For almost six decades, Berkshire Hathaway CEO Warren Buffett has been a towering figure in the financial world. Over this period, he has overseen the remarkable growth of his company into a trillion-dollar business and delivered jaw-dropping returns of over 5,600,000% for its Class A shares (BRK.A). This exceptional track record has cemented his position as one of the most revered investors of all time.
One of the key reasons behind Buffett’s enduring success is his willingness to share his investment philosophies with the world. He often emphasizes the importance of investing in businesses with strong moats, capable management teams, and robust capital-return programs.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
However, one less talked-about factor contributing to Buffett’s success is his strategy of portfolio concentration. Alongside his longtime partner, Charlie Munger, Buffett firmly believes in allocating more capital to their best investment ideas.
Despite holding stakes in 43 stocks and two index funds, a significant 67% ($210.4 billion) of Buffett’s $315 billion portfolio at Berkshire Hathaway is invested in just five unstoppable stocks.
Apple: $90.7 billion (28.8% of invested assets)
Despite recent sales of over 500 million shares of Apple (AAPL) since October 2023—potentially for tax purposes—Berkshire Hathaway’s largest holding remains this tech giant. While Apple is known for its iconic devices like the iPhone, its Services segment is poised for significant growth.
Buffett particularly appreciates Apple’s market-leading share repurchase program, with the company buying back over $700.6 billion of its own stock since 2013. These buybacks have significantly enhanced earnings per share and shareholder value.
Image source: Getty Images.
American Express: $41.8 billion (13.3% of invested assets)
American Express has been Berkshire Hathaway’s second-longest continuous holding since 1991. Its dual revenue streams as a credit card processor and lender have made it a standout performer over the years. The company’s ability to attract affluent customers has ensured stability even during economic downturns.
Bank of America: $31.9 billion (10.1% of invested assets)
Despite recent sales by Buffett, Bank of America remains one of Berkshire Hathaway’s top holdings. Bank stocks like BofA benefit from their cyclical ties to economic expansions, allowing them to grow loan portfolios steadily. Boasting a significant foothold in the rate-hiking cycle, Bank of America is well-positioned to capitalize on favorable interest rate changes.