If you want to know which rare coins are the best to own, examining the collection of one of the world's top coin collectors isn't a bad place to start. Ditto with stocks. You'll find plenty of great ideas among the stocks Warren Buffett has bought for Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) portfolio.
The good news is that you don't need a huge up-front investment to scoop up some of those stocks. Got $1,000? Here are five Buffett stocks to buy and hold forever.
1. Amazon
Buffett didn't personally make the call to buy shares of Amazon(NASDAQ: AMZN) for Berkshire's portfolio. One of the conglomerate's two investment managers initiated the position in Amazon. However, Buffett stated he was "too dumb" to invest in Amazon sooner.
I think Amazon is an ideal Buffett stock to buy and hold long term. The company has plenty of growth opportunities in its core e-commerce business. Its potential upside is even greater with Amazon Web Services, as the demand for artificial intelligence (AI) drives more organizations to the cloud. Amazon also continually looks for new markets to enter, with supply chain services and primary care standing out as two recent examples.
2. Bank of America
Bank of America(NYSE: BAC) ranks as the second-largest holding in Berkshire's portfolio. Although Buffett has exited positions in several bank stocks in recent years, he has retained and even added shares of BofA.
Banking and financial services are changing. However, BofA is navigating those changes exceptionally well, evidenced by its being named by Global Finance as one of the world's most innovative banks in 2023. This stock is attractively valued right now to boot, with a forward earnings multiple of around 9 times.
3. Markel Group
There's arguably no stock in Berkshire's portfolio more like Berkshire itself than Markel Group(NYSE: MKL). Both companies have core insurance businesses. Both also have extensive investment portfolios.
I like Markel Group as a stock to buy and hold over the long term in large part because it provides a lot of diversification. The company's Markel Ventures owns stakes in nearly 20 companies. Markel also holds positions in more than 100 stocks, notably including Berkshire Hathaway.
4. Mastercard
Buffett likes moats. There's no better attribute for a company to be able to survive and thrive for decades. It's unsurprising, therefore, that Berkshire owns nearly 4 million shares of Mastercard(NYSE: MA).
Mastercard actually has several moats. Its brand is widely recognized around the world. The company's extensive payments network gives it cost advantages over smaller rivals that might try to usurp the duopoly it enjoys with Visa. Perhaps most importantly, Mastercard has strong network effects. The more customers who use it for payment processing, the more merchants it attracts, and vice versa.
5. Moody's
Speaking of Buffett stocks with moats, we can't leave out Moody's(NYSE: MCO). The company is one of only a handful of credit rating agencies. Moody's and S&P Global's Standard & Poor's together command market shares of around 80%, with Fitch coming in a distant third with a market share of 15%.
The need for the services provided by Moody's won't go away. Instead, the demand should increase over the next decade and beyond with the expansion of emerging markets and the company's use of AI and other technology to improve its capabilities.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Speights has positions in Amazon, Bank of America, Berkshire Hathaway, and Mastercard. The Motley Fool has positions in and recommends Amazon, Bank of America, Berkshire Hathaway, Markel Group, Mastercard, Moody's, S&P Global, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
