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Warren Buffett’s Most Profitable Investments of All Time

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·13 min read
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In this article, we discuss Warren Buffett's most profitable investments of all time. If you want to skip our detailed analysis of these investments, go directly to Warren Buffett's 5 Most Profitable Investments of All Time.

Warren Buffett, affectionately referred to as the ‘Oracle of Omaha’ due to his roots in the former Nebraskan capital, is the face of the American stock market. Buffett is perhaps the most successful and famous investor in modern history and has a worth of over $108 billion. He has made a name for himself in the market through a value investing strategy that prioritizes long-term financial outlook over short-term profits. Some of the most outrageous investments that Buffett has made have offered him equally outrageous returns.

Buffett is the chief of Berkshire Hathaway Inc. (NYSE: BRK-A), the Nebraska-based holding company with stakes in some of the biggest businesses like Apple Inc. (NASDAQ: AAPL), the California-based technology giant, The Coca-Cola Company (NYSE: KO), the Georgia-based beverage firm, and Bank of America Corporation (NYSE: BAC), the North Carolina-based financial services firm. Berkshire Hathaway Inc. (NYSE: BRK-A) has owned stakes in most of the top holdings in its portfolio for more than a decade.

Apple Inc. (NASDAQ: AAPL), The Coca-Cola Company (NYSE: KO), and Bank of America Corporation (NYSE: BAC) represent more than half of the total investment profile of Berkshire Hathaway Inc. (NYSE: BRK-A). The company has averaged more than 20% in annual return on investments for more than five decades, a rather remarkable record unmatched in history. In the first quarter of 2021, the company reported a net income of more than $11.5 billion, a huge relief after close to $50 billion in losses at the beginning of the coronavirus crisis in 2020.

In recent years, the reluctance of Berkshire Hathaway Inc. (NYSE: BRK-A) to take advantage of a technology-related stock rally has had an overall bearing on the performance of the holding company. Over the past five years, Berkshire Hathaway Inc. (NYSE: BRK-A) has managed 14% in returns, compared to the 18% for the S&P 500. Buffett is now 90 years-old and in the process of handing the control of the company over to the younger generation. As the transition becomes more pronounced, it is expected that Berkshire Hathaway Inc. (NYSE: BRK-A) could see a fundamental shift in investment philosophy to keep with the times.

However, it is difficult to unseat Buffett as the most successful investor of all-time, given the returns he has managed for such a long time. Buffett has been an outspoken critic of hedge funds over his career and it is perhaps fitting that the fintech revolution is altering market dynamics in this regard as he comes towards the end of his career. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Warren Buffett's Most Profitable Investments of All Time
Warren Buffett's Most Profitable Investments of All Time

With this context in mind, here is our list of Warren Buffett's most profitable investments of all time. We paid special attention to the stocks in Berkshire's portfolio that have posted strong gains over the last 12 months. We also mentioned some of the most successful investments of the billionaire from his initial days in the market.

Warren Buffett's Most Profitable Investments of All Time

12. See's Candies

See's Candies is a California-based company that makes and sells different types of candies and chocolates. It is placed twelfth on our list of Warren Buffett's most profitable investments of all time. Buffett owns the firm through Berkshire Hathaway Inc. (NYSE: BRK-A). He purchased the company for around $25 million almost four decades ago. Since then, the total worth of the retailer has soared and it now rakes in close to $400 million in revenue every year.

According to Buffett, by 2018, the company had returned more than $1.6 billion in profits since the purchase. In 2019, the net income of the candy company was close to $80 million. Considering the $25 million that Buffett paid for the firm back in 1972, this represents a more than 300% return on the initial investment in profits alone. See's Candies is a typical Buffett pick with strong business fundamentals and a regular cash flow.

11. The Gillette Company

The Gillette Company is a Boston-based company that markets personal care products. It was founded in 1901 and is ranked eleventh on our list of Warren Buffett's most profitable investments of all time. Buffett bought a stake in the company in 1989 for $600 million through Berkshire Hathaway Inc. (NYSE: BRK-A), making him the owner of 11% of The Gillette Company that was increasing in value and provided a regular and sizeable dividend to shareholders.

