Warren Buffett, commonly known as the Oracle of Omaha, is a familiar name to many when thinking of the financial world.

Of course, many mimic his portfolio moves.

One of his purchases in particular, Occidental Petroleum OXY, has gained widespread attention over the last year amid volatile energy prices.

And it seems that the Oracle of Omaha can’t stay away from the stock; Berkshire has been buying more OXY throughout May, now holding roughly 2.2 million shares, reflecting a 25% stake in the company.

In addition to OXY, two other stocks that the legendary investor has placed big bets on include Coca-Cola KO and Apple AAPL.

For those interested in investing like Buffett, let’s take a closer look at each.

Occidental Petroleum

Buffett’s been in the headlines numerous times over the last year regarding his OXY purchases. Still, it’s worth noting that the Oracle of Omaha said there were no plans to fully acquire the company at the latest annual shareholder meeting,

OXY posted lighter-than-expected results in its latest release amid falling energy prices, with the company falling short of the Zacks Consensus EPS Estimate by roughly 16% and posting a negative -3.7% revenue surprise.

Image Source: Zacks Investment Research

Of course, the favorable operating environment has allowed OXY to reward its shareholders nicely, growing its dividend payout by nearly 40% just over the last year. Berkshire owns roughly $10 billion of OXY preferred stock, which pays an 8% dividend yield.

Image Source: Zacks Investment Research

Apple

Buffett has stated many times that he’s attracted to the mega-cap giant due to a simple fact – brand loyalty. Apple consumers tend to trade old Apple products for new ones, establishing a loyal customer base.

The company posted solid results in its latest quarter; iPhone revenue totaled $51.3 billion, 4% above the Zacks Consensus Estimate and improving 1.5% from the year-ago period.

As we can see from the chart below, the better-than-expected iPhone results snapped a streak of back-to-back negative surprises.

Image Source: Zacks Investment Research

In addition, shares provide exposure to technology and provide income, with the company’s annual dividend currently yielding 0.5%. While the yield is undeniably on the lower end of the spectrum, Apple’s 6% five-year annualized dividend growth rate helps pick up the slack.

Image Source: Zacks Investment Research

Coca-Cola

Coca-Cola is an American multinational corporation best known for its flagship Coca-Cola beverage. It’s a long-term holding for Berkshire, having first purchased shares in the late 1980s.

The company continues to grow steadily, with earnings estimated to climb 5.3% on 4.7% higher revenues in its current fiscal year (FY23). The growth is forecasted to continue in FY24, with estimates indicating earnings and revenue growth of 7.5% and 5.2%, respectively.

Image Source: Zacks Investment Research

Coca-Cola’s annual dividend presently yields 3.1%, well above the Zacks Consumer Staples sector average. It’s also worth highlighting that KO is a member of the elite Dividend King club, showing an unparalleled commitment to shareholders through 50+ years of increased payouts.

Image Source: Zacks Investment Research

Bottom Line

Many mimic Buffett’s moves for understandable reasons.

And interestingly enough, the Oracle of Omaha has continued to purchase Occidental Petroleum OXY shares throughout May.

Two other stocks – Coca-Cola KO and Apple AAPL – also reflect sizable bets from the legendary investors.

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Recession fears sent the S&P 500 tumbling into a bear market last year, and the benchmark index is still down 12% from its high. But history says that drawdown is temporary. Every past bear market has eventually ended in a new bull market, and investors have no reason to expect a different outcome this time. That makes the current situation a buying opportunity, but not every fallen stock is worth buying.

Consider this investing advice from Warren Buffett.

Buy and hold high-quality stocks

Buffett once said, “All there is to investing is picking good stocks at good times and sticking with them as long as they remain good companies.” There are two important lessons there. First, valuation matters. A great business at the wrong price can be a terrible investment. Second, think long-term. Investors should ignore the day-to-day fluctuations in the market and instead focus on buying and holding good stocks.

But what qualifies as a good stock?

Invest in companies with a competitive advantage

In his 1995 letter to Berkshire Hathaway shareholders, Buffett wrote the following: “In business, I look for economic castles protected by unbreachable moats.” The term “moat” refers to a competitive advantage, the quality or qualities that protect a business from its competitors.

There are many different types of competitive advantages. Apple possesses immense brand authority that not only keeps consumers loyal, but also affords the company a great deal of pricing power. Amazon Web Services offers a broader and deeper suite of cloud computing products than any other cloud provider. Nvidia can design more performant graphics chips and data center accelerators than other semiconductor companies. Costco Wholesale derives significant purchasing power from its scale, and its operating expertise further enhances that purchasing power.

All of those stocks have crushed the S&P 500’s return over the past decade, and investors can attribute those market-beating performances to the fact that each company possesses a durable competitive advantage.

Buy stocks within your circle of competence

In his 1996 letter to Berkshire shareholders, Buffett wrote the following:

You don’t have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital.

Buffett expanded on that advice a few years later. In his 1999 letter to Berkshire shareholders, Buffett explained that he typically avoids investing in technology companies — despite knowing their products and services will transform the world — because he finds it difficult to identify competitive advantages in that sector. In other words, Buffett avoids technology stocks because they are beyond his circle of competence.

Think carefully before buying or selling a stock

Buffett once said, “An investor should act as though he [or she] had a lifetime decision card with just twenty punches on it.” Those words should not be taken literally — Berkshire owns far more than 20 stocks. Instead, Buffett is telling investors to think deeply about every decision. Never buy or sell a stock on a whim.

Knowledge can pay huge dividends

Buffett once said buying Benjamin Graham’s book, The Intelligent Investor, was the best investment he ever made (excluding two marriage licenses). Graham is viewed as the father of value investing, and his teachings formed the bedrock of Buffett’s investing style. The message here is simple: Never stop learning. An investment in knowledge can produce incredible returns.

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From time to time, celebrities purchase what amounts to a small sliver of an NFL team. When it comes to Tom Brady’s looming acquisition of a piece of the Raiders, one thing that hasn’t been leaked to ESPN or other media outlets is the percentage Brady will acquire.

So we started poking around a little. Per a source with general knowledge of the situation, Brady is believed to be buying something more than a ceremonial sliver of the Raiders.

It’s unclear why Raiders owner Mark Davis is selling any of the team to Brady. Usually, the controlling owner of an NFL team sells some equity to generate revenue. For most owners, there’s a strong preference to hold the equity for as long as possible, given that it constantly appreciates.

That’s why Brady would buy it. Having a piece of the Raiders makes a lot more sense than, for example, plunking cash into FTX.

Especially now.

So either Davis wants to take a little cash off the table, or he wants to be in business with Brady. Already, Brady has purchased a piece of the Las Vegas Aces, primarily owned by Davis.

Once Brady’s purchase of a portion of the Raiders is approved, he can always acquire more. If he ever hopes to succeed Davis, however, Brady will need to make a lot more money than he has.

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