Editor’s note: This article was first published in April 2011. It is a snapshot of Buffett’s holdings as of April 2011 (14 stocks, 3 funds, Coca-Cola at 24% of the portfolio), and his portfolio has changed a great deal since. Exxon Mobil as the world’s largest company by market capitalization is a 2011 ranking.
Since we’ve talked about Warren Buffett so much lately, and have even published a talk in which he gave advice on investing and business, the least we can do is look at where the man considered today’s best investor puts his money. Once you see his investment portfolio, you’ll understand why Warren Buffett makes such large profits from his stock market investments.
It is estimated that Warren Buffett currently holds a total of 14 stocks and has stakes in 3 investment funds, two of them tailor-made specifically for him.
His portfolio includes all kinds of stocks except, as you might expect, technology shares. The first holding we see is American Express, which makes up less than 0.5% of his total portfolio.
We also find companies that sell everyday essentials and are in full expansion, among them Lowe’s, a chain of home improvement stores that is very popular in times of crisis because of the big deals it offers. Let’s say it always stays on top in the battle with the competition, and Warren Buffett loves that style of management and marketing.
Another holding in his portfolio is Procter & Gamble, a name that may not ring many bells in Spain, although as soon as we mention its star products they’ll sound much more familiar. The products of this company, which is present in more than 75 countries, include Mr. Clean (Don Limpio in Spain), Ariel, Gillette and H&S (shampoo). Buffett knows they are not innovative products, nor the cheapest on the market, but he knows perfectly well that they are among the best sellers. So about a year ago he increased his stake in the company, and so far the move has paid off.
Nike also appears in Warren Buffett’s portfolio, as does Iron Mountain, a pioneer in information storage and protection. Buffett presumably reasoned that new laws on privacy and customer data protection would work in its favour.
These are the holdings with the least weight in Buffett’s portfolio. They may be small amounts for him, but for the rest of us it is unthinkable, for now, to invest even half of what Buffett has put into these stocks. Now let’s move on to the four holdings that carry the most weight in his portfolio.
1. Coca-Cola
Coca-Cola shares make up 24% of Warren Buffett’s portfolio, and every time their price falls, Buffett takes the opportunity to buy more. Remember: he likes to buy cheap. If Warren sold all his Coca-Cola shares today and gave half the profits to his philanthropic causes, he would automatically become the richest man in the world.
Coca-Cola is the company analysts most often recommend investing in, and it prides itself on looking after its investors, encouraging them to always come in for the long term with attractive dividends.
2. Wal-Mart
Buffett also likes retail supermarket chains, so two important holdings in his portfolio are Wal-Mart and Costco, both expanding in the middle of the crisis and present in more than 16 countries.
Both companies stand out for their steady, stable profits, and they know how to get through lean times with eye-catching offers for consumers.
3. Exxon Mobil Corporation
Capitalism and oil companies go hand in hand, so a great investor shouldn’t pass up this kind of stock. Exxon Mobil is considered the largest company in the world by market capitalization. A few months ago Buffett increased his stake in it, since its profits are expected to rise along with the price of oil.
As we can see, Warren Buffett doesn’t invest in fashionable companies, but in companies that will probably still be around when fashions change, because they have always been there. Considering that he invested in many of them a decade ago, and in Coca-Cola more than 30 years ago, we can say his current portfolio is very profitable.
Buffett may well start considering stocks in alternative energy companies.
Further reading
- Warren Buffett’s speech on investing and business
- Investing like Warren Buffett: advice and guidelines
- How you can go broke investing in the stock market
Featured image: USA White House, Public domain, via Wikimedia Commons.