Over the next two years, the investment that Buffett had made in the Boston firm was worth $850 million, representing an increase of $250 million. The Gillette Company also fell neatly into the Berkshire Hathaway Inc. (NYSE: BRK-A) investment model, offering a product that was a household name across the United States and offered a huge competitive advantage over other businesses in the same sector at the time. Gillette was already making over $1 billion in profits when Buffett joined.

Gillette is now owned by The Procter & Gamble Company (NYSE: PG), one of the notable holdings of Berkshire.

10. T-Mobile US, Inc. (NASDAQ: TMUS)

Number of Hedge Fund Holders: 98

T-Mobile US, Inc. (NASDAQ: TMUS) is a Washington-based mobile network operator founded in 1994. It is placed tenth on our list of Warren Buffett's most profitable investments of all time. The stock has returned more than 45% to investors over the course of the past twelve months. Buffett showed interest in the telecom last year, buying a small stake in the third quarter and increasing his holding in the fourth. Buffett’s interest in the firm might have been peaked by the merger of the firm with rival Sprint earlier that year.

T-Mobile US, Inc. (NASDAQ: TMUS) now represents 0.24% of the investment portfolio of Berkshire with more than 5 million shares worth $656 million. The stock price of the firm has soared in recent weeks as telecom stocks rally in anticipation of government spending on communications infrastructure.

Out of the hedge funds being tracked by Insider Monkey, Greenwich-based investment firm Viking Global is a leading shareholder in T-Mobile US, Inc. (NASDAQ: TMUS) with 10.2 million shares worth more than $1.2 billion.

Just like Apple Inc. (NASDAQ: AAPL), The Coca-Cola Company (NYSE: KO), and Bank of America Corporation (NYSE: BAC), T-Mobile US, Inc. (NASDAQ: TMUS) is one of Warren Buffett's most profitable investments of all time.

In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and T-Mobile US, Inc. (NASDAQ: TMUS) was one of them. Here is what the fund said:

“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where T-Mobile trailed after generating robust returns earlier in the recovery.”

9. Sirius XM Holdings Inc. (NASDAQ: SIRI)

Number of Hedge Fund Holders: 24

Sirius XM Holdings Inc. (NASDAQ: SIRI) is a New York-based broadcasting company founded in 2008. It is ranked ninth on our list of Warren Buffett's most profitable investments of all time. The company’s shares have offered investors returns exceeding 15% over the past year. Buffett first started buying shares in the company in 2016, and has trimmed his stake in the firm overall since, dumping some shares in the first quarter of 2021 as well. The firm now represents 0.10% of the total Berkshire portfolio.

Sirius XM Holdings Inc. (NASDAQ: SIRI) posted more than $2 billion in revenue for the first three months of 2021 in late April, up more than 5% year-on-year, and beating market estimates by $60 million. The earnings per share over the period were $0.07, beating market predictions by $0.01.

Out of the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in Sirius XM Holdings Inc. (NASDAQ: SIRI) with 43 million shares worth more than $265 million.

Just like Apple Inc. (NASDAQ: AAPL), The Coca-Cola Company (NYSE: KO), and Bank of America Corporation (NYSE: BAC), Sirius XM Holdings Inc. (NASDAQ: SIRI) is one of Warren Buffett's most profitable investments of all time.

8. Wells Fargo & Company (NYSE: WFC)

Number of Hedge Fund Holders: 96

Wells Fargo & Company (NYSE: WFC) is a California-based financial services company founded in 1852. It is placed eighth on our list of Warren Buffett's most profitable investments of all time. The stock has returned more than 69% to investors over the past twelve months. Buffett first started buying the stock in 2001 and increased his stake steadily over the years. However, he started dumping the shares in 2016 as the bank was hit by controversy over dubious account openings and other scandals.

Wells Fargo & Company (NYSE: WFC) now represents 0.59% of the Berkshire portfolio with more than 670,000 shares worth more than $26 million. Since late 2019, Buffett has sold more than 300 million shares in the company, turning a tidy profit but also signaling his overall bear outlook on the bank in the coming months and years.

At the end of the first quarter of 2021, 96 hedge funds in the database of Insider Monkey held stakes worth $7.4 billion in Wells Fargo & Company (NYSE: WFC) , down from 99 in the previous quarter worth $8.7 billion.

