When investing, there’s no name more iconic than Warren Buffett. The Oracle of Omaha’s investment journey is filled with stories of legendary successes and wisdom. In this blog post, we’ll dive into the 25 most important investments Warren Buffett has ever made. These investments showcase the principles that have made him one of the world’s most successful investors. These investments built his legend as the greatest investor of all time and Berkshire Hathaway into one of the biggest most successful corporate conglomerates ever.
Warren Buffett’s most important investments:
1. Berkshire Hathaway
2. Blue Chip Stamps
3. See’s Candies
4. American Express
5. R. J. Reynolds
6. GEICO
7. Illinois National Bank
8. Hochschild Kohn’s
9. National Indemnity
10. Wesco Financial
11. General Foods
12. Buffalo News
13. General Re
14. Salomon Brothers
15. Coca-Cola
16. Pinkerton
17. BNSF
18. Capital Cities
19. Safeco Insurance
20. Kaiser Aluminum
21. Exxon
22. Associated Retail Stores
23. Scott Fetzer
24. Washington Post
25. Walt Disney
1. Berkshire Hathaway
Buffett’s most famous investment is undoubtedly Berkshire Hathaway. Originally a struggling textile company, Buffett transformed it into a conglomerate behemoth. Today, Berkshire Hathaway owns diverse businesses and boasts a colossal market capitalization. Berkshire Hathaway is one of the few stocks Warren Buffett has owned personally since becoming its chairman and CEO. All the other companies you hear about him investing in are ones he has held in the Berkshire Hathaway stock portfolio or acquired the whole company for Berkshire Hathaway and made it a subsidiary. Warren Buffett has parked over 99% of his net worth over most of his adult life in Berkshire Hathaway since he was in his late 30s.
2. Blue Chip Stamps
“In 1971, Warren and Susan Buffett personally owned 13% [of Blue Chip Stamps]; Berkshire Hathaway, of which the Buffett’s were 36% owners, held 17%, and Diversified Retailing Inc., of which the Buffett’s owned 42%, held 16%. In addition, Diversified Retailing owned shares in Berkshire, and Munger’s partnership owned 10% of Diversified Retailing, plus 8% of Blue Chip. [Rick] Guerin’s partnership owned 5% of Blue Chip.”[1]
Berkshire, Diversified, and Blue Chip were all deeply undervalued businesses Munger, Buffett, and Guerin had been buying for their partnerships. By gaining control of these companies, they could use the business’ capital to increase their investments in other deeply undervalued securities. In one way, these three value investors were using deep-value stocks to buy more deep-value stocks, leveraging each company’s cash flow to boost their capital resources.
Eventually, Munger dissolved his partnership. Diversified was then merged into Berkshire. Berkshire’s Blue Chip ownership hit 60%. “Together, Berkshire, Buffett, and Munger owned nearly 75% of the outstanding shares of Blue Chip.”
With this voting power, Buffett and Munger could take over the investment committee of Blue Chip, which gave them a significant capital resource. The funds were used to buy other businesses, including See’s Candy, Wesco Financial, The Buffalo Evening News, and Precision Steel. These are the foundations of Berkshire as we know it today. Therefore, it could be argued that the foundations of Berkshire were built by Blue Chip, which Munger managed. Munger sent his letter to investors every year in the annual report.
Buffett acquired Blue Chip Stamps, a trading stamp company, in the 1960s. While the company no longer exists, its acquisition provided him with valuable assets that would be essential additions to Berkshire Hathaway’s portfolio.[2]
3. See’s Candies
Buffett bought See’s Candies in 1972, one of his most prized investments. This iconic candy business has consistently generated solid profits and taught Buffett the importance of investing in companies with durable competitive advantages. Buffett loves that See’s Candies has an industry niche and doesn’t try competing with Hershey’s. Buffett loves the gross profits in the candy business and its repeating sales patterns.
