Invest like Warren Buffet
Hey, wait a minute? I have an idea.Since everyone is saying that the greatest investor in the world is Warren Buffet, then all I need to do is to copy what he is buying and I should be making as much as he did. Right?
Well, the reason why he became as rich as he did is that he bought these great companies at a "fair price", using the term introduced by his partner Charlie Munger, when the general public is still unsure how great these companies are. The only exception to this rule is probably Apple (people started flocking to Apple when Steve Jobs introduced the iPod). But it is likely to be correct that if we follow his pattern of stocks, then we are off to a good start.
Top pick from Warren's Portfolio
So what is Warren Buffet's top picks, or does he even has one? Turns out, the except for this large holdings in Vanguards S&P500 ETF (I talked about this in my other post), approximately 80% of his total 44 stocks are in just 8 stocks:
- Apple - $150B
- Bank of America - $40.5B
- American Express - $37B
- Coca Cola - $25B
- Chevron - $20B
- Occidental Petroleum - $15.7B
- Kraft Heinz - $11.7B
- Moody's - $10B
The pattern looks simple...
Except for Apple (technology) which forms a huge bulk of the portfolio, the rest are in Finance (BoA, Amex, Moody's), consumer products (Coke and Kraft), and oil companies (Chevron and Oxy).
Assuming that we wish to take the next step (after putting in a certain amount in the S&P500 ETF), and we have some money that we can afford to lose, the obvious picks will be either investing in the same stocks or we put into the group of stocks (known as mutual funds) that comprises the following:
- Technology stocks - Apple, Alphabet, Facebook (Meta), etc.
- Financial and Banks - Citigroup, DBS, JP Morgan, etc.
- Consumer goods - J&J, P&G, Nestle, etc.
- Oil - Shell, Exxon, etc.
Happy Investing!