Let’s try a few ideas to try. What if I could only buy the stock today and have to hold it forever?
What tick can withstand the greatest pressure? I would need a business with the fortitude to stay fit for decades. It should work in many different areas and sectors, giving my one-ticker portfolio a similar diversity. And of course, I would like a company with global leaders. That team will be trusted with my entire imaginary nest egg, after all.
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It may be a cop-out to choose a fund. The exchange-traded wallet is next S&P 500(SNPINDEX: ^GSPC) A market index would certainly fit the bill with rapid diversification and unlimited staying power. It also acts as a one-stop shop in many ways, and can easily be sold. But again, that Vanguard S&P 500 ETF(NYSEMKT: VOO) it is definitely not the same stock. Therefore, it does not conform to the rules of my simple reasoning experiment.
At first, I thought of several mobile technology giants. Amazon(NASDAQ: AMZN) it would give me access to e-commerce, physical retail stores, artificial intelligence (AI) and cloud computing, shipping services, etc. Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL) with a heavy focus on online search and advertising, supported by digital video platforms, Android’s mobile computing, the recently launched robo-taxi service, etc. Both companies look ready to stay in business and surprise customers with new business ideas for a long time.
But that still doesn’t feel right for this experiment. Alphabet and Amazon can only offer a limited amount of diversification, far from the immediate safety offered by an index fund.
That requirement narrows down my list of possible stock picks dramatically. Finally, there is only one company that can do what I want. Hello there Berkshire Hathaway(NYSE: BRK.A)(NYSE: BRK.B) — the closest thing to a fund in the form of a single company.
First and foremost, Berkshire’s diverse business portfolio is legendary. It’s an insurance company at heart, with auto giant GEICO and 13 other comprehensive insurance brands. But the company also owns Duracell batteries, BNSF railroads, Kraft Heinz in your refrigerator and Dairy Queen for takeout, and much, much more. I counted about 70 brands on Berkshire’s list of companies under its control.
And it’s just the beginning. Berkshire also holds a large portfolio of stock investments. There are 46 stocks in that minority investment group, led by Apple(NASDAQ: AAPL) the money is currently worth 70.5 billion dollars. The list includes several multinational banks, food giants, the Chinese leader in electric cars, and $200 million in Amazon.
Berkshire’s investments focus on the financial services and industrial sector, but there is a good sprinkling of other jobs here. This is not a complete sector-wide snapshot of the economy, but I encourage you to get a close approximation.
Image Source: The Motley Fool.
A company is only as good as its leadership, and Berkshire Hathaway is led by professional investor Warren Buffett. Below the unlisted title, Berkshire offers freebies to each business unit’s own management team.
Buffett likes to invest in simple businesses, a ham sandwich can run them successfully. And he anyway he insists on letting quality leaders run these unwise businesses. It is another level of security, protecting Berkshire and its investors from the risks of business operations.
It’s understandable if you’re wondering what would happen if Warren Buffett wasn’t leading the Berkshire Hathaway business anymore. Longtime business partner and Berkshire vice chairman Charlie Munger died last year at age 99, and Buffett is only a few years younger. Berkshire Hathaway won’t be a “Buffett business” for decades. So what happens when a famous investor goes under?
Honestly, I don’t expect much change. Buffett actually leaves important portfolio decisions in the hands of trusted advisors, who have learned from the best and should be able to sustain the Buffett-and-Munger plan in the long run. For example, Todd Combs and Ted Weschler are said to have led the purchase of Apple stock in 2016. That purchase certainly had the blessing of Buffett and/or Munger, but it was not their choice.
Long story short: Berkshire Hathaway has a deep bench of top-notch fund managers. The company may lose momentum when Buffett is gone, but the company should do well in the decades ahead.
So where does this little thought experiment lead? It’s headed for Berkshire Hathaway’s door. With its hand in everything from insurance to ice cream under the steady hand of a dream investment team, Berkshire is your best bet to “never stock.” Of course, nothing is guaranteed in the market. But if I were to put all my eggs in one basket and hold on for dear life, I could do a lot worse than hitch my wagon to Buffett’s insurance company.
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John Mackey, former CEO of Whole Foods Market, which supports Amazon, is a member of The Motley Fool’s board of directors. Suzanne Frey, CEO at Alphabet, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Alphabet, Amazon, and the Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, and the Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
If I Could Only Buy and Hold Another Stock, This Would Be Originally Posted by The Motley Fool.