4. American Express
Buffett first invested in American Express in the 1960s, one of his top holdings. This credit card giant has rewarded him with considerable returns, thanks to its dominant position in the financial services industry. American Express is still 7.49% of the Berkshire portfolio in 2023.[3]
5. R. J. Reynolds
In the 1980s, Buffett purchased a significant stake in R. J. Reynolds, the tobacco company behind brands like Camel and Winston. This controversial investment proved profitable for Buffett and his shareholders.
6. GEICO
Buffett’s first encounter with GEICO was in the 1950s when he discovered the insurance company’s competitive edge. Over the years, he increased his stake, eventually buying the company outright in 1995. Today, GEICO is a core part of Berkshire Hathaway’s insurance operations. This was the company where Buffett saw the potential of the insurance business for creating cash flow to acquire other investments. The insurance business was also modeled after the math of probabilities, Buffett’s natural language.
7. Illinois National Bank
In the 1960s, Buffett made a significant investment in Illinois National Bank. Though he eventually had to sell the bank due to new regulations, this investment taught him valuable lessons about the power of banking and financial services. Buffett has gone on to love the financial and banking sector as an investment ever since this investment.
8. Hochschild Kohn’s
Buffett bought a controlling interest in Hochschild Kohn’s, a Baltimore-based department store, in the 1960s. Though the investment was not as successful as some of his others, it reinforced the importance of investing in businesses with strong economic moats. This investment was valuable for the lessons it taught Buffett early on in his career.
9. National Indemnity
Buffett acquired National Indemnity, an insurance company, in 1967. This acquisition began his long and successful foray into the highest levels of the insurance industry, a sector that would define Berkshire Hathaway’s core operations.
10. Wesco Financial
In 1973, Buffett purchased a controlling stake in Wesco Financial, a diversified financial services company. Wesco became essential to Berkshire Hathaway’s portfolio before fully merging with the parent company in 2011.
11. General Foods
Buffett invested in General Foods, the company behind products like Jell-O and Kool-Aid, in the late 1970s. The investment turned out to be a winner, as Philip Morris later acquired the company in 1985 at a significant premium. This was one of his first investments in a broad consumer goods company. He liked this business model and made similar investments after this one.
12. Buffalo News
Buffett’s investment in Buffalo News dates back to 1977, when he started purchasing shares of the newspaper company. In 1983, Berkshire Hathaway acquired the remaining shares. This investment reflected Buffett’s belief in the newspaper industry and its ability to generate stable cash flows.
Buffett’s investment in Buffalo News was successful, as the company managed to maintain profitability and a strong market position for many years. The investment demonstrated his focus on businesses with durable competitive advantages, as the newspaper’s local dominance and loyal readership made it difficult for competitors to disrupt its market position. However, with the rise of digital media and the decline of print newspapers, the industry landscape has changed significantly, impacting Buffalo News’ performance in recent years. On January 29, 2020, the Buffalo News reported it was being sold along with the rest of Berkshire Hathaway’s newspaper portfolio to Lee Enterprises
13. General Re
Buffett’s acquisition of General Re, a reinsurance company, in 1998 significantly expanded Berkshire Hathaway’s insurance operations. The deal further solidified the conglomerate’s presence in the insurance industry, adding more diversity and stability to its portfolio. He became the insurer for insurance companies. The term reinsurer refers to a company that provides financial protection to insurance companies. Reinsurers handle risks that are too large for insurance companies to handle on their own and make it possible for insurers to obtain more business than they would otherwise be able to. [4]
14. Salomon Brothers
Buffett invested in Salomon Brothers, a Wall Street investment bank, in the 1980s. Though the company faced various challenges, Buffett’s intervention and guidance helped it recover. Berkshire Hathaway eventually sold its stake at a profit in 1997.
