Billionaire Warren Buffett and his company, Berkshire Hathaway (BRK.A 0.27%)(BRK.B 0.45%), have achieved the type of long-term success that has made them famous among both professional and retail investors.
People mine investing advice from the company's annual shareholder letters while studying the changes to its more than $300 billion equity portfolio to get a sense of how Buffett and his team are feeling about the market.
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For the third quarter, Berkshire Hathaway reported 46 holdings, but its portfolio is quite top heavy. Below are its top five largest holdings:
| Company | Number of Shares Owned | Percentage of Berkshire Hathaway's Portfolio |
|---|---|---|
| Apple | 238,212,764 | 21.2% |
| American Express | 151,610,700 | 17.7% |
| Bank of America | 568,070,012 | 9.7% |
| Coca-Cola | 400,000,000 | 9.4% |
| Chevron | 122,064,792 | 5.9% |
Source: Berkshire Hathaway 13F filing.
This isn't exactly a model for diversification with five stocks accounting for nearly 64% of the portfolio. However, this strategy works for Berkshire Hathaway because it has dedicated teams of professional investors committed to managing the company's holdings and their risk. This is nothing like the situation an individual investor faces, which is why Buffett has long said the best investment the average investor can make is an S&P 500 index fund.
NYSE: BRK.B
Key Data Points
That said, all five of the above companies are well-established blue-chip stocks. They will inevitably hit rough spots (as is the case for any company), but you can count on them being industry leaders for quite some time. While I wouldn't suggest anyone blindly follow Buffett into these stocks, I would feel comfortable holding all five names in my own portfolio.
