Today marks the final trading day for what's been a phenomenal year for the bulls. As of the closing bell on Dec. 22, the ageless Dow Jones Industrial Average, broad-based S&P 500, and growth stock-fueled Nasdaq Composite were higher by 13%, 24%, and 43% for the year, respectively.
It hasn't been a shabby year either for one of Wall Street's most prestigious investors, billionaire Warren Buffett. The CEO of Berkshire Hathaway(NYSE: BRK.A)(NYSE: BRK.B) has overseen a 17% gain in his company's Class A shares (BRK.A) this year and a greater than 4,430,000% aggregate gain in those shares since taking the reins in the mid-1960s.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
The Oracle of Omaha's success as an investor has earned him quite the following, ranging from retail investors to Wall Street professionals. Mirroring Warren Buffett's investments has been a strategy that's made patient investors richer for decades.
As we prepare to open the curtain on 2024, let's take a closer look at the 49 stocks Warren Buffett currently oversees in Berkshire Hathaway's $371 billion portfolio. Note: I've excluded the two index funds Berkshire owns -- the SPDR S&P 500 ETF Trust and the Vanguard S&P 500 ETF -- since index funds represent baskets of securities and aren't stocks.
The heavy hitters
Although Warren Buffett and his investing team oversee investments in more than four dozen stocks, a little over 85% of Berkshire's $371 billion in invested assets are tied up in eight companies:
- Apple(NASDAQ: AAPL): $177,252,489,955 in market value (as of Dec. 22)
- Bank of America: $34,528,242,561
- American Express(NYSE: AXP): $28,134,397,599
- Coca-Cola(NYSE: KO): $23,328,000,000
- Chevron(NYSE: CVX): $16,653,004,053
- Occidental Petroleum(NYSE: OXY): $14,820,358,041
- Kraft Heinz: $11,840,081,982
- Moody's (NYSE: MCO): $9,561,512,557
These top investment ideas from the Oracle of Omaha and his "investing lieutenants," Todd Combs and Ted Weschler, have a few things in common. They're all historically profitable, time-tested businesses with strong management teams and generally well-known brands.
Apple, which accounts for 47.7% of Berkshire's invested assets, has topped the list of Interbrand's "Best Global Brands" report for 11 consecutive years. It's an exceptionally profitable company that's driven by innovation -- whether that be with its iPhone or its ongoing shift to subscription services.
These eight heavy hitters are also, in many instances, longtime holdings. Coca-Cola and American Express have been continuous holdings in Berkshire's portfolio for more than three decades, while Moody's has been held since being spun out from Dun & Bradstreet in 2000. Thanks to the power of dividend growth over time, Buffett's company is netting an annual yield of almost 57% relative to its cost basis in Coca-Cola. It also takes home a respective 31% and 28% yield, annually, from Moody's and American Express, relative to its cost basis in each company.
Additionally, we're witnessing some of the largest bets on energy stocks ever by Warren Buffett and his team. Having more than $31 billion of invested assets tied up in Chevron and Occidental Petroleum is a pretty clear signal that Berkshire's brightest minds expect the price of crude oil to remain historically high. Macro factors, such as Russia's ongoing war with Ukraine and multiple years of capital underinvestment by energy companies during the COVID-19 pandemic, should keep the oil supply tight and provide a boost to the spot price of crude oil.
Berkshire's other billion-dollar bets
Moving beyond Berkshire's eight major holdings, Warren Buffett and his aides have at least $1 billion invested in 20 additional companies:
- Mitsubishi: $5,571,181,109
- Itochu: $4,784,080,125
- Mitsui & Co.: $4,573,017,556
- DaVita: $3,765,850,818
- Citigroup: $2,809,750,375
- VeriSign: $2,645,014,367
- BYD: $2,318,243,737
- Kroger: $2,257,000,000
- Marubeni: $2,202,620,084
- Sumitomo): $2,171,139,692
- Visa(NYSE: V): $2,144,312,588
- Mastercard(NYSE: MA): $1,690,737,417
- Capital One Financial: $1,617,991,432
- HP: $1,554,376,747
- Amazon: $1,534,200,000
- Charter Communications: $1,463,000,067
- Paramount Global: $1,405,964,625
- Liberty SiriusXM Series C: $1,243,966,698
- Snowflake: $1,198,552,322
- Aon: $1,195,847,000
If there's one thing that stands out about Berkshire's portfolio, it's Warren Buffett's love for financial stocks. Whether it's banks, credit-service providers, or insurance companies, there's no sector of the market Buffett feels more proficient putting his money to work in than financials.
