There's an old adage that "hindsight is 20/20." Of course it is! Most people can look back and see clearly what worked and what didn't. Foresight, on the other hand, is hard. Really, really hard.
If you asked me which Warren Buffett stocks have been the biggest winners so far this year or over the past three years, I could easily give you an accurate answer. However, I would find it very challenging to tell you which stocks in Berkshire Hathaway's (BRK.A 1.18%) (BRK.B 1.30%) portfolio will be the biggest winners going forward.
I point this out because I'm about to step out on a limb. Admittedly, I don't know for sure which Buffett stocks will deliver the greatest gains. However, I can make some educated guesses. Here are my predictions for the Buffett stocks that will be the biggest winners over this decade.
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1. Chevron
One key to predicting the future is to look at the past and present. As Mark Twain is often credited with saying, "History doesn't repeat itself, but it often rhymes." This mindset leads me to pick Chevron (CVX 1.54%) as the likely best-performing Buffett stock this decade. (By the way, I'm using the purist's definition of this decade as beginning on Jan. 1, 2021 and ending on Dec. 31, 2030.)
The oil and gas giant already ranks as one of Buffett's best stocks so far in 2022. Chevron's shares have skyrocketed with increased demand for oil and gas, accompanied by significantly higher prices. The stock also delivered an impressive return in 2021.
I think that Chevron's early momentum gives it a formidable head start over the other stocks owned by Berkshire. Remember, too, that Chevron pays a solid dividend that currently yields over 3.2%. Reinvesting those dividends will boost the total returns.
In my view, too many investors wrote off oil and gas stocks a few years ago. Even with the transition to renewable energy sources, there's likely to be sustained (and even growing) demand for fossil fuels for years to come. Chevron should benefit from this, as well as from its own recent moves into clean energy.
2. Markel
My hunch is that one of Buffett's newest additions could also rank as a big winner this decade. Markel (MKL 1.43%) is a lot like Berkshire Hathaway. It focuses on the insurance business (in this case, specialty insurance). It also invests in the stocks of other publicly traded companies.
Unlike many of the stocks that Berkshire owns, Markel is trouncing the S&P 500 this year. Wall Street analysts are quite optimistic about the company's future prospects, as well. The average forecast for analysts surveyed by Refinitiv projects annual earnings growth of nearly 47% over the next five years.
I fully expect Markel to continue to deliver solid growth from its specialty insurance business. The company knows this market inside and out. Its underwriting strategy sets Markel apart from the competition.
I also think that Markel's investments will perform well over the rest of the decade. That might sound crazy right now, considering the dismal status of the stock market. However, Markel owns shares of many strong businesses (including Berkshire, its biggest holding). Over time, the stock prices will reflect this underlying strength.
3. Apple
If you asked Warren Buffett what his favorite stock is in Berkshire's portfolio, he'd probably answer that it's Apple (AAPL -1.22%). The technology giant is by far the largest position among Berkshire's holdings.
Granted, Apple isn't faring so well in the current volatile market. Some are concerned that the company's services revenue could be weak over the short term. My prediction, though, is that Apple will roar back in the coming years.
I expect the introduction of new features and the increased adoption of 5G will boost iPhone sales throughout this decade. In particular, my hunch is that the rumored launch of a folding iPhone in the not-too-distant future could provide a huge catalyst.
I'm also optimistic about Apple's augmented reality (AR) and virtual reality (VR) strategy. The company reportedly has an AR/VR headset and AR smart glasses on the way.
