Warren Buffett His time-tested methodology of investing in value stocks and holding for the long term has inspired generations of investors. The fact that he’s ranked in the top five billionaire list is a testament to his investment success. Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) is the company he has run since 1964.
what happened: But Buffett, dubbed the “Oracle of Omaha,” is very modest about his success. “In his 58 years of running Berkshire, most of my capital allocation decisions have been so-so,” the billionaire says in his annual letter to Berkshire shareholders.
Buffett said Berkshire was saved from facing the consequences of some bad bets by “very big luck”, citing that it escaped catastrophe with US airline stocks and bond trading firm Solomon stocks. He said he had been beaten.
Berkshire’s satisfactory performance over the years is due to “truly good decisions” every five years and a forgotten advantage that favors long-term investors, he said.
Reference: Best Value Investing Books
Secret sauce: Buffett also Coca-Cola Company unit and american express company AXP.
He noted that in 1994 Berkshire completed a seven-year purchase of 400 million shares of Coca-Cola, which it now owns for $1.3 billion. Cash dividends from the beverage giant continue to be regular and are growing each year, he said.
Speaking to American Express, Buffett pointed out that Berkshire’s acquisition of Amex was completed in 1995 for $1.3 billion. He expects dividends from financial services firms to continue to grow.
“Those dividend increases are welcome, but not spectacular. But they provide an important benefit to the stock price,” Buffett said.
At the end of 2022, Berkshire’s investments in Coca-Cola and Amex were valued at $25 billion and $22 billion, respectively, each representing about 5% of the company’s net worth.
“Lesson for investors: Weeds die as they bloom. As time goes on, it takes just a few winners to make miracles happen,” said the legendary investor.
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