According to analysts, Warren Buffett, the legendary investor, has a winning investment strategy. The Berkshire Hathaway CEO and founder tries to diversify his investment portfolio from time to time. Recently, the billionaire bought some new stock to multiply his income.
Berkshire Hathaway bought Royalty Pharma and Floor & Decor shares in the third quarter of 2021. Thus, Warren Buffett grew a stake in Chevron and pared stakes in Visa and Mastercard.
In the second quarter of 2021, Berkshire Hathaway has completely exited its stake in Biogen and Merck, including Merck Organon. The company also slashed stakes in AbbVie and Bristol-Myers Squibb. Moreover, Buffett added to his portfolio shares of consumer goods companies, such as grocery chain Kroger and luxury furniture retailer RH. During the second and third quarters of 2021, the largest long-lived assets in Berkshire Hathaway's portfolio remained unchanged. They include Bank of America, Apple, Coca-Cola, and American Express.
Notably, Buffett uses a buy-and-hold strategy. Stocks of leading companies have been part of his portfolio for years and even decades. However, in the fourth quarter of 2021, the investor decided to dump some of his shares and buy new ones.
Berkshire Hathaway Corporation cut stakes in leading drug makers after holding them for no more than a few quarters. Last year, Buffett's investment company bought and sold stock in Pfizer and Barrick Gold. It got rid of Costco and other airlines stocks following the collapse of the airline sector due to the COVID-19 pandemic. Warren Buffett receives the highest revenues from Coca-Cola, whose stock he bought in 1987. Notably, he has been earning income from stocks of the popular drink producer for 60 years.
Buffett's top stocks include Bank of America ($1.01 billion), Apple ($887.1 million), Coca-Cola ($400 million), Kraft Heinz ($325.6 million), Verizon ($158.8 million), American Express ($151.6 million), US Bancorp ($126.4 million), Bank of New York Mellon ($72.4 million) and General Motors ($60 million).
Buffet’s stock portfolio remains highly concentrated in a handful of companies. Thus, Apple stock makes up about 40% of the total number of equities. Experts call them standard because of their high profits and professional management. As a result, they bring Berkshire Hathaway a solid and stable income. From 1965 to 2020, Berkshire's stock delivered a compound annual growth rate of 20%, double that of the S&P 500 index.
