“It changed my mother’s life and my father’s life. It changed lives in every way.” Buffett said.
The Biggest Investment of Buffet’s Life (So Far)
Self-confessed technophobe Warren Buffett was never a fan of tech stocks. But that changed when he realized Apple (AAPL) is “probably the best business I know in the world.”
And while Buffett is known as a value investor, there’s one reason he made an exception for Apple:
According to CNBC, Buffett said the smartphone is the next evolution of the telephone, involved in almost all aspects of hundreds of millions of people’s lives. And Buffett has put the money where his mouth is.
Buffett spent more than triple the amount in Apple ($155 billion) than in Bank of America ($50 billion), and more than five times more on American Express ($28 billion) and Coca Cola ($24 billion).
In fact, Apple is now almost half (48.4%) of Buffett’s portfolio. And he said was probably a mistake selling some shares in 2020. But despite the small sale, Buffett’s investment paid off.
With Apple becoming the first company to reach a $3 trillion market cap (Jan 3rd, 2022), Buffett made over $120 billion, while at the same time he’s enjoying $775 million in annual dividends (Source: CNBC).
So it’s no surprise that despite the Fed’s recent announcement sending the stock market into correction territory, Buffett is still holding onto Apple.
Is This Buffett’s Next Move When The Market Crashes?
Most investors may not realize this, but Buffett sold Wells Fargo (which he bought in 1989), all his big four airline stocks, and some Apple stocks in 2020…
But in over 34 years, Buffett never sold a single share of one particular stock.
And considering Buffett made more than 20-fold gain with it; he could consider this stock again.
It’s not Apple. It’s Coca-Cola (KO).
Inc. reported: Buffett recalled that when he was seven years old, he started selling Coca-Cola to neighbors and noticed the extraordinary commercial possibilities of the product.
He said, “if I had been thinking straight, I would have persuaded my grandfather to sell the grocery store back in 1936 and put all of the proceeds into Coca-Cola stock.”
But it wasn’t until the market crashed in 1987 that Buffett realized Coke was an undervalued stock and a potential long-term investment.
So Buffett bought more than $1 billion worth of Coca-Cola, the biggest purchase he’s ever made (in 1998). And to this day, Yahoo Finance reported it’s the oldest stock Buffett owns.
With Buffett’s Berkshire Hathaway (BRK-A) in 2021 selling more stocks than it ever did since 2008, and holding $149.2 billion in cash…
Is Buffett once again waiting for the opportunity to buy undervalued (tanked) stocks as he did with Coca-Cola?
With the 40-year record inflation and The Fed’s imminent interest rate hike, many investors are probably trying to guess what the world’s best investors' next move is.
Could Buffet be Looking at Alternate Investments in 2022?
In addition to his favorite stocks, Warren Buffett also owns alternative assets like farmland. Buffett wrote about it to investors: “There would, of course, be the occasional bad crop… [but] now, 28 years later, the farm has tripled its earnings and is worth five times or more what I paid.”
Some ultra-high-net-worth individuals are also investing in alternative assets like art, which the WSJ recently reported as“among the hottest markets on earth.”
Examples include The Rothschilds, who sold a painting to the Dutch government for $197 million. Oprah Winfrey grossed $62 million selling her 1912 painting to an undisclosed buyer. Jeff Bezos recently sold more Amazon stocks and also bought $70 million in artworks.
And there may be good reasons for that. Contemporary art prices appreciated 23.2% on average when inflation was at least 3% covering 12 months to December 2020. And they outpaced the S&P 500 by 164% from 1995 to 2021.
And now, investors can invest in this overlooked alternate asset that some ultra-high-net-worth individuals invest in with Masterworks. There are more than 300,000 members on the Masterworks art investment platform
*See important disclosures at masterworks.io/disclaimer