Billionaire investor Warren Buffett held the annual meeting of
Berkshire Hathaway Inc (BRK-A) on Saturday to reveal major new investments. Buffett is famous for his incredible investment ideas.
If you an ardent follower of the investment guru Warren Buffett, you might find his latest suggestions intriguing. Normally, Buffett takes interest in companies trading below what he believes is their intrinsic value. He aims for long-term outperformance and apparently ignores short-term downturns.
Berkshire spent $51 billion on equities in the quarter, and its cash stake dropped more than $40 billion to $106 billion. Berkshire also said first-quarter operating profit was little changed at $7.04 billion, as many of his businesses endured supply chain disruptions caused by COVID-19 variants, the Ukraine invasion and high inflation,
With rising rate worries and geopolitical crisis bringing about uncertainties in the global investment backdrop, many are waiting for the investing tactics of the Oracle of Omaha. For them, below we highlight a few investing strategies.
Invest in Activision-Heavy ETFs
Warren Buffett said on Saturday that
Berkshire Hathaway Inc (BRK-A) has taken a 9.5% stake in Activision Blizzard Inc ( ATVI Quick Quote ATVI - Free Report) , and focused on the stake mainly after Microsoft agreed to buy the video game maker for $68.7 billion.
So, ETF investors can play Activision-Heavy ETFs
ProShares On-Demand ETF (OND), Global X Video Games & Esports ETF ( HERO Quick Quote HERO - Free Report) , VanEck Video Gaming and eSports ETF ( ESPO Quick Quote ESPO - Free Report) and Invesco Dynamic Software ETF (PSJ). Bet on Energy: Chevron-Oxidental-Heavy ETFs
WTI crude ETF
United States Oil Fund, LP ( USO Quick Quote USO - Free Report) is up 42% this year as the geopolitical turmoil between Russian and Ukraine aggravated concerns over the energy supply crunch. As a result, Buffett’s Berkshire's portfolio has got a lift from Chevron (CVX), which is Buffett's fourth-largest holding.
The “Oracle of Omaha’s” Chevron investment went up 475.6% from the end of 2021. At the end of the first quarter of 2022, the Chevron investment was
worth $25.9 billion versus its value of $4.5 billion at the end of 2021. Chevron pays a 3.6% dividend
The oil giant's shares are up 33.5% this year.Chevron-heavy ETFs like
Energy Select Sector SPDR Fund ( XLE Quick Quote XLE - Free Report) and Vanguard Energy ETF (VDE)could be bought as long the trend is your friend.
Not only Chevron, Buffett bought $7 billion worth of Occidental Petroleum’s common shares in additional investments last month. “Together with the $10 billion in OXY preferred, Berkshire’s bet on the oil sector is now over $40 billion,” said James Shanahan, a Berkshire analyst at Edward Jones, as quoted on CNBC.
Invesco Dynamic Energy Exploration & Production ETF (PXE) is an Occidental-heavy fund to invest. Be Big on Bank of America & American Express
Warren Buffett's Berkshire Hathaway turned out to be one of the largest shareholders of Bank of America (BAC). Buffett’s interests on Bank of America puts BAC-heavy ETFs like iShares
U.S. Financial Services ETF (IYG), Invesco KBW Bank Portfolio ( KBWB Quick Quote KBWB - Free Report) and Financial Select Sector SPDR Fund (XLF) in focus.
Another financial stock Buffett is relying on is American Express. A MoneyWise article, quoted on Yahoo, explained that American Express’ business model is inflation friendly. Merchants are charged a percentage of every Amex card transaction.
American Express’ business model is inflation friendly. Merchants are charged a percentage of every Amex card transaction. As the price of goods and services rises, bill amounts also go up and companies like AXP get a share of fatter bills.
ETFMG Prime Mobile Payments ETF ( IPAY Quick Quote IPAY - Free Report) should stand to gain on this trend. Apple: The Cherry on the Icing
Berkshire’s biggest holding was still Apple, worth $159 billion at the end of the first quarter. In 2017, Buffett said consumers ‘want the product’ despite its prices. This gives Apple the leeway to pass on the rising costs to consumers (which won’t hurt sales) due to sheer brand name. Plus, Information Technology business normally does not require recurrent capital investments, which makes it an inflation-friendly investment. Even though rising rates are concerns for the tech stocks, Apple is strong enough to weather any rout. Despite a volley of concerns, Apple is still the best-performing FAAMG stock this year.
One can bet on Apple ETFs like
Technology Select Sector SPDR Fund ( XLK Quick Quote XLK - Free Report) , Fidelity MSCI Information Technology Index ETF ( FTEC Quick Quote FTEC - Free Report) and Vanguard Information Technology ETF (VGT).