These 4 Stocks Make Up 70% of Warren Buffett’s Portfolio

There’s little doubt that Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett is one of the greatest investors of all time. Since taking over as CEO in 1965, he’s created over $500 billion in value for shareholders and generated an average annual return for Berkshire Hathaway’s shares of 20%. That’s an aggregate return of more than 2,800,000%, through Dec. 31, 2020, for those of you keeping score at home.

With a track record like this, it shouldn’t surprise anyone that Wall Street and investors eagerly await the Oracle of Omaha’s 13F filings with the Securities and Exchange Commission. A 13F provides a quarterly snapshot of what Buffett and his investing team have been buying and selling.

After adjusting for Buffett’s buys and sells in the second quarter, one thing is plainly evident: The Oracle of Omaha doesn’t believe in diversification, if you know what you’re doing. Just four stocks in Berkshire Hathaway’s portfolio accounted for 70% of its $316 billion in invested assets, as of this past weekend.

Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.

Apple: 42.5% of invested assets ($134,491,280,983)

Innovation kingpin Apple (NASDAQ:AAPL) is often referred to by Warren Buffett as “Berkshire’s third business.” That statement makes even more sense when you realize that Berkshire’s stake in Apple is worth a jaw-dropping $134.5 billion and makes up a little over 42% of his company’s portfolio.

One reason Apple is such an overwhelmingly successful company is its branding. Every time a new product comes out, you’ll see brand loyalty kick in and customer lines wrap around its stores. According to a study from Visual Capitalist, Apple is the most valuable global brand, and no other company even comes close.

Apple is also benefiting immensely from the shift to 5G, as well as its ongoing push into subscription services. Over the past nine months, Apple has rung up $153.1 billion in iPhone sales, which is a whopping 38% improvement over iPhone sales in the comparable period a year ago. 

Service revenue also hit a record of $50.1 billion through nine months of fiscal 2021, representing a year-over-year increase of 28%. Since service revenue offers considerably higher and more consistent margins than product sales, Apple’s already insane operating cash flow should expand further in the years to come.

To round out this story, Apple delivers for its shareholders. Its dividend has grown by 132% since it was reinstated in 2012, and the company is averaging $15.7 billion in quarterly share buybacks over the past five years. It’s the perfect Buffett stock in every way.

Image source: Getty Images.

Bank of America: 13.2% of invested assets ($41,696,235,482)

Even though Apple is Berkshire’s unquestioned largest holding, Buffett’s favorite place to put his company’s money to work is bank stocks. And there’s no bank stock he fancies more than Bank of America (NYSE:BAC).

Generally speaking,…