For as long as most of us can remember, Warren Buffett has been widely acknowledged as one of the best investors around. In times like these, it's easy to see why. The global economy has thrown everything imaginable at Berkshire Hathaway (BRK.A -0.45%) (BRK.B -0.62%) since he acquired the company in 1965, and it's still beating the market.
By turning that defunct textile mill into a holding company that invests in other businesses, he created an enterprise whose shares have appreciated at a compound annual rate of 19.7% over the past 57 years. Other investors and fund managers have put up better numbers for shorter periods, but nobody has outperformed Buffett consistently.
He famously tells anyone who will listen that he would rather buy a great business at a fair price than a mediocre business at a great price. These Buffett stocks are trading at prices that are more than fair right now, and patient investors who scoop them up have a good chance of beating the market in the years ahead.
Owning shares of Chevron (CVX -0.55%), an integrated oil and natural gas company, could help you feel better about the prices you're paying at the pump. The high cost of oil will make 2022 a banner year for the energy company, but that alone doesn't make it a no-brainer stock to buy now.
Investors of all stripes want to put some Chevron stock in their portfolios now because this diversified business would still make money even if oil falls to just $50 a barrel. West Texas Intermediate crude was trading in the neighborhood of $105 per barrel on Friday, so the company's raking in cash with both hands.
We don't know when oil prices will fall again, but they will, because that's what commodities do. When it happens, though, Chevron's refineries will benefit from lower input costs, and that will keep the ship afloat.
Chevron shareholders who are also concerned about the environment will be glad to know a greener future won't be the worst thing that could happen to the company. In June, it acquired Renewable Energy Group, giving it a new way to participate in the world's long transition toward low-carbon energy sources.
Its diversification strategy has worked out well so far. It has been 35 years since this company went an entire year without raising its dividend payout at least once. At recent share prices, Chevron's payout yields 4% -- distributions that investors get to keep even if the overall stock market continues its downward slide.
It's been about 28 years since Amazon (AMZN -4.03%) started selling books online out of Jeff Bezos' garage. Its market value has already soared past $1 trillion, and it could go much higher for many reasons that all come down to a single broad theme: Amazon is terrific at turning challenges into opportunities.
In the 1990s, warehousing lots of books set the company up to store and sell just about every type of product its merchant partners can fit into a box. Managing data centers to keep its e-commerce operations humming along could have become a never-ending expense. Instead, Amazon leaned into internet infrastructure and started making its extra capacity accessible to customers for a fee in 2006. Now, Amazon Web Services is the company's most profitable segment and the world's largest cloud services business.
Amazon's stock price has fallen by about 30% in 2022 because the company posted a net loss in the first quarter. The loss happened because the company invested heavily into fulfillment services to meet surging demand driven by COVID-19 lockdowns and social distancing. Now that people are returning to their pre-pandemic behaviors, some of that added demand has subsided.
Doubling the size of its fulfillment network in just a couple of years may have led to its recent net losses, but given the long-term trend away from traditional retail and toward e-commerce, this problem should eventually work itself out. Amazon has more than one path to success in the coming years, so its stock could deliver outstanding gains to patient investors who pick up shares now.