Warren Buffett is widely regarded as the greatest stock market investor all time. As a result, many investors, myself included, keep a close eye on his Berkshire Hathaway portfolio, as well as his moves.
In recent years, Buffett has been reshaping his portfolio. Here’s a look at the big move he’s been making.
Buffett is moving into technology
In the past, Buffett’s portfolio was dominated by ‘old economy’ stocks such as railroad operators, banks, insurance companies, and retailers. These industries were his area of expertise (or ‘circle of competence’ as he likes to say). Notably, the stock market legend avoided the technology sector in the past. One reason for this was that he felt that he didn’t understand it well enough.
Today, however, Berkshire Hathaway is actually quite tech focused. Over the last decade, Buffett, along with his investment lieutenants, Todd Combs and Ted Weschler, have repositioned the portfolio for the digital age. Believe it or not, tech now accounts for around 45% of the portfolio. As Berkshire Hathaway analyst at Edward Jones, James Shanahan, says: “There has been a pretty significant shift in the investment portfolio. Now it’s really geared towards the new economy.”
Buffett’s tech stocks
Now, much of Buffett’s tech exposure comes from smartphone powerhouse Apple, which he started buying in May 2016. Currently, his stake in Apple is worth around $130bn.
However, Apple certainly isn’t the only tech stock in his portfolio these days. Some other tech stocks he owns include:
Amazon: Buffett started buying shares in the e-commerce/cloud computing giant in 2019 and his stake is now worth around $1.8bn.
Snowflake: Buffett invested around $735m into this high-growth cloud computing company in 2020 when it went public. Today, his stake is worth nearly $2bn.
Mastercard: He got involved here back in 2011 and his position today is worth about $1.5bn. It’s worth noting that Mastercard – which operates one of the world’s largest electronic payment systems – has recently been moving into the crypto space.
Visa: He also bought this stock in 2011. His stake today is worth about $2.2bn. Recently, Visa has been acquiring a ton of small fintech start-ups.
Verisign: This is a global provider of domain name registry services and Internet infrastructure. Buffett started buying here in 2013 and his stake is now worth around $2.7bn.
StoneCo: This is a Brazilian fintech company that he invested in in 2018. His position is now worth about $430m.
As a long-term investor who likes to invest in a similar way to Buffett (i.e., buy great companies for the long term), the clear takeaway for me here is that positioning one’s portfolio for the new digital economy is a good move. The fact that the investment guru – who previously didn’t like the tech sector – has bought a number of tech stocks, underlines that technology is here to stay.
Of course, it’s important to own a diversified portfolio. Tech stocks can be highly volatile at times. So, I’m not going to go all-in on tech. Like Buffett, I’m going to keep plenty of exposure to other sectors such as healthcare and consumer staples.
However, I’m certainly going to keep this move in mind as I build my own portfolio going forward. In today’s digital world, I think it’s important to have plenty of tech exposure.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Edward Sheldon owns shares of Amazon, Apple, Mastercard, and Visa. The Motley Fool UK owns shares of and has recommended Amazon, Apple, Berkshire Hathaway (B shares), Mastercard, Snowflake Inc., and Visa. The Motley Fool UK has recommended the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. 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.