25 percent of Warren Buffett’s portfolio is invested in these 10 boring stocks
Buffett’s “boring stocks” include leaders in financial services and consumer goods and Japanese conglomerates. The legendary investor has always preferred companies that he understands. That means Buffett doesn’t mind owning boring stocks when they provide solid returns. Twenty-five percent of Berkshire Hathaway’s portfolio is invested in 10 boring stocks.
10 boring stocks
Here are the 10 stocks that many investors would consider at least somewhat boring.
| Share | Weight |
| American Express | 6.6% |
| Coca-Cola | 6.6% |
| Force Heinz | 3% |
| Moody’s | 2.3% |
| Mitsubishi | 1.6% |
| Mitsui | 1.3% |
| Itochu | 1.2% |
| Davita | 1% |
| HP | 1% |
| Kroger | 0.6% |
| Total | 25.2% |
Source: Berkshire Hathaway 13F
Sure, “boring” is a relative term. There are some stocks that make all 10 on the list above seem really exciting. But let’s face it: Few investors will show as much enthusiasm about these stocks as they would for a hot stock that has doubled or tripled this year.
American Express and Moody’s are not capturing the attention of up-and-coming fintech stocks. Coca-Cola, Kraft Heinz and Kroger all belong to the consumer defense sector, which is not exactly the most electrifying part of the market. Davita provides kidney dialysis services. He says.
Sure, HP is a tech stock. And tech stocks often arouse the passions of investors. However, it was a long time since anyone saw HP as they do Apple or Nvidia today.
Why Buffett likes them
But Buffett obviously likes these 10 boring stocks. Otherwise they would not have such prominent positions in Berkshire’s portfolio. But why does he like them?
Some of these stocks were not nearly as boring when Buffett first bought them. For example, he has owned Coca-Cola and American Express for decades.
More importantly, Buffett has always preferred to invest in companies that he understands. There is no doubt that he has a solid understanding of the underlying business of each company on our list.
The Oracle of Omaha also likes companies that generate relatively predictable revenues. Most, if not all, of the 10 boring stocks fall into that category.
We cannot exclude valuation. Mitsubishi, Mitsui and Itochu are the only stocks on the list that Buffett has bought this year. It is no coincidence that all three Japanese trading house stocks are trading at attractive earnings multiples. If we went back to when Buffett invested in the other seven stocks, I bet we would think they were attractively valued at that time too.
Boring can be beautiful
Buffett – like any other investor – buys stocks to make money. He doesn’t care whether a stock is “boring” if it can generate solid returns over the long term. Several of the stocks on our list have done just that.
Take Coca-Cola for example. Buffett has consistently owned shares in the beverage giant since 1988. The stock has delivered a total return of nearly 5,600% during its time in the Berkshire Hathaway portfolio.
Not all of Buffett’s boring investments have been so lucrative. As an example, he bought shares in HP in early 2022. The stock has been a loser ever since.
Still, it won’t be surprising if Buffett’s boring stocks as a group perform quite well given enough time. As Aesop noted in his famous fable, the tortoises can win races against the hares. Boring can be beautiful.
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