15. Coca-Cola
Coca-Cola is one of Buffett’s most famous investments. He began buying shares in the beverage giant in 1988, which remains a significant holding today at 8.51% of the Berkshire portfolio. Coca-Cola’s strong brand and global reach have made it a consistent performer. This was one of Buffett and Munger’s favorite investments of all time. This was the perfect stock and price when Buffett started buying it. A wonderful company and a great price that has a durable advantage, a competitive moat, recurring revenue, and a high-profit margin. Buffett and Munger bought all they could at the time.
16. Pinkerton
In 1988, Berkshire Hathaway acquired Pinkerton, a security services company. This investment broadened the conglomerate’s range of businesses and provided Buffett with a steady cash flow stream from Pinkerton’s services.
17. BNSF
Buffett’s 2009 purchase of Burlington Northern Santa Fe (BNSF), a railroad company, marked one of his largest investments ever. The acquisition has proven successful, with BNSF consistently generating robust cash flows and profits for Berkshire Hathaway.
18. Capital Cities
In the 1980s, Buffett invested in Capital Cities, a media company that eventually merged with ABC. The investment was highly profitable, as The Walt Disney Company later acquired Capital Cities/ABC at a significant premium.
19. Safeco Insurance
Buffett invested in Safeco Insurance in 2007, recognizing the company’s potential in the insurance market. Although Berkshire Hathaway later sold its stake, the investment generated substantial returns during its holding period.
20. Kaiser Aluminum
Buffett bought a stake in Kaiser Aluminum, an aluminum producer, in the late 1980s. While this investment was not as successful as some of his others, it demonstrates his willingness to invest in diverse industries.
21. Exxon
In 2013, Buffett invested in Exxon, the global oil and gas giant. This investment exposed Berkshire Hathaway to the energy sector and its associated cash flows. However, the stake was sold in 2014 after a relatively short holding period.
22. Associated Retail Stores
Buffett acquired Associated Retail Stores, a discount retail chain, in the 1960s. This investment provided him with valuable retail industry experience and helped lay the foundation for his future retail investments.
23. Scott Fetzer
Buffett purchased Scott Fetzer, a diversified manufacturing company, in 1986. This acquisition expanded Berkshire Hathaway’s portfolio of businesses and contributed to its overall growth and success.
24. Washington Post
In 1973, Buffett began investing in the Washington Post, a prestigious newspaper company. This investment was highly successful and generated significant returns for Berkshire Hathaway. Buffett sold Berkshire Hathaway’s 28% stake back to the Washington Post Company, now named Graham Holdings, in 2014. But this was a year after the Graham family had sold the Washington Post newspaper to Jeff Bezos. [5]
25. Walt Disney
Buffett first invested in Walt Disney in 1966, recognizing the value of its iconic brand and entertainment offerings. Although he later sold his stake, the investment taught him the importance of investing in companies with solid brands and enduring appeal.
Warren Buffett’s best recent investment
This blog post wouldn’t be complete unless I mentioned Warren Buffett’s most important recent investment. While we don’t know how it will turn out when and if he exits, Buffett has seen returns as high as $100 billion from his Apple investment since he first invested in the company in 2016, drawing comparisons to the legendary investor’s Coca-Cola holdings. He loved Apple’s stock price valuation, recurring revenue from phone upgrades, digital store, brand recognition, industry advantage, competitive moat, and management. This is a modern example of Buffett’s investment model—the Berkshire portfolio currently has 38.9% of its capital invested in this one stock. Buffett is showing that he still has his investment skills at 93.
Key Takeaways
- Focus on businesses with durable competitive advantages
- Diversify across industries to build a robust portfolio
- Recognize the value of strong brands and their potential for enduring success
- Invest with a long-term perspective, but be willing to adapt when circumstances change
Conclusion
Warren Buffett’s 25 most important investments showcase the principles that have made him an investment legend. He has built a robust and enduring portfolio by focusing on the importance of durable competitive advantages, diversification, and strong brands. Buffett has achieved unparalleled investment success by adapting to changing circumstances and maintaining a long-term perspective. Learning from these principles can provide valuable insights for investors who emulate his extraordinary track record.