Does it make sense to buy Warren Buffett’s largest holdings?

This Fool takes a closer look at the stocks that make up Warren Buffett’s holdings and assesses whether he should be buying them.

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Warren Buffett at a Berkshire Hathaway AGM

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Warren Buffett is one of the best investors ever. Starting with a tiny sum, over eight decades he’s built his fortune to more than $130bn.

Lately, I’ve been thinking about how I can learn from the ‘Oracle of Omaha’. Over the years, he’s provided investors with so much great advice. I want to apply it to my investing as I try to beat the market.

But would it just be easier to copy his portfolio? After all, it seems to be working for him. Berkshire Hathaway’s largest two holdings are Apple (NASDAQ: AAPL) and Bank of America (NYSE: BAC). Should I buy them?

A lot to like

Apple makes up a whopping 42.4% of Berkshire’s portfolio while BofA clocks in at 10.2%. To be fair, it’s easy to see why.

What I like about both companies is they align with Buffett’s investing principle of investing in what you know. It’s simple to understand how both generate revenue. They’re quality businesses that have been around for decades.

Buffett also loves making passive income. Apple yields 0.6% while BofA offers 2.7%. They’re not the largest yields out there. However, what they are is sustainable. Apple has paid a dividend since 2012 while BofA has upped its payment for the last 11 consecutive years. Last year, Buffett received over $1.87bn in dividends from just these two stocks.

There are other reasons I can see why he might own them. For example, Apple provides exposure to the artificial intelligence (AI) industry, which has gained incredible traction. The firm is investing heavily in the space, with it reportedly set to spend over $1bn a year.

Turning to BofA, trading on 11 times earnings, I think the stock looks good value for money. While its fourth-quarter results were a mixed bag, there were positives to take away, such as a rise in dealmaking for its investment banking arm.

Not as easy as it looks

But as easy as Buffett makes it look with his eyewatering returns, it’s not all plain sailing.

For example, Apple has got off to a weak start this year following a slowdown in sales from China. To make matters worse, the company has been fined $2bn by the EU related to it limiting competition from music streaming services.

Unlike Apple, BofA stock has performed strongly in 2024. Nevertheless, Buffett has voiced his concerns over US banking regulations. What’s more, a fall in profit and net income in its last update could be a source of concern.

Time to buy?

But Buffett doesn’t stress about short-term volatility. He’s in it for the long run. And so am I.

That said, I’d never blindly follow Buffett’s investments. That doesn’t make sense. We all have different goals and aims when it comes to investing and investors should do their own due diligence. Even so, I think these two stocks could be shrewd buys.

Apple is one of my largest holdings and was one of the first stocks that I purchased. I’m always looking to pick up more shares with any spare cash I have. I also like the look of BofA. If I had the cash, I’d consider buying.

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.

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Charlie Keough has positions in Apple. The Motley Fool UK has recommended 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.

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