Even those who aren’t familiar with his work have heard the name Warren Buffett. The world’s most accomplished investment mogul, Buffett, has built his wealth making smart investments that focus on long-term capital gains. His greatest achievement is arguably the acquisition of Berkshire Hathaway in 1965. Today, the former struggling textile company is the largest conglomerate globally, bringing in a revenue of $671.52B in 2024.
In this article, we’ll discuss Berkshire Hathaway’s diversified portfolio and how Buffett’s intelligent investment choices turned a financially unstable business into the most successful holding company in the world.
A Calculated and Diverse Portfolio
When it comes to Berkshire Hathaway’s portfolio, one word comes to mind: calculated. Buffett rarely—if at all—makes investments on a whim. Every investment choice has, and continues to be, one of strategy aimed at procuring long-term returns and increased capital gains.
It’s worth noting that a diversified portfolio is not the same as an even portfolio. What Buffett has taught us is that every portfolio should contain a mix of assets from various sectors. Seldom should you obtain the same amount of shares from each investment, but rather make a calculated and meaningful purchase to help strengthen your portfolio and facilitate its growth. This is very much the case with Berkshire Hathaway, whose portfolio contains more than 26% of Apple Inc. shares in comparison to 0.74% of Mastercard Incorporated (MA) shares.
The Risk of Over-Diversifying Your Portfolio
A diverse portfolio is statistically more successful than a uniform one. Companies fail, stocks drop, and industries become obsolete. However, over-diversifying your portfolio is equally as risky. Here’s why:
- Diminished Focus: Spreading your investments thin can make it difficult to monitor and manage your portfolio effectively.
- Reduced Potential Returns: Over-diversification may result in a dilution of returns, with underperformers offsetting high-performing assets.
- Inadequate Expertise: When you invest in a sector you don’t understand, you hinder your ability to make informed investment choices.
- Portfolio Imbalance: Adding too many investments can unintentionally lead to overlapping or concentrated positions in certain sectors or regions, undermining your portfolio.
Berkshire Hathaway's Portfolio: Striking the Ideal Balance
Buffett has spent a lifetime investing funds into businesses with high-value potential, choosing to focus on long-term capital gains rather than short-lived returns. His strategy of buying great businesses at fair prices has proven incredibly effective, allowing him to build a solid and resilient portfolio that continues to prosper.
The true genius of Berkshire’s portfolio lies in its careful curation. It holds excellent businesses that operate in stable industries, helping to safeguard it from unpredictable events and market instability. Buffett has spent decades refining this portfolio, investing in industries with growth and longevity potential to ensure it remains stable even in the most precarious market fluctuations.
What’s more, Buffett strengthens Berkshire’s diversified portfolio by investing in sectors that indirectly benefit its current investments. For example, innovative technologies and software, such as those developed by Apple, have the potential to revolutionise business functions and workplace processes, helping drive profits and returns.
What Sectors Make Up Berkshire Hathaway Holdings?
Finance
Finance underpins every other sector and is fundamental for economic sustenance and growth. Its strict regulations keep it accountable for safe, fair, and transparent operations, posing fewer risks to investors than its more speculative counterparts. Buffett leverages this abundant sector, seeking opportunities in industries such as banking and insurance to boost and sustain Berkshire’s portfolio.
Examples of Berkshire Hathaway’s Finance Holdings:
Bank of America Corp (BAC) — 11.9%
American Express Co. (AXP) — 15.4%
Moody’s Corp (MCO) — 4.4%
Consumer Staples
Due to its defensive nature, the consumer staples sector offers stability in market volatility. It comprises essential non-durable goods like food, drinks, and personal care products, which remain in demand regardless of economic conditions. This demand furthers the sector’s resilience, helping stabilise investments during economic unpredictability.
Examples of Berkshire Hathaway’s Consumer Staples Holdings
Coca-Cola Co. (KO) — 10.8%
The Kraft Heinz Co (KHC) — 4.3%
The Kroger Co. (KR) —1.08%
Information Technology
Info tech is here to stay. With the rise of things like artificial intelligence (AI), remote work arrangements, and paperless file storage, the world has undoubtedly gone digital. Seeing this shift as an incredibly durable opportunity, Buffett chooses to invest in high-tech corporations that offer a competitive advantage.
