It appears young Greg Abel, now at the helm of Berkshire Hathaway – a concern one might describe as rather substantial – has seen fit to issue his first annual missive to the shareholders. A tradition, you see, previously upheld by the venerable Mr. Buffett for a positively staggering six decades. Eighteen pages it ran to, a veritable tome detailing the company’s affairs, with a particular focus on the equities portfolio – a collection of shares amounting to something in the neighborhood of $318 billion, a sum that would make a lesser man positively giddy.
Abel, in a move that suggests a continuation of sound judgment, has highlighted four stocks that Berkshire holds dear. He describes them as businesses understood well, led by chaps he clearly approves of, and possessing the rather desirable quality of being likely to “compound over decades.” A most sensible aspiration, wouldn’t you agree? He also hinted, in a manner that was blessedly free of the usual financial jargon, that Berkshire isn’t planning any hasty exits from these positions. A refreshing change, as one often finds investment strategies resembling a particularly frantic game of musical chairs.
Let us, then, investigate these four fortunate companies, shall we?
Apple – A Most Considerable Slice (18.9% of portfolio)
First on the list, and occupying a rather commanding position, is Apple, the purveyor of those ubiquitous devices that seem to have captured the affections of absolutely everyone. It was, at one point, a full 40% of Berkshire’s holdings – a truly astonishing figure! The story goes that Mr. Buffett’s interest was piqued when a friend became quite distraught over a misplaced iPhone. A perfectly understandable reaction, of course.
Some eyebrows were raised, naturally, when Abel included Apple, given that Berkshire has recently trimmed its stake. But, as Mr. Buffett himself observed, Berkshire doesn’t typically sell positions, merely reduces them until the time is ripe for a complete departure. Apple, it seems, is a bit of an exception. A rather large exception, considering the sums involved and the recent performance of the tech sector. A dash of profit-taking is understandable, even for the most steadfast investor.
There’s been some chatter about Apple’s AI strategy, or lack thereof. But, as Berkshire seems to appreciate, a conservative approach has its merits. They’ve also been rather diligent in buying back stock, a practice that Mr. Buffett has always held in high regard. A sensible course of action, wouldn’t you say?
American Express – A Constant Companion (14.7%)
Next, we have American Express, a company that has been a fixture in Berkshire’s portfolio for longer than most of us have been alive. Mr. Buffett first acquired a stake back in 1964, when the company was facing a spot of bother, and added significantly to it in the 1990s. During the recent unpleasantness, he described the AmEx brand as “special” and urged them to protect it at all costs. A wise observation, indeed.
How many companies, after all, can charge nearly $900 a year for a platinum card? American Express isn’t merely a lender; it’s a purveyor of prestige. They attract a clientele who are, shall we say, less likely to be ruffled by a downturn.
But the real secret, you see, is their closed-loop payment network. It facilitates transactions between merchants and customers with admirable efficiency, generating a steady stream of revenue. Investors adore these networks, as they take time to build and create a formidable barrier to entry. And, of course, they buy back a considerable amount of stock, which has done wonders for earnings over the years.
Coca-Cola – A Timeless Elixir (10.2%)
Then there’s Coca-Cola, another Berkshire stalwart, and a prime example of a defensive consumer staple. Berkshire, you see, likes to think long-term, investing in companies they can hold indefinitely. Coca-Cola isn’t a fast-growing AI marvel, but it possesses advantages all its own.
It’s a company that will endure, you see, because AI can’t replicate a fizzy beverage – at least, not yet. AI may play a role in the production process, naturally, but the core product remains stubbornly analog. The stock is up over 17% this year, which is hardly surprising. That’s the beauty of defensive stocks – they provide a bit of ballast when the economic seas become choppy.
Coca-Cola is also a Dividend King, having paid and increased its annual dividend for at least 50 years. In fact, they’ve managed this feat for a remarkable 63 years. And, despite the recent surge in share price, the dividend yield remains a respectable 2.6%.
Moody’s – A Quiet Achiever (3.7%)
Finally, we have Moody’s, the financial services and ratings company. It may have come as a surprise to some to see it on Abel’s exclusive list, but Berkshire first acquired a stake back in 2000, and it remains the eighth-largest holding in their portfolio.
Moody’s, you see, provides ratings on companies’ debt, which are essential for determining risk and pricing. Virtually anyone raising capital requires a rating. Moody’s, along with a couple of competitors, controls about 95% of this market, which is also heavily regulated – a characteristic that tends to discourage unwanted competition.
They also have a growing data and analytics business, providing tools for critical decision-making. AI may disrupt this sector, naturally, but Moody’s has a deep foothold and is likely to adapt and leverage AI to its advantage. A sensible approach, wouldn’t you say?
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2026-03-07 21:53