Where Warren Buffett Thinks You Should Put Your Money

Warren Buffett has had incredible success by buying nearly 10% of Coca-Cola through Berkshire Hathaway, and one of the reasons behind his success is surprisingly simple.

Jul 20, 2014 at 11:13AM

Buffett Coca Cola
Source: Coca-Cola Stories. 

Warren Buffett is one of the best known, and most successful investors on the planet. But he admits how he determines where he should put his money is a "pretty simple," process.

One of the best known investments Buffett has made through Berkshire Hathaway is in Coca-Cola (NYSE:KO) which he first began buying in 1988 and stopped 20 years ago in 1994. By then he had more than quadrupled the value of his $1.3 billion investment. And it has only continued to skyrocket over the last 20 years:

Source: Company Investor Relations. 

As shown above, when you consider just the value of the investment itself -- which excludes dividends paid each and every quarter -- Berkshire Hathaway has had an astounding gain of more than $16 billion.

So how has Buffett made such remarkable money through an investment Coca-Cola?

As he explains in the video below, his decision to invest extended well beyond the value of the company on its financial statements. He looked at the product it provided, its brand, its leadership, and much more. Although it wasn't necessarily complicated, it was absolutely thorough, as he gauged its future income potential relative to its price.

Buffett wants us to see "the important thing is to be in the right business with the right people," so long as long as, "you don't go crazy in terms of what you paid for it."

At times, we think we should only be concerned about the underlying numbers of a company. And at other times, we only think about its broader business prospects. But we must see -- as Buffett did -- the key consideration is a balance of both.

Warren Buffett: This new technology is a "real threat"
Buffett has had incredible success through the years through investments like Coca-Cola, but at the recent Berkshire Hathaway annual meeting, he admitted this emerging technology is threatening his biggest cash-cow. While Warren Buffett shakes in his billionaire-boots, only a few investors are embracing this new market which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

Patrick Morris owns shares of Berkshire Hathaway and Coca-Cola. The Motley Fool recommends Berkshire Hathaway and Coca-Cola. The Motley Fool owns shares of Berkshire Hathaway and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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