Warren Buffett doesn't always beat the market. But he didn't become one of the wealthiest people in the world and earn the nickname "the Oracle of Omaha" by being a loser too often.
Investors don't have to scratch their heads in consternation about how Buffett makes his money. His stock picks (and those of his lieutenants) are laid out for all to see at least once per quarter with Berkshire Hathaway's (NYSE:BRK.A) (NYSE:BRK.B) regulatory filings.
Which of these picks are likely to be the biggest winners over the long term? Here are three no-brainer Buffett stocks to buy right now.
I think the easiest call to make is buying shares of Berkshire Hathaway itself. Investing in Berkshire puts you in perfect alignment with Buffett. After all, most of the billionaire's net worth comes from his stake in the huge conglomerate.
It's perhaps telling that the one stock that Berkshire Hathaway is investing in the most is... Berkshire Hathaway. The company bought back $24.7 billion of its shares in 2020. Berkshire has kept the buybacks coming so far this year.
Aside from Berkshire ranking as Buffett's favorite stock, I think there are at least two other key reasons why it's a smart pick right now. First, many of Berkshire's businesses are in a great position to benefit as the global economy recovers from the COVID-19 pandemic. Second, the company sits on a massive cash stockpile that it could use to acquire one or more businesses to fuel additional long-term growth.
Granted, Buffett is quite picky about what deals he makes. There's no guarantee that Berkshire will use its cash for an acquisition in the near future. If it doesn't do so, though, it's likely that we'll see more share repurchases. Either way, investors should win.
Of all the stocks that Buffett owns other than Berkshire, Apple (NASDAQ:AAPL) is his favorite. The tech giant is easily the largest position in Berkshire's equity portfolio. Buffett has even referred to Apple as Berkshire's "third-largest business" trailing behind its fully owned insurance and railroad businesses.
Apple continues to be a huge winner for Buffett, hitting an all-time high last week. I think the stock will move even higher -- both over the short term and the long term.
The short term for Apple looks great because of the demand for 5G-enabled iPhones. The more iPhones that the company sells, the more revenue that it also generates from related products and services such as AirPods and the App Store.
Over the long term, Apple should be able to keep up its momentum through innovation. The company is already building out impressive augmented reality capabilities. It's expected to launch a foldable iPhone within the next couple of years. There are also rumors about an Apple electric car in development.
You might argue that Amazon.com (NASDAQ:AMZN) isn't technically a Buffett stock. The legendary investor acknowledged in 2019 that another Berkshire investment manager actually made the call to buy Amazon. However, Buffett has also admitted in the past that he "blew it" by not buying Amazon sooner.
I view Amazon as a no-brainer stock to buy for long-term investors. Why? One key reason is Amazon's moat. Buffett is a big fan of moats. In fact, he's said that "the most important thing [is] trying to find a business with a wide and long-lasting moat around it."
Amazon reigns as the biggest e-commerce company in the world. Sure, rivals might chip away in niche markets or hold their own in specific geographical regions. But Amazon's scale gives it a big advantage. And while other big tech companies are gaining ground in cloud hosting, Amazon Web Services is still by far the market leader.
Just as important, though, is Amazon's optionality -- its multiple paths to growth. The company has expanded into the grocery market, the pharmacy market, and is now moving into telehealth. I fully expect that Amazon will find even more markets to enter over the coming years, rewarding shareholders along the way.