least 50% generated operating income of $3.25 billion, up from $2.71 billion a year ago. 

Berkshire Q3 Earnings Easily Top Estimates

Add it all up, and Berkshire Hathaway's operating income soared 20% to $7.76 billion in Q3. On a per-share basis, earnings came to $3.53, which easily topped Wall Street's estimate of $2.92, according to data from S&P Global Market Intelligence.

It's that sort of resilient operating performance that helps explain why BRK.B has been such a solid defensive stock in an otherwise dismal year for equities. Indeed, shares in Berkshire Hathaway were off just 3.9% for the year-to-date ended Nov. 4, beating the broader market by 17 percentage points. 

That said, the bear market has taken its toll on Berkshire's bottom line – at least as far as the accountants are concerned. Warren Buffett's company was forced to book a loss of $10.1 billion on its investment portfolio in Q3.

These are paper losses only, and reflect the highly concentrated nature of Berkshire Hathaway's equity portfolio. Apple (AAPL), for example, which is BRK.B's largest holding at more than 40% of the portfolio, has lost about a fifth of its value in 2022. Other top holdings such as American Express (AXP) and Bank of America (BAC) are also down in 2022. 

Write-downs on its stock investments caused Berkshire Hathaway to post a net loss of $2.69 billion in Q3, vs. net income of $10.34 billion in the year-ago period. 

No one values Warren Buffett's performance based on net income, however. 

In other notable Q3 developments, Warren Buffett spent another $1.05 billion on stock buybacks. Berkshire Hathaway has now spent a total of $5.25 billion on share repurchases over the first nine months of the year. 

And yet the company still has a massive pile of cash on its hands. Berkshire Hathaway ended Q3 with almost $109 billion in cash, cash equivalents and short-term investments. That's up from $105.41 billion as of June 30. 

BRK.B Stock Remains a Buy

Bottom line? Warren Buffett's Berkshire Hathaway remains a bear-market buy.

Of the five analysts covering BRK.B, one rates the stock at Strong Buy, two say Buy and two have it at Hold, according to S&P Global Market Intelligence. That works out to a consensus recommendation of Buy, with analysts citing valuation as a reason to be constructive on the name.

"We calculate BRK's shares are currently trading at around a 23% discount to its intrinsic value (29% as of 9/30)," writes UBS Global Research analyst Brian Meredith, who rates shares at Buy. 

Thanks in no small part to a bargain share price, the Street sees big returns in BRK.B's not-too-distant future. Analysts' average price target of $348.50 gives BRK.B implied upside of about 21% in the next 12 months or so. 

When it comes to buying stocks, there are typically two big-picture strategies you can choose from – growth investing or value investing.

The idea of growth investing largely speaks for itself. Simply put, you invest in companies growing their sales and profits at impressive rates.

But does that mean value investing involves companies that aren't growing? And how is this strategy better or worse?

If you're wondering what value investing is, you're not alone. Thankfully, the basics are pretty easy to understand, even for novice investors.

What is value investing? 

Value investing doesn't mean you're buying a stock that has zero growth. It just means that growth isn't the main appeal. Instead, you're investing in a company that is likely to be underpriced and overlooked when compared with its flashier rivals.

Maybe the value stock in question isn't seeing massive expansion, rather it delivers a predictable stream of earnings and pays consistent dividends as it hums along. Or maybe the company has been severely punished by Wall Street after falling on hard times, creating a bargain opportunity.

Or perhaps it's just plain boring, like a publicly traded utility stock or a small and specialized chemical manufacturer, and nobody is even paying attention.

Whatever the case, value investing is usually about finding hidden gems rather than chasing flashy companies everyone else is talking about. The appeal isn't popularity or future growth projections, but rather the current underlying value of that business right now.

What is an example of a value investment?

To illustrate what value investing is with a practical example, let's look at the iconic industrial stock GE Aerospace (GE), which changed its company name from General Electric following the recent spinoff of GE Vernova (GEV).

The firm has seen tepid growth in recent years. But look at GE stock, which nearly doubled in 2023 and is up about 75% in 2024. Clearly, investors see something in this company – and what they see is its underlying value.

Wall Street was overly negative on GE after a few bad years and wound up overselling the former Dow Jones stock. The company has been working on a multiyear turnaround plan, including the spinoff of both its healthcare and renewable energy businesses.

Things are looking up, even if GE is less dominant than it was in decades past. But GE didn't have to be a booming growth stock to make its investors money. It simply needed to be overlooked and undervalued.

How do I find the best value investments?

There are a host of big-name value investors on Wall Street who made names for themselves by looking for hidden gems like GE. Just a few of the more prominent ones include Berkshire Hathaway (BRK.B) chief Warren Buffett and economist Benjamin Graham, who many consider to be the father of value investing.

So what made these icons so successful, and how did they find the best stocks to buy for value investors?

There's never a sure-fire formula for any investing strategy, but a few of the metrics that value investors like Buffett and Graham closely monitor include:

Debt-to-asset ratio. Value investing prioritizes companies that have modest debts backed by much more substantial assets. Not only does a low debt load provide stability, it also tends to prove management is responsible and has restraint. Generally, a debt-to-asset ratio of 1 or less is very attractive as it means those debts are covered.

Price-to-earnings (P/E) ratio. Bigger companies obviously have bigger profits. So it helps to normalize the raw numbers by breaking down those profits into earnings per share and then comparing them against the company's current stock price. This allows for "apples-to-apples" comparisons between stocks. Right now, the average P/E ratio of the S&P 500 is about 27, though some industry groups have averages moderately higher or lower than that figure.

Dividend yield. Dividends are regular profit-sharing payments to shareholders. A company's dividend yield takes the total payments you get over 12 months and presents that money as a percentage of your initial buy-in. As you can imagine, getting a piece of your investment back regularly is a very attractive proposition to many folks.

There are many other financial metrics out there that matter to value investors, but this list is a good start if you're interested in using value investing strategies as part of a well-rounded portfolio.

While growth investment may get all the attention, value investments can still deliver under the right circumstances.

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