Don't underestimate the power of Berkshire Hathaway's (BRK.A -0.34%) (BRK.B -0.01%) 13F-HR filing to the U.S. Securities and Exchange Commission (SEC). The SEC requires the company to disclose all of the stocks that it owns on a quarterly basis.
In a real sense, Berkshire's 13F-HR provides a peek into what Warren Buffett is thinking. The filing shows which stocks the Oracle of Omaha especially likes. Considering that Buffett ranks as one of the greatest investors of all time, that could be really useful information for investors who aren't legends.
Which stock in Berkshire's portfolio (excluding Berkshire Hathaway itself) is the best pick for ordinary investors right now? Different people will likely have different answers. However, if I could buy only one Buffett stock, though, this would be it.
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Honorable mentions
Before I get to my favorite Buffett stock, though, allow me to first acknowledge several honorable mentions. Berkshire's portfolio includes quite a few really great stocks to own.
Apple (AAPL 0.64%) ranks as the biggest holding for Berkshire. It also happens to be the biggest position in my own portfolio -- primarily because I've owned it for a long time and it's performed very well. I continue to view Apple as an excellent pick.
My take is that Amazon.com (AMZN 1.30%) also stands out as a top stock to buy right now. This technically wasn't a Buffett pick, since one of Berkshire's two investment managers made the call to buy Amazon a few years ago. Regardless, Amazon appears to be a bargain. It's one of the stocks in my portfolio that I'd seriously consider adding to my position.
Buffett is betting big-time on Chevron (CVX 0.57%) these days. Although I don't personally own the stock, I think that the oil and gas giant should continue to deliver solid returns thanks to highly favorable market dynamics.
I also own shares of two other Berkshire holdings -- Bank of America (BAC 1.70%) and Mastercard (MA 1.33%). My prediction is that both stocks will perform well over the long term.
Why I especially like one Buffett stock
While I think highly of all of the aforementioned stocks, there's another Buffett stock that I especially like. And it's a recent addition to Berkshire's portfolio -- Markel (MKL 0.56%).
Buying Markel is arguably the next best thing to buying Berkshire itself. In fact, Markel is sometimes referred to as a "baby Berkshire." There are a couple of key similarities between the two companies.
For one thing, both are in the insurance business. While Berkshire has GEICO, General Re, and a handful of other businesses that mainly focus on the standard insurance market, Markel offers specialty insurance and reinsurance. It provides coverage to customers who usually can't obtain standard insurance.
But it's the second common denominator between Markel and Berkshire that puts the stock in my top spot. Both companies use the cash generated by their insurance businesses to work by investing in other publicly traded companies. In a way, buying shares of Markel or Berkshire is almost like investing in an exchange-traded fund (ETF) that owns lots of stocks.
Diversification is very important to me. As much as I like Apple, Amazon, and the other stocks mentioned earlier, they don't offer the diversification that Markel does. Actually, buying shares of Markel provides a way to also invest in Apple, Amazon, Mastercard, Berkshire itself, and lots of other great stocks because they're all in Markel's portfolio.
Not perfect
Markel isn't a perfect stock. Its performance lags well behind all of the previously mentioned stocks and the S&P 500 over the past five years.
Some investors might also shy away from Markel's price. Shares currently trade at nearly $1,400. Markel has never conducted a stock split to make its share price more affordable for retail investors.
However, Markel is faring quite well so far in 2022. It's trouncing the S&P as well as all of the other stocks I've mentioned except Chevron.
Markel is also valued attractively with a forward earnings multiple below 18. That's especially appealing considering the company's strong growth prospects. If I could only buy one Buffett stock, the combination of the valuation and diversification that Markel offers makes this stock close enough to perfect for me.
