A Breakdown Of Warren Buffett Portfolio

If you ask anyone who is the richest investor of all time, everyone will point fingers at Warren Buffett, and that is not by accident. He started investing when he was just 11 year sold and built his net worth to over 87 billion dollars at the time of this script. To an average person, the stock market seems so complicated where no one seems to clearly understand what's going on. Whenever things seem to go in the right direction,we end up facing a financial disaster. But unlike everyone else,

This guy seems to know a secret formula when it comes to investing. Over his life, he continuously made successful investments over and over, and he is considered by many as the greatest investor of all time. He was so good that just by the age of 16,he already made over 53K thousand dollars. Can you imagine making Making 53 grand from the stock market before you hit 16 and still be rejected by Harvard? I can, because that's what happened.

Do you want to learn how to invest like WarrenBuffett? Do you want to find out his secret formula? Then stick around because we are going totake a deep look into Warren Buffet's investment portfolio. - Buffett's 3 Golden Rules Warren Buffett is a long-term investor. He doesn't care about how the company is goingto perform today, tomorrow, or even next year.

His primary concern is where the company willbe ten years from now or 15 years from now. But How do you know how a certain companyis going to perform in 10 years? Its almost impossible to predict. That's why Buffett almost always invests incompanies with simple business models.

This is the product, these are the customers,and this is why they are going to buy this product. You don't have to be a genius to understand their business models. Its so simple that even a little kid would understand that model. That's what Buffett loves because the simpler the business model is, the easier it gets to predict the future of that company, and if their products are going to stay relevant ten years from now, for example.

The second trait that warren buffet looks for is - will the customer buy the product again? If you have the kind of a product that would sell once and the client wouldn't need it anymore, then your market is limited. A great product is when your clients would keep coming back for it every now and then, whether it's every day or every week or even every year. Like bread, for example, if you are sellingbread, you would expect the exact same customers to come back tomorrow or next week over andover, and ten years from now, people would still buy bread.

You might sell it in a different way or adifferent form. You might improve its quality, make it tastier,package it fancier, but it's still the exact same product. In fact, this factor is so important thatit led to the rise of subscription business models, where the business would charge youa little fee every month like Netflix, for example, or every year like amazon prime.

Because it's a more sustainable strategy. Once you acquire the customer, you keep generatingcashflow theoretical forever. Finally, the third component is the brand. People have the tendency to buy from the companies that they feel connected to and familiar with. Whos sneakers would you buy, the first one sare from a brand that you have never heard of, and the second ones are good old Nikes. Even if they are cheaper and look fancier,you probably would hesitate to buy them because you simply haven't heard of that brand before.

On the other side, you easily recognize Nike. It's a well-established brand and is know nfor making great sneakers. You might already be wearing a pair of Nike shoes, so which one would you chose. And that's why Buffett pays such critical attention to how powerful is the brand name before throwing his billions into that company. He understands how much of an influence it'sgoing to have on the consumer's decision.

In fact, if the brand is strong enough, consumerswould buy almost anything that company produces. And now, since we know Buffett's secret formula,let's take a look at his portfolio and find out if he practices what he preaches. Warren Buffett has always stayed away fromtech companies, but in 2016, he made an exception and invested billions of dollars in Apple.

In fact, his company, Berkshire Hathaway,holds almost a billion Apple stocks worth an estimated amount of 118.6 billion dollars. It is his biggest position, at least for now. Apple, of course, does not sell bread, butif you pay attention, it has all the three traits that we have just talked about. Their Business model is simple. At least for now, they want to keep makingdevices that people just need on a day to day basis.

Such as an iPhone or MacBook, they rarely come up with super innovative products, but they just know how to make a smartphone forthe average consumer. Do apple customers come back again over and over? Yes, they do, iPhone is, of course, not an necessity, but people keep coming back for it every September. In fact, in the last ten years, Apple hasdrastically been shifting to a subscription-based model. It's not enough to have an iPhone. You need a subscription to apple music, apple tv, iCloud, and a million other things. And lastly, does apple has a strong brandname? Of course! It is probably the most powerful brand in the world! His second-largest investment is in Bank ofAmerica.

He holds 29.8 billion dollars worth of sharesof Bank of America. We are not going to get into the detail, butyou get the picture. Their business model is straightforward, theyhave a strong brand, and their clients keep coming back for financial services. And it doesn't seem like people will no longerneed financial services in the future. That's why he has also invested in other banks,starting from Wells Fargo to Goldman sacks.

He was also a huge investor in many airlines,but 2020 forced him to sell all of his airline shares because the future of this industryseemed too unpredictable. He also holds 21 billion dollars worth ofCoca Cola stocks. In fact, he started investing in Coca-Cola back in 1988, and his investments since then have grown by over 16 times. What do they sell, a drink! Who are their potential customers? Pretty much anyone who is thirsty! The entire world! Is it a one-time product, or their clients keep coming back for it? Of course, they will come back. Some people drink like 4 or 5 cans a day.

It is addictive. It is not easy to quit even if its unhealthy! However, it has a lot of competitors, I mean,the shops are filled with an endless number of soft drinks, but the coca-cola brand nameis so powerful that out of 20 or 30 options, you easily recognize it. Most people would probably pick Coca-Cola without even thinking. And if it's out of stock, you probably wouldgo to another store instead of choosing one of the 30 other options they have. He is also a major investor in American Express,Kraft Heinz, and US Bancorp. I can't name them all because they are toomany of them, but I will leave a link where you can find out the rest of the companies.

Besides his investments in publicly traded companies, he also owns entire private companies or a significant majority like in Gillette,for example. He purchased 600 Million dollars worth of Gillette Shares. Gillette holds the exact same position inits industry as Coca-Cola does in beverages. They are like twin brothers. Regardless of what happens, people will stillshave. And their products are just filling that basichu man need. You don't need to have an IQ of 500 to understandwhy people are buying razors or while they will keep coming back for that product eventen years from now. But of course, Gillette isn't the only companyin its industry.

It has a ton of competitors. However, if you ask people to name a razorbrand other than Gillette, 99% of people won't be able to do that. Do you see how it perfectly matches with allthe requirements that Buffet has? It's a simple product that people keep buyingover and over. He is also a huge investor in GEICO, Duracell,Netjets, Sees Candy, McLane, and many, many others. His portfolio is so diversified that if one industry suffers, it will not have any meaningful impact on his net worth.

Berkshire Hathaway suffered tremendously this year, but it has risen back to its pre-pandemic levels already, and I won't be Surprise Berkshires if this company will join the trillion-dollar club in the next few years. And now it's your turn? Are you an investor in Berkshire Hathaway? Do you think his strategies are still relevant to this day? Let me know in the comments below.

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