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Oracle of Omaha: The Five Best Investments of Warren Buffett
Aug 15, 2022
Stock101
Widely considered one of the world’s greatest investors, Warren Edward Buffett is a force to reckon with in value investing. Popularly referred to as the “Oracle of Omaha,” he has a net worth of $124.9 billion and ranks as the fifth richest man of 2022.
Born in Omaha in 1930, Warren was fortunate to have had a business background. His father, Howard, a business investor and a former congressman played a crucial role in his success. Warren’s passion for business started in his youthful days. At seven, he had his first business idea. During the hot summers, he sold soft drinks around the neighborhood to people who wanted to cool off.
Warren Buffett is the chairman and CEO of the American multinational company, Berkshire Hathaway. It is a “widely followed” company on Wall Street with over 60 companies holdings. When Warren first bought shares in the company in 1962, it was just a dying textile manufacturing firm. However, by 1965, he had bought enough to take over the company. From a failing company, Warren dramatically transformed Berkshire Hathaway. Presently, the company has a market cap of over $492 billion.
The oracle of Omaha is known for seeing the value in dying businesses with room left for growth. Besides his genius business mindset, he is also a philanthropist in several charitable causes. Asides from Berkshire Hathaway, below are some of the most significant investments he has made:
The Coca-Cola Company
The Coca-Cola Company is arguably the most famous beverage company in the world. They produce, retail, and sell non-alcoholic and alcoholic beverage concentrates. Founded in 1892 by Asa Griggs Candler, its famous Cola drink is widely consumed worldwide. Coca-Cola is valued at over $265 billion.
Coca-Cola is one of Warren Buffet’s top-paying dividend stocks. In 1988, Warren spent $1 billion to acquire 6.2% of Coca-Cola at $42.70. Since then, his percentage owned has grown to about 10% of the company, worth $22 billion. When Warren bought the shares, many investors feared investing because of the ‘Black Monday crash’ of 1987. Since then, his percentage gained on the Coca-Cola stock is an impressive 1800%.
Apple
Apple is a technology company that manufactures gadgets, ranging from laptops to phones, smartwatches, and other online products. Steve Jobs, Steve Wozniak, and Ronald Wayne found Apple in 1976.
Today, Apple is one of America’s big five information technology companies. The company briefly hit a $3 trillion market cap, which is now worth about $178.4 per share.
Warren Buffett prefers avoiding tech shares. However, He defied that principle when he bought 10 million Apple shares for $36 billion in 2016. Presently, he owns about 5.44% of Apple, and his percentage gained is almost 400%, with a stock worth more than $120 billion.
Bank of America
The Bank of America is a financial service holding company and a multinational investment bank. Known for being revolutionaries in digital technology banking, they are one of the biggest and most successful banks in the United States. Bank of America is currently valued at about #323.72 billion.
The Bank of America is Warren’s largest bank stock. It is Berkshire Hathaway’s most valuable holding after Apple. With an initial investment of $5 billion, Berkshire Hathaway started buying the Bank of America stock in August 2011.
Currently, they control a 12.34% stake in the company. They own 1.01 billion shares worth about $45.09 billion.
The American Express
The American Express Company is a company that specializes in card payment services. In addition, they are involved in online payment services and personal savings, gift card rewards, and insurance.
Henry Wells, William Fargo, and John Butterfield founded the American Express in 1850 as a postal service. The company has a net worth of $142.11 billion.
Warren made his first purchase of the shares in 1963 and has bought more over the years. When the company faced a significant financial crisis in 2008, Warren Buffett played an instrumental role in the recovery.
Berkshire Hathaway owns about 152 million shares worth about $27 billion. He has also made about 20 times his investment, excluding dividends and 1763% gain.
General Motors Company
General Motors is an American-based automobile company that designs, manufactures, and sells cars. They are the largest automobile manufacturing company in the US and worldwide. The company is worth $150 billion.
In 2012, Berkshire Hathaway invested $290 million to purchase General Motors stock worth 10 million. Currently, they own 67 million shares of the stock which amounts to a $3.6 billion stake in the company. Although Warren Buffett is not so technology inclined, he is optimistic about the future of GM’s electric cars to be released in 2025.
Conclusion
The ‘Oracle of Omaha’ title is a befitting title for one of the greatest investors of all time. The Warren Buffett way of investing is renowned for its innovative risk-taking and ability to cite companies with profit-making potential. Despite his great accomplishment, he is conservative in spending. This is because he turns in most of his profits for further investment.
Before he made his first million at 30, Warren had always been investment-minded. In 1942, he bought his first stock at 11. He bought three shares of Cities service for himself and his big sister. By 14, he had begun paying taxes. Many big stock investors like Peter Lynch have attributed their success to the lessons from Warren Buffet. Warren Buffett has some books on stocks under his belt. A good recommendation is ‘The Essays of Warren Buffet: Lessons for Investors and Managers.
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Barnabas is an adept stock market writer passionate about helping the average person see opportunities in the stock market, understand them, and make the most of them.
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