Warren Buffett famously said his “favourite holding period is forever.” I’m looking at two stocks that have been permanent features in the portfolio of his company Berkshire Hathaway through three major stock market crashes. He’s held them at least through the early 2000s dotcom bubble, the 2008 Global Financial Crisis, and the 2020 Covid-19 recession.

Let’s explore whether I’d buy these Warren Buffett stocks today.

Coca-Cola — Warren Buffett’s oldest stock position

Warren Buffett first bought Coca-Cola (NYSE: KO) stock in 1988. Accordingly, the soft drinks manufacturer was actually a stalwart of Buffett’s portfolio even before the relatively mild US recession in the early 1990s.

Berkshire acquired 400m Coca-Cola shares at around $3.25 per share. It’s never sold a single one. The Coca-Cola share price is now over $65, meaning the holding is valued in excess of $26bn today — a stunning unrealised gain of over 2,000%. On top of that, Warren Buffett (or at least, Berkshire Hathaway) earns an annual dividend yield above 50% on his initial investment.

Today, Coca-Cola’s in good financial shape. Net revenues grew 17% in 2021, operating income was up 15% and cash flow increased 28%. Moreover, the company continues to innovate with a new product range for 2022, including Coca-Cola with Coffee Mocha.

Based on consensus forecasts, the stock is arguably pricey at present, trading at 27x current year earnings. Nevertheless, I think there’s still value in this high-margin, cash-generative business that has increased its dividend regularly for the past 59 years.

American Express — Berkshire’s third-largest stock holding

Warren Buffett first invested in American Express (NYSE: AXP) back in 1963, when it was a young company mired in scandal, but began building the stake he owns today in 1993. Currently, the billionaire holds 151.6m shares, worth $29bn in total.

The American Express share price is up nearly 22% over 12 months. Last year, revenue grew 17% and total cardholder spending rose 25%. Additionally, AmEx recently raised its dividend by 20% to $0.52 per share.

Looking ahead, American Express stock should benefit from a continued recovery in the travel sector. Travel consultancy and associated card rewards have been historically important revenue streams.

As monetary policy tightens, the US economy may enter a recession in 2023. This could negatively impact the AmEx share price if consumer spending falls. However, the card payment company has always rebounded after recessionary shocks before and its long-term prospects still look good to me.

Would I buy?

A bear market could be imminent, but studying Warren Buffett’s long-term investing approach eases my worries. Buying and holding carefully selected stocks through thick and thin has handsomely rewarded the Oracle of Omaha over decades.

American Express and Coca-Cola currently trade near all-time highs. This could mean further upside is limited. Indeed, Berkshire built both positions years ago at considerably cheaper prices than today. However, they’re still in its top four stock market holdings, with no signs of selling.

In Buffett’s own words: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” AmEx and Coca-Cola are clearly wonderful companies in his view. That’s good enough for me.

Warren Buffett has a unique gift for identifying wonderful companies at wonderful prices. I’ll settle for those same companies at fair prices. I’d buy both shares today.

The post 2 Warren Buffett stocks he’s held through 3 recessions appeared first on The Twelfth Magpie.

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Charlie Carman owns shares in Berkshire Hathaway. American Express is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool UK has no position in any of the shares mentioned. 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.

Successful investing is as much about avoiding duds or taking on too much risk as it is picking winners. It’s why Warren Buffett and his business partner Charlie Munger are two of the wealthiest individuals on the planet.

As the latter once remarked: “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.“

Today, I’m going to focus on two UK growth stocks that, thanks to the ‘Sage of Omaha’ and his colleague’s advice, I thankfully never fancied and still don’t. 

70% down!

I was sceptical about global review platform Trustpilot (LSE: TRST) when I first looked at it last September. At the time, the share price had soared 70% or so since its IPO earlier in the year.

Despite such impressive gains, I just couldn’t shake the feeling that it lacked an ‘economic moat‘. This is a term coined by Buffett to describe a business with sufficient competitive advantages to consistently fight off rivals. Might it be possible to copy what Trustpilot has done with sufficient capital and eventually steal its crown? I believe it is. 

But this wasn’t the only red flag for me. As well as being concerned about the potential for Trustpilot’s review system to be abused by bad actors, I was wary that the company was not making a penny in profit. 

Since then, the shares in this growth stock have tumbled almost 70%!  

Trustpilot isn’t without promise. Back in January, the company announced it expected FY21 annual recurring revenue to hit $144m. That’s a sizeable jump from the $119m achieved in the previous year. Based on this, investors might suggest the stock is a potentially lucrative contrarian pick.

With the rotation into value showing no sign of abating just yet, however, the outlook for the share price looks pretty bleak. Like Warren Buffett, I’d prefer to stick to proven quality stocks rather than take on the additional risk here.  

Another struggling growth stock

A second company I’m steering clear of is furnishings and homewares retailer Made.com (LSE: MADE). Just the fact that I’ve never looked at this growth stock until now speaks volumes.

While investors in Trustpilot enjoyed early gains, anyone backing this other relatively new stock will only have seen their stake sink in value. From a 52-week high of 214p, Made.com’s shares are now languishing at 73p a pop.

Again, the lack of economic moat strikes again. With so much competition, is there anything that will compel me to only shop with Made? Not at all. Contrast this with Buffett’s huge holding in Coca-Cola. The owns so much of the beverage titan because he knows a lot of people refuse to drink any other brand. This advantage arguably makes it far less risky. 

On top of this, the rise in the cost of living can’t be good for business. The boom in home improvement we’ve seen since the pandemic arguably peaked long ago too. Yesterday’s news that CEO Philippe Chainieux is stepping down is another unfortunate development.

