Warren Buffett has gained a following of devoted fans throughout his years of beating the market. his company, Berkshire Hathaway (BRK.A) (BRK.B 0.07%)Not only did it beat the market, but it also performed at extreme levels; It has returned 19.8% annually since Buffett took over in 1965; In 1965, this rate was 10.2%. S&P 500.

Berkshire Hathaway has a collection of nearly 60 companies it operates, including names you may recognize like Benjamin Moore paints and Duracell batteries. He also has shares in approximately 45 stocks, including the world’s most valuable companies. Three of them have already arrived trillion dollar situationbut Buffett is holding out and expecting more. Let’s see why he has these? Let’s see if you should have one too.

1. On the never to be sold list

Apple (AAPL -1.53%) It is by far the largest holding in the Berkshire Hathaway portfolio. It accounts for 29.6% of the total portfolio, or $92.5 billion. It is the most valuable company in the world with a market value of approximately $3.5 trillion.

At the Berkshire Hathaway annual meeting in February, Buffett said Apple was a much better business than its parent companies. Coca Cola And American Express and added it to his list of stocks he would never sell.

Apparently this meant that Buffett would never actually sell out entirely, because he soon sold off a large portion of his Apple shares. It previously accounted for about half of the portfolio. Buffett clearly sees that owning Apple is still very valuable, and there are many reasons why he might have sold it, including tax benefits for the company or to get extra cash through higher interest rates.

Buffett praised Apple’s CEO: Tim Cookmany times. Excellent management is one of Buffett’s most important factors when considering buying a stock. But the main reason Buffett likes Apple is probably its enduring competitive advantage. Simply put, Apple customers are fiercely loyal. They love the differentiated technology that sets Apple apart from its peers. He suggested that iPhone users would not give up their phones for $10,000 and that fans always upgraded to the newest models.

Another thing Buffett has stated repeatedly about Apple is its stock buyback program. For example, he “applauded” share buybacks in his 2021 shareholder letter and noted how share buybacks led to an increase in share ownership in his 2022 letter.

Apple shares look expensive today, trading at 35 times trailing 12-month earnings. This is close to an all-time high. There may be a correction in the near term, but long-term investors can feel comfortable with their position in Apple shares.

2. Accidentally on the list

The next largest company in Berkshire Hathaway’s portfolio Amazon (AMZN 1.00%)It has a market value of $1.97 trillion. Amazon accounts for just 0.6% of the portfolio, or $1.9 billion.

Buffett said he missed the opportunity to buy Amazon shares and waited until 2019 to buy his first share. He explained to investors that he didn’t regret it because tech stocks weren’t in his “circle of competence.” He said it would only be a mistake if he missed most of those around him.

But in the end it wasn’t even his idea to buy it; One of the portfolio managers bought shares of the company. Buffett said he didn’t want investors to think he was experiencing a “personality change.” technology stocks.

But he has said in the past that he admires Jeff Bezos and that Amazon fits Buffett’s usual scheme of things in many ways. It has incredible brand and industry dominance in not one, but two distinct and growing industries. It’s trading near its lowest value in years and has multiple income streams.

Amazon has tons of opportunities for the future, making it a good choice for almost any individual investor’s portfolio.

3. Share buyback strategy

One stock you won’t see in the portfolio is Berkshire Hathaway itself. Berkshire Hathaway is the world’s ninth most valuable company and has fallen to $980 billion after reaching a market capitalization of $1 trillion earlier this month.

Buffett continues to invest more in Berkshire Hathaway shares than others through share buybacks. Just as Buffett praises Apple’s buybacks, he is also a staunch enforcer. Share buybacks create value for shareholders and demonstrate management’s investment in success.

The company spent $356 billion on share buybacks in the second quarter and more than $6 billion in the last 12 months. Sometimes it can be a lot more than that, but Buffett seems to have a lot of cash on hand right now.

While a share of Berkshire Hathaway Class A shares with a six-figure price tag may be out of reach for most investors, most investors can buy into Buffett’s wisdom through Class B shares.