The tale of legendary investor Warren Buffett needs no introduction. Starting with just a small sum, the ‘Oracle of Omaha’ has amassed a fortune of over $100bn in his eight decades of stock market investing.

During his time as Berkshire Hathaway CEO, he’s generated an average annual return of around 20% for shareholders, double that of the S&P 500.

With his conglomerate experiencing this success, I think it’s time I tried to steal some of Buffett’s wisdom in an attempt to replicate it for my own portfolio.

With that, here are two Berkshire holdings I’d buy today if I had the cash.

Apple

First up is Apple (NASDAQ:AAPL). The business has become one of the best-known brands on the planet.

So it’s no surprise that Buffett labels it as one of his best investments, being the backbone of Berkshire’s equity portfolio.

Key to Buffett’s investing strategy is to buy companies you know and understand. And this certainly resonates with Apple.

With over one billion people using its products, it’s easy to see the value of the business.

While far from monumental in size, Apple stock also provides investors with a dividend yield of around 0.5%. For Buffett and his 915m shares, this equated to a payout of nearly $900m last year!

On top of this, the firm has put greater emphasis on creating more value for shareholders. As flagged in its latest results, Q3 saw it return over $24bn to investors.

I also like the moves the business is taking away from its core products. Q3 saw its Services sector report record revenue, including over 1bn paid subscriptions. Earlier this year, Apple also announced the launch of its VR headset, priced at $3,499.

The largest threat to Apple is clearly inflation. As well as rising costs, racing inflation could deter consumers from splashing out on its products and services.

Yet with its market grip and renowned brand recognition, I think Apple is a smart long-term play.

Bank of America

The second stock is Bank of America (NYSE:BAC). There’s been quite a bit of uncertainty across the financial sector this year. And events such as the collapse of Silicon Valley Bank have spooked investors.

However, like Buffett, I buy for the long haul, so I see a host of opportunities within the sector right now, including Bank of America.

The stock takes up slightly less room in Berkshire’s portfolio, but there are still ample reasons to like it. Firstly, it looks cheap. As I write, it trades on a price-to-earnings ratio of below 9. Secondly, it has a dividend yield of over 3%.

On top of this, the bank also posted a strong set of Q2 results, including a 19% jump in net income and a 21% rise in its earnings per share.

Further, it’s benefited from rising interest rates, with net interest income rising 14%.

Given the current economic environment, Bank of America remains constantly under pressure. This has been seen recently as customers demand higher saving rates, in turn potentially impacting the firm’s net interest margin. The lingering threat of recession is also bad news for the bank.

However, with a low valuation and appealing yield, I deem the stock a long-term winner.

The post Warren Buffett owns these 2 stocks. I’d buy them today appeared first on The Twelfth Magpie.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Charlie Keough has positions in Apple. The Motley Fool UK has recommended Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Warren Buffett is a legendary investor with countless aphorisms to his name. My favourite is: “Time is the friend of the wonderful company, the enemy of the mediocre.” In that spirit, let’s explore Warren Buffett’s portfolio and see if his top two stock holdings are good long-term buys for me.  

Apple 

According to Berkshire Hathaway‘s (NYSE: BRK-A) SEC filing, Warren Buffett’s largest holding is Apple (NASDAQ: AAPL). Via Berkshire, Buffett owns 5.55% of the US tech giant’s total shares — a whopping 43% of his equity portfolio. Buffett began building a stake in Apple in 2016 and in his annual letter to Berkshire shareholders he praised CEO Tim Cook for Apple’s share repurchase strategy. 

One factor behind Buffett’s bullishness is the iPhone maker’s competitive advantage. Apple’s ecosystem is created by establishing market standards, encouraging developers to build apps tailored specifically to Apple smartphones. This produces a virtuous cycle, making Apple products indispensable. 

Nonetheless, Apple supplier Foxconn recently suspended its Shenzhen production due to a Covid-19 outbreak in the region. The Apple share price is still high for me, despite being down almost 14% on a three-month basis. Currently, I’m reluctant to deploy a significant amount of my cash reserves buying Apple in one go.

Indeed, Warren Buffett bought his position at an average cost of a quarter of today’s price. I will be buying steadily over the coming months to capitalise on any further dips in Apple’s share price. 

Bank of America 

At over 13% of Berkshire’s holdings, Bank of America (NYSE: BAC) is the second-largest constituent of Warren Buffett’s portfolio. The stock’s P/E ratio of 11.63 fits with Buffett’s value investing philosophy. Shareholders also benefit from a handy dividend yield of over 2%.

The Federal Reserve is tipped to hike interest rates in 2022. Bank of America should benefit from these macroeconomic conditions. Moreover, with a total net income of $32m for 2021, the bank is well placed to build on strong fundamentals this financial year. 

The stock currently sits almost 20% below its 52-week high in mid-February. Furthermore, the US economy is flashing recession warning signs. Bank of America shares could face further pain, given the bank services around 67 million consumer and small business clients stateside.

Despite these risks, I see Bank of America’s current share price as an attractive entry point to add this Warren Buffett stock to my portfolio. 

Another way to invest like Warren Buffett 

Perhaps the easiest way to mirror Warren Buffett’s investments is buying Berkshire Hathaway shares. The company’s compounded annual gain of 3,641,613% dwarfs the 30,209% gain for the S&P 500 from 1964 to 2021. For me, Berkshire stock carries some of the diversification benefits of an index fund while providing an opportunity to beat the market. 

Investors may worry about Buffett’s age at 91 while Vice-Chairman, Charlie Munger, is 97. Berkshire Hathaway’s share price performance without the duo at the helm is untested. This doesn’t dissuade me from owning the stock, however. I see the potential for future leadership to emulate Buffett’s investing approach beyond his lifetime. 

Berkshire currently has over $145bn in cash on its balance sheet and insurance is a large part of its business. A useful reminder for me that, with share valuations riding high, cash is king for scooping up bargains in the event of a stock market crash. 

The post 2 stocks make up over 50% of Warren Buffett’s portfolio. Should I buy them? appeared first on The Twelfth Magpie.

More reading

• 7 easy Warren Buffett tips to retire richer
• Here’s how saving £3 a day could lead to an £11,925 yearly passive income

Charlie Carman owns shares in Berkshire Hathaway. Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool UK has recommended Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.