This is also a good time to mention that Warren Buffett favors cyclical businesses. Financial juggernauts Visa and Mastercard, which control approximately 53% and 24% of U.S. credit card network purchase volume (as of 2021), thrive during long-winded periods of expansion.
Even though recessions are a perfectly normal part of the economic cycle, expansions last substantially longer. Berkshire's investment portfolio is designed to take advantage of these lengthy periods of growth for the U.S. economy.
Furthermore, the importance of valuation can't be overstated enough. You'll note that five of Berkshire Hathaway's billion-dollar-plus investments are Japanese trading houses (Mitsubishi, Itochu, Mitsui, Marubeni, and Sumitomo). These are time-tested, diverse businesses that typically trade at single-digit price-to-earnings (P/E) ratios. If the Oracle of Omaha can't find much in the way of value domestically, he's more than willing to look overseas to land amazing deals.
Image source: Getty Images.
Warren Buffett's smaller holdings
Now that we've looked at the meat and potatoes of what makes Warren Buffett's $371 billion portfolio tick, let's take a final look at the remaining 21 holdings, which range in market value from $995 million to as small at $8.8 million:
- Ally Financial: $995,280,000
- D.R. Horton(NYSE: DHI): $895,098,917
- Nu Holdings: $880,615,404
- T-Mobile: $816,231,820
- Liberty Sirius XM Series A: $580,970,800
- Floor & Décor Holdings: $543,533,800
- Louisiana-Pacific: $498,920,455
- Liberty Formula One Series C: $494,545,762
- Liberty Live Series C: $411,571,852
- Markel Group: $220,109,136
- StoneCo: $192,625,018
- Liberty Live Series A: $182,172,163
- Globe Life: $101,042,992
- NVR(NYSE: NVR): $77,563,649
- Sirius XM Holdings(NASDAQ: SIRI): $52,967,235
- Diageo: $33,087,520
- Lennar Class B (NYSE: LEN.B): $20,180,698
- Liberty Latin America Series A: $18,941,702
- Jefferies Financial Group: $17,303,300
- Liberty Latin America Series C: $9,270,624
- Atlanta Braves Holdings Series C: $8,789,249
What you see from this section of Berkshire Hathaway's portfolio is a handful of investments that likely originate from Todd Combs and Ted Weschler. Many of the investments made by Buffett's "lieutenants" tend to be around or below $1 billion in market value. They're also typically shorter-term investments that are added or reduced every few quarters, as opposed to being held for 10, 20, or 30 more years like Berkshire's core holdings.
This section also features the new (potential) love of Warren Buffett's life: homebuilders. Buffett and his team opened positions in D.R. Horton, NVR, and Lennar's Class B shares during the second quarter. Homebuilders offer an intriguing value proposition (low P/E ratios), given the likelihood that the Federal Reserve will be cutting rates at some point in 2024. A lower yield on the 10-year Treasury bond should correspond with more affordable mortgage lending rates, which could power new-home sales for the likes of D.R. Horton, NVR, and Lennar.
Further, satellite radio operator Sirius XM has made its triumphant return after a two-year absence from Berkshire's portfolio. Sirius XM is a legal monopoly in the satellite radio space that's able to utilize exceptional pricing power via monthly subscriptions to outpace the prevailing rate of inflation. To boot, it generates most of its revenue from subscriptions, as opposed to advertising like terrestrial and online radio operators. This makes Sirius XM more adept at dealing with economic downturns than its peers.
Though it's unlikely any of these 21 holdings will grow into core holdings for Berkshire Hathaway anytime soon, they're still worth keeping a close eye on.
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Citigroup, Ally, American Express, and Bank of America are advertising partners of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Sean Williams has positions in Amazon, Bank of America, Mastercard, Sirius XM, and Visa. The Motley Fool has positions in and recommends Amazon, Apple, BYD, Bank of America, Berkshire Hathaway, HP, Jefferies Financial Group, Lennar, Markel Group, Mastercard, Moody's, NVR, Snowflake, StoneCo, Vanguard S&P 500 ETF, VeriSign, and Visa. The Motley Fool recommends Chevron, Diageo Plc, Kraft Heinz, Kroger, Nu, Occidental Petroleum, and T-Mobile US and recommends the following options: long January 2024 $47.50 calls on Coca-Cola, long January 2025 $370 calls on Mastercard, and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
