Buffett said he would keep these actions forever, but forever, he would end up?
Berkshire Hathaway (BRK.A 0.18%)) (BRK.B 0.09%)) A portfolio of shares which generally includes around 50 actions, but CEO Warren Buffett certainly plays favorites. There are some selected actions that he welcomed again and again and that he said that he would never sell while he was in charge, including Apple,, Coca-Cola (Ko -0.91%))And American Express (AXP 0.32%)).
Berkshire Hathaway has already sold about half of his position in Apple in the past year, although it is by far the greatest position, representing around 22% of the total. However, he did not touch a share of Coca-Cola or American Express. With Buffett who takes off and Greg Abel taking over, could these stocks be on the blockage?
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Why Buffett likes Coca-Cola and American Express actions
Coca-Cola and American Express are the longest action positions of Berkshire Hathaway. He first bought Coca-Cola shares in 1988 and American Express in 1991, and finished buying them in 1994 and 1995, respectively.
Over the years, Buffett has distinguished these two actions by its name in many cases. There are specific characteristics that he loves about them:
- Their dividends. “These dividend gains, although pleasant, are far from spectacular. But they bring important gains in action with them,” Buffett told the shareholders of 2022. Together, Coca-Cola and American Express write a check to Berkshire Hathaway for more than a billion dollars per year in dividends, while their combined shares increased from a total investment of $ 2.6 billion to around $ 50 billion.
- Their global brand names. “Above all, their products have traveled”, wrote Buffett about them in 2023. ” Coke and Amex have become recognizable names around the world, as well as their main products, and the consumption of liquids and the need for undisputed financial confidence are timeless essential elements of our world. “”
- Their profits. “We have a small percentage of a dozen very large and very profitable companies with names of households such as Apple, American Express, Coca-Cola and Moody’s. Many of these companies obtain very high yields on net tangible equity required for their operations, “he wrote in 2024. Buffett often says that a characteristic of an excellent company is to be able to operate and make a profit without having to invest considerably in the company.
Will Greg Abel change things to Berkshire Hathaway?
The market does not know as much about Abel at the moment, because it remains mainly under the radar. Although he has been part of Berkshire Hathaway for 25 years, he was embarked as vice-president in 2018 and appointed the Buffett successor in 2021.
On the one hand, Abel has been in charge of all companies not insurance for several years, and this style of management is already implemented. However, the actions portfolio is in the hands of Todd Combs and Ted Weschler, while Aub and Ajit Jain directed the owner side. If this corporate configuration remains in place, Abel cannot take a big position on investment decisions, leaving it to the current duo. In the current state of things today, they can make more calls than Buffett on action positions. Buffett told investors that it was one of his managers who made the decision to buy Amazon Stock in 2019, not his, and this probably applies to many recent business trades. Without buffett on the photo, or at least without him on the top, because he said he would always remain, the investment team can be more comfortable to make other fat trades which are slightly outside the Buffett box.
Buffett has repeatedly said that Berkshire is growing, it is more difficult to move the needle. When asked during the meeting last week how he would spend $ 10 billion on the current market, he pushed it back, saying that it would not do much. Abel could make macro decisions that guide the investment team differently from how they manage the portfolio of shares today, and is likely to develop their own leadership style.
However, I would not expect anything revolutionary to Berkshire Hathaway. Buffett’s investment made Berkshire Hathaway in what it is today, and the current team, which has been formed under its watch, does not change.
Will the new management sell Coca-Cola or American Express? These two companies have played in a fabulous manner at the moment, for all the reasons for the loves, so that does not seem likely in the short term. But Abel did not commit to them as a buffett, and it is certainly a possibility at a future moment.
John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of Motley Fool’s. American Express is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express and Apple. The Motley Fool has positions and recommends Amazon, Apple, Berkshire Hathaway and Moody’s. The Motley Fool has a policy of disclosure.