With a market-cap now below £300m, perhaps the fall has been overdone. The website certainly looks slick and Made appears savvy when it comes to social media. For me however, this mostly presents as another unprofitable story stock that was opportunistically listed. 

The post I’m listening to Warren Buffett and avoiding these growth stocks like the plague! appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

One challenge faced by all investors sooner or later is learning to separate reality from myth, signal from noise. For me, consulting the thoughts and strategies of market masters such as Warren Buffett can be helpful in this regard. Here’s a small selection of how the Sage of Omaha’s incredible success shows why we all need to frequently question the things we hear. 

“The more stocks I own, the better”

Spreading my money around different shares sounds like plain common sense. After all, investing in just a few stocks, however carefully picked, opens me up to the threat of massive volatility and, perhaps, huge losses.

The truth, however, is a little more nuanced. Having too many investments is potentially as problematic as having too few. Why? The gains made by my winning picks will be diluted by the poorer performers and thus have less impact on my overall returns. Owning nothing but growth stocks when value stocks are in vogue is similarly not ideal.

Warren Buffett has long recognised the power that comes from running a concentrated portfolio of high-quality companies in different sectors. Investing heavily in one incredibly profitable beverage business (Coca-Cola), for example, has served him far better than investing in a number of average beverage businesses.

Clearly, the appropriate number of stocks for a person to hold will depend on many factors. There is no right number. However, the idea that ‘more is better’ should not be blindly accepted. 

“Only invest if you’re already rich”

The fact that Warren Buffett is one of the wealthiest individuals on the planet may be taken as a sign to non-investors that only the rich should get involved in the stock market. In fact, Buffett started from scratch, making his first investment at the age of 11.

Now, I sincerely doubt there are many 11-year-olds out there doing the same. Nonetheless, grasping the importance of getting started and cutting costs where possible are key to growing wealth. This applies regardless of a person’s age. It’s about making use of tax-efficient accounts, zero/low-commission online brokers and, if so inclined, cheap index-tracking funds.

One caveat to mention is that investing usually only makes sense when there’s a lack of debt (mortgage excluded). Having an emergency cash fund for life’s eventualities is also important.

“You can time the market”

It’s easy to study a share price graph and pick out what would have been the optimum moment to buy. For example, we now know that March 2020 was a wonderful time to go shopping in the market. 

The problem is that all of this is exceptionally easy to say in hindsight. When the chips are down and prices are tumbling, it takes guts to throw money into assets such as equities. To make matters worse, anyone attempting to ‘buy at the bottom’ perfectly soon faces another challenge: identifying exactly when to sell. 

As successful as he is, Warren Buffett doesn’t know what will happen next any more than I do. Instead, he recognises that a strategy of being “greedy when others are fearful” tends to work out well. This is assuming that the investor possesses sufficient patience to allow things to actually work out.

Holding the same stock for decades sounds unexciting, but it’s played a huge role in making Buffett the billionaire he now is.

The post 3 investment myths Warren Buffett has busted appeared first on The Twelfth Magpie.

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• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

I’m not yearning to retire either. However, I do like the idea of having that option available to me earlier than I might normally expect. Fortunately, a lot of Buffett’s wisdom is applicable, regardless of what specific targeted retirement age is in mind.

Develop good habits

“Most behavior is habitual, and they say that the chains of habit are too light to be felt until they are too heavy to be broken,” Buffett once said.

The possibility of retiring early will be lost if my day-to-day financial behaviour doesn’t fit in with this goal. So before getting stuck into investing, it’s vital to adopt the right habits that will serve rather than impede my progression.

For Buffett, these include not taking on credit unnecessarily and keeping some cash in reserve for unexpected costs. Interestingly, these are things he then takes forward into the market.

Leverage, Buffett believes, is not required for most investors to make money. He’s also well known for keeping a healthy amount of money on the sidelines and waiting for opportunities to emerge.

Ongoing education is also key for Buffett. This need not involve pursuing academic qualifications. Simply developing knowledge of personal finance and companies through regular reading could help bring a investor closer to financial independence. Buffett spends most of his working days doing just that.

Money for nothing

“If you don’t find a way to make money while you sleep, you will work until you die“.

While Buffett might be exaggerating here, I’d agree with the overall sentiment. Fortunately, the stock market can be a great way of passively growing wealth. By contrast, becoming a landlord means regularly dealing with ongoing maintenance issues and potentially troublesome tenants.

Naturally, there’s more than one way to grow rich via equities. Some Fools may be inclined to invest in high-growth stocks. As many investors in Tesla will attest, these have the potential to generate life-changing returns if bought early enough.

Of course, multi-bagging stocks like the electric car maker aren’t all that common. The ride to riches can also be a bumpy one.

Taking on excessive risk isn’t Buffett’s style. Conscious of the need to sleep well, he made his billions by investing in already-established giants such as Coca-Cola and American Express and simply holding on.

Learn to detach

A third tip from Warren Buffett’s playbook goes deeper than adopting sound habits and buying great stocks. It’s more to do with what actually goes on in our heads when the market is open.

“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”

In practice, this means running a portfolio as if it were a business. It’s not about proving other investors wrong and/or looking for excitement. It’s about keeping emotions in check, making sound decisions, based on my own risk tolerance and time horizon, and recognising that setbacks are inevitable.

And if I can buy stakes in businesses when others are fearful (as Buffett also suggests) then the option of retiring early might just come my way.

The post 3 Warren Buffett tips I’d follow to try to retire early appeared first on The Twelfth Magpie.

More reading

• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?

American Express is an advertising partner of The Ascent, a Motley Fool company. Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.