Just like Apple Inc. (NASDAQ: AAPL), The Coca-Cola Company (NYSE: KO), and Bank of America Corporation (NYSE: BAC), Wells Fargo & Company (NYSE: WFC) is one of Warren Buffett's most profitable investments of all time.

In its Q4 2020 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Wells Fargo & Company (NYSE: WFC) was one of them. Here is what the fund said:

“Detractors to performance relative to the index include financial services holdings such as Wells Fargo. While banks in general have suffered due to the recession and experienced credit losses, Wells Fargo also suffered from operational missteps. It is our expectation, however, that our bank holdings in general will benefit from stronger economic growth as the pandemic recedes; and we believe Wells Fargo in particular, will, over time, lower their costs and successfully grow their businesses.”

7. Johnson & Johnson (NYSE: JNJ)

Number of Hedge Fund Holders: 81

Johnson & Johnson (NYSE: JNJ) is a New Jersey-based company in the pharmaceutical and consumer packaging business. It was founded in 1886 and is ranked seventh on our list of Warren Buffett's most profitable investments of all time. The company’s shares have returned more than 18% to investors over the past year. Berkshire owns more than 325,000 shares in the health company worth over $53 million, representing 0.02% of its portfolio. Buffett has been slowly selling the Berkshire stake in the health firm since 2007.

Johnson & Johnson (NYSE: JNJ) is one of the best income stocks on the market with a healthy dividend history stretching back decades. The company has performed well over the past year despite the coronavirus crisis.

At the end of the first quarter of 2021, 81 hedge funds in the database of Insider Monkey held stakes worth $6.9 billion in Johnson & Johnson (NYSE: JNJ), the same as in the previous quarter worth $5.8 billion.

Just like Apple Inc. (NASDAQ: AAPL), The Coca-Cola Company (NYSE: KO), and Bank of America Corporation (NYSE: BAC), Johnson & Johnson (NYSE: JNJ) is one of Warren Buffett's most profitable investments of all time.

In its Q1 2020 investor letter, Amana Mutual Funds Trust, an asset management firm, highlighted a few stocks and Johnson & Johnson (NYSE: JNJ) was one of them. Here is what the fund said:

“Even so, Lilly stood out as one, among a handful, of companies that registered a positive return for the first quarter. In January, Lilly reported excellent fourth quarter results, with revenue growing at a faster clip than over the first three quarters of the year. Lilly is also financially strong with debt equivalent to only two times EBITDA3 and 12% of market capitalization. Johnson & Johnson, while trailing Lilly, shares many of the same characteristics and also outperformed.”

6. The Procter & Gamble Company (NYSE: PG)

Number of Hedge Fund Holders: 70

The Procter & Gamble Company (NYSE: PG) is an Ohio-based consumer goods company founded in 1837. It is placed sixth on our list of Warren Buffett's most profitable investments of all time. The stock has offered investors returns exceeding 16% in the past twelve months, Buffett first bought stakes in the firm in 2005 and subsequently increased his holdings over the years and made the consumer goods company one of his top holdings. However, Buffett started trimming his position in the company after the 2008 financial crisis.

The Procter & Gamble Company (NYSE: PG) now represents 0.02% of the Berkshire portfolio with more than 310,000 shares worth over $42 million. Although not the best investment of Buffett by any stretch of the imagination, the legendary investor has still managed a tidy profit on his initial bet on the firm.

Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Cedar Rock Capital is a leading shareholder in The Procter & Gamble Company (NYSE: PG) with 8.7 million shares worth more than $1.1 billion.

Just like Apple Inc. (NASDAQ: AAPL), The Coca-Cola Company (NYSE: KO), and Bank of America Corporation (NYSE: BAC), The Procter & Gamble Company (NYSE: PG) is one of Warren Buffett's most profitable investments of all time.

In its Q2 2020 investor letter, Distillate Capital, an asset management firm, highlighted a few stocks and The Procter & Gamble Company (NYSE: PG) was one of them. Here is what the fund said:

“P&G is an example of a stock where the free cash yield has actually improved over the course of the year on both next-twelve-month estimates and our normalized methodology.”

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Disclose. None. Warren Buffett's Most Profitable Investments of All Time is originally published on Insider Monkey.