Examples of Berkshire Hathaway’s Info Tech Holdings
Apple Inc. (AAPL) — 26.24%
VeriSign Inc. (VRSN) — 0.91%
Energy & Utilities
There is a global need for energy, renewable or otherwise. Additionally, as energy costs rise, so too do opportunities for possible high returns. This makes the energy and utilities sector a stable and attractive investment choice, particularly for Buffett, who, in 2023, allocated $3.9 billion toward wind and solar power initiatives.
Examples of Berkshire Hathaway’s Energy and Utilities Holdings
Occidental Petroleum Corp (OXY) — 4.94%
Chevron Corp (CVX) — 6.56%
Communication Services
The communications sector is marked by continuous innovation and adaptability, making it a desirable choice for investors. Additionally, modern technological advances have improved and diversified the way we communicate, offering greater, more sustainable investment opportunities.
Examples of Berkshire Hathaway’s Communications Holdings
T-Mobile US Inc. (TMUS) — 0.46%
Charter Communications Inc. (CHTR) — 0.34%
Healthcare
Healthcare is a consistently growing industry driven by an ageing population and ongoing demand for medical services and innovation. Like consumer staples, the healthcare sector benefits from consistent demand, providing numerous opportunities for consistent returns on investments.
Example of Berkshire Hathaway’s Healthcare Holdings
DaVita Inc. (DVA) — 2.2%
Consumer Discretionary
The consumer discretionary sector is incredibly diverse, consisting of various industries rife with investment opportunities. Buffett always invests in businesses he understands, and with a background selling gum, soft drinks, and magazines, he has much experience selling and marketing non-essential goods.
Examples of Berkshire Hathaway’s Consumer Discretionary Holdings
Sirius XM Holdings Inc. (SIRI) — 0.93%
Amazon.com Inc. (AMZN) — 0.7%
Domino’s Pizza Inc. (DPZ) — 0.21%
Materials
The materials sector is essential for economic growth and infrastructure, covering commodities like metals and concrete. Its cyclical nature means investment opportunities can arise during economic expansions, which increases demand and pricing. The sector is tied to economic cycles and mega-trends, which allows Buffett to make secure investment decisions.
Examples of Berkshire Hathaway’s Materials Holdings
Louisiana-Pacific Corp (LPX) — 0.24%
POOLCORP (POOL) — 0.06%
Berkshire Hathaway Top 5 Holdings (2025)
Apple Inc. (AAPL)
Apple has ascended to global dominance with iconic products and software. Its commitment to design excellence and functionality continues to set industry standards, solidifying its position as an emblem of innovation and luxury. Apple Inc. makes up over a quarter of Berkshire’s portfolio.
First Trade: Q1 2016
Portfolio Percentage: 26.24%
American Express Co (AXP)
Standing as a pillar of financial prestige and convenience, Amex has evolved into a symbol of affluence, reliability, and exceptional customer service.
First Trade: Q3 1991
Portfolio Percentage: 15.44%
Bank of America (BAC)
With a focus on digital innovation and sustainable operations, Bank of America has grown into one of the world’s leading banks.
First Trade: Q2 2007
Portfolio Percentage: 11.88%
Coca-Cola (KO)
Coca-Cola is a historic icon in the global beverage industry. After taking a significant hit in the 1987 financial crisis, Buffett saw an opportunity to invest, stabilising the company to help make it the household name it remains today.
First Trade: 1988
Portfolio Percentage: 10.79%
Chevron (CVX)
Chevron is involved in every aspect of the oil and gas industry, from exploration and production to refining, marketing, and transportation. With a strong commitment to sustainability and innovation, Chevron is a pivotal player in securing energy for a rapidly evolving world, while also investing in alternative energy sources and technology to reduce environmental impact.
First Trade: Q4 2020
Portfolio Percentage: 6.56%
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Please note all information is true and correct as of January 2025.
