Warren Buffett has been buying shares for 8 decades. Here are his favourites

Jon Smith takes a look at some of Warren Buffett’s favourite purchases over the decades, and shares the investment lessons he’s learnt.

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Warren Buffett at a Berkshire Hathaway AGM

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Back in 1941, Warren Buffett bought his first stock. Add on 83 years and we get to present day. He now buys shares through his company, Berkshire Hathaway (NYSE:BRK.B). If anything, this makes it easier for a retail investor like myself to see what he’s bought and sold in the past. Based on his investment activity over the decades, there are some clear stocks that he really likes, for different reasons.

A multi-decade pick

Berkshire Hathaway first bought shares in Coca-Cola back in 1988. The initial stake of $1.3bn is worth a lot more in todays money. Buffett kept adding to this over the decades, with the current stake worth over $20bn.

It has been a clear favourite for him over the years, and for good reason. He looks for companies that have a strong track record of performance, with a strong hold on the marketplace. This is very true for Coca-Cola, which is one of the most recognisable and dominant soft drinks in the market.

Aside from this, the dividends have been a handy income driver for Berkshire Hathaway. For example, during 2023 the dividends were a whopping $736m. Granted, this doesn’t sound a lot based on the $97.1bn net profit made by Berkshire Hathaway in 2023. But it’s over 50% of the initial cost of the Coca-Cola stock in 1988!

The lesson I take from this is that over the course of the very long term, investments can yield significant gains for a patient investor.

Continued interest in a key sector

Another area Buffett is a big fan of is financial services. Berkshire Hathaway generates a good amount of money from its insurance arm, Berkshire Hathaway Reinsurance Group. It also makes cash from GEICO, the car insurer it owns.

Further, the company has stakes in a variety of companies in the sector, ranging from American Express right through to banking titans such as the Bank of America and Citigroup.

The lesson I learn from this is that Buffett is keen on reliable business models that generate boring revenue. What I mean is that insurance has been around in some form for centuries. It’s a model that works. The same can be said for traditional banking, that of taking in deposits and lending out funds.

The action plan right now

It’s interesting to note that the business finished 2023 with a large cash pile of $167.6bn. It’s obvious that Buffett doesn’t have any clear conviction right now, but does have the dry powder to take advantage if we get a correction (or even a market crash) for whatever reason.

This makes me want to follow suit. Even though I’m not changing my investing strategy, I’m building up a buffer of cash that I can put to work if I see an opportunity in the coming months.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

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