Warren Buffett is the greatest investor of all time. Not only has he smashed the market over the long run, but he has also built up a net worth of over $80bn.
Given his investing talent, I like to keep an eye on Buffett’s investments. With that in mind, here are a few takeaways from an analysis of his current portfolio.
Warren Buffett loves Apple stock
Look at Buffett’s portfolio and one thing immediately stands out – he has an enormous holding in Apple. Currently, his stake in the iPhone maker is worth around $117bn. This is his largest holding by a wide margin. His next largest holding is Bank of America at about $25bn. Clearly, he’s not afraid to take a big bet on a company he’s bullish on.
Why does Buffett like Apple so much? One reason is the company’s brand power. Another is its ecosystem (where all Apple products connect to each other). “It’s probably the best business I know in the world,” he said about Apple earlier this year.
Growing technology exposure
Another takeaway from Buffett’s portfolio is that his attitude towards the technology sector has changed dramatically in recent years. In the past, Buffett avoided technology stocks. He didn’t understand them.
Today, however, he owns a number of tech stocks including Apple and Amazon. Interestingly, he recently took a stake in cloud computing specialist Snowflake, which enjoyed a blockbuster IPO a few weeks ago. This indicates that he sees opportunities in cloud computing.
Bullish on payments
One area of technology, in particular, that Warren Buffett appears to be very keen on is payments. Currently, he has substantial holdings in Mastercard, Visa and American Express.
It’s not hard to see why he likes payments businesses. This is an industry that has massive growth potential. According to McKinsey, credit cards will add an additional $160bn of revenue over the next five years as the world transitions away from cash. I think this is a very smart play from Buffett.
Buffett likes brands
Another observation is that he continues to like consumer goods companies that own powerful brands. His view is that brands provide a competitive advantage.
The consumer goods companies in his portfolio that own big brands include:
Johnson & Johnson, which owns Johnson’s, BAND-AID, Listerine, and Neutrogena
Coca-Cola, which owns Coca-Cola, Sprite, Schweppes, and Powerade
Kraft Heinz, which owns Kraft, Heinz, Philadelphia, and Capri Sun
Procter & Gamble, which owns Pantene, Pampers, Gillette, and Oral-B
Mondelez, which owns Cadbury, Oreo, Milka, and Toblerone
These kinds of companies tend to be solid long-term performers.
Holding on to banks
Finally, Warren Buffett hasn’t given up on bank stocks. Recently, he has been trimming down his positions in some of his bank holdings. However, he still has decent-sized holdings in Bank of America, Wells Fargo,US Bancorp, JP Morgan Chase and Bank of New York Mellon.
Clearly, he still believes that bank stocks have a place in a modern-day investment portfolio.
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Edward Sheldon owns shares in Apple and Mastercard. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon, Apple, Mastercard, and Visa. The Motley Fool UK has recommended Johnson & Johnson and Snowflake Inc and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.