Warren Buffett is the richest wealth manager in the world, with a net worth of over $115 billion. He ranked #5 on the world’s real-time billionaires list published by Forbes. Buffett is often considered a “guru” in the investment world, is known for his value investing strategies and often focuses on investing in large-cap equities rather than trading speculative stocks.
He believes in purchasing securities and holding them indefinitely, thereby reaping the benefits of compounding capital gains. While Buffett openly says that he has made many mistakes during his career, “over time, it takes just a few winners to work wonders.”
Buffett’s investment portfolio might seem small and concentrated in industry leaders, but it has delivered stellar returns over the past few decades, propelling his net worth substantially.
Some of the top holdings in Buffett’s Berkshire Hathaway follow.
Occidental Petroleum
Occidental Petroleum Corp. (NYSE:OXY) is one of Buffett’s top oil holdings. Though many countries have pledged to reduce their oil consumption in the interest of lowering total carbon emissions, recent geopolitical events reveal that the demand for oil is here to stay, at least in the short term.
While the COVID-19 pandemic was a major roadblock for the oil sector, industry leaders quickly recuperated to generate record profits last year. OXY’s annual gross profit amounted to $24.57 billion for fiscal year 2022, reflecting a 50.8% rise year-over-year. Buffett owns over 224 million shares of OXY, valued at approximately $13.18 billion, as of June 30, 2023.
Occidental Petroleum’s efforts to restructure its operations in light of the global pledge to reduce carbon emissions could make it a promising stock to buy and hold. The company currently pledges to achieve net-zero emissions in its operations and energy use by 2040 and total net-zero carbon inventory by 2050. To this end, OXY acquired Carbon Engineering in August 2023.
UBS currently has a price target of $74 on OXY stock, which reflects a potential upside of nearly 21%. On the other hand, New York-based Susquehanna International Group has a positive rating on Occidental Petroleum stock with a price target of $78. This reflects a potential upside of over 27%.
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Kraft Heinz
Kraft Heinz Co. (NASDAQ:KHC) is another one of Buffett’s favorite stocks. The company has been benefitting from rising commodity prices over the past couple of years, raising its profit guidance for fiscal 2023. It expects its organic net sales to rise within the range of 4%-6% year-over-year in fiscal 2023.
“We laid out a series of action plans in the beginning of the year to drive market share and volume improvement, and I’m pleased to say we saw improvement throughout the quarter as our team executed against these plans. We will remain focused on our overall strategy to drive top-line profitable growth,” said Miguel Patricio, CEO and Chair of Kraft Heinz.
While Buffett said in 2019 that he “overpaid” for Kraft Heinz, he believes it to be a “very, very strong” brand name. He currently holds over 325 million shares of KHC, which are valued at over $11.56 billion (as of June 2023).
Bank of America currently has a “Buy” rating on KHC with a price target of $40, reflecting a potential upside of 25%. Britain-based multinational financial institution Barclays holds an “Equal-Weight” rating on Kraft Heinz, with a price target of $36. This reflects a potential upside of up to 12.5%.
Coca-Cola
Coca-Cola Co. (NYSE:KO) is one of Buffett’s “secret sauce(s)” of his investment strategy, generating millions in passive income for his company, Berkshire Hathaway.
KO stock has delivered $704 million in dividend returns to Buffett’s company in 2022 and currently accounts for 5% of Berkshire Hathaway’s net worth. Apart from this, Buffett’s initial investment of $1.3 billion in Coca-Cola stock in 1994 is now valued at $25 billion (as of fiscal year 2022), reflecting over 1820% return on investment, not taking into account dividend returns.
While KO stock has delivered disappointing returns over the past year as it plunged by over 4% over the past year, its dividend returns compensate for poor share price performance. The stock currently pays $0.46 per share in dividends annually, yielding 3.26% on the current price.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
