The billionaire and legendary investor Warren Buffett turns 91 today and in that context, Infobae reviewed what, according to the businessman, were his best bets as an investor. The son of a stockbroker, the interest in the markets and the learnings of his teacher Benjamin Graham, another legend of the markets, gave him the combination to have the knowledge and the ability to detect the best opportunities to invest. Buffett was born on August 30, 1930, in Omaha, Nebraska. His first step in making money dates back to 1950, when he decided to invest USD 9,800, which he transformed into USD 140,000 in five years. Those were big numbers for a young student.
His anniversary is a good excuse to remember the five best investments he made throughout his career, which reached a value of more than USD 170,000 million. As detailed this year before the shareholders of Berkshire Hathway, a firm of which he is president and CEO, among the bets that were most profitable in the first place is Apple in terms of market value, as Berkshire’s 5.4% stake in the iPhone maker was worth $ 120 billion at the end of 2020. “Buffett and his team put up $ 31 billion to amass the stake, meaning they made a profit of nearly 290% in less than five years.”, Explained the portal Business Insider.
“Surprisingly, Berkshire achieved its highest percentage gain in Moody’s– Buffett’s conglomerate spent less than $ 250 million for a 13% stake in the credit rating pool. Those shares were worth $ 7.2 billion at the end of December, which equates to a profit of 2,800%.“, Held.
“Never invest in a business that you cannot understand” (Buffet)
On the other hand, investment in WORLD “It was not far behind: the conglomerate invested some USD 230 million for 8.2% of the Chinese electric vehicle company in 2008, but its stake appreciated by 2,440%, reaching USD 5,900 million at the end of last year” , indicated the article.
Also, Buffett accumulated a profit of almost 1,600% in Coca Cola, where they spent USD 1.3 billion to secure a 9.3% stake in the beverage group, which last December was worth almost $ 22 billion.
Finally, the bet on American Express It also paid him extraordinary dividends: They paid out $ 1.3 billion for a nearly 19% stake in the financial services group, but the value of the position soared 1.300% to surpass $ 18 billion at the end of last year.
Some of his phrases are considered as golden rules for investors in all markets of the world:
– “Optimism is the enemy of the rational buyer.”
– “Never invest in a business that you cannot understand”
– “Always invest in the long term”
– “Look for companies with broad markets, strong brand image, and loyal consumers, such as Gillette and Coca Cola.”
– “It is not necessary to do something extraordinary to obtain excellent results”
Buffet and inflation
At Berkshire Hathaway’s 2015 shareholders meeting, Buffett was asked which holdings in his company were best suited to prosper during a period of high inflation. Buffett’s response was that the best business to own is one that does not require continuous reinvestment because it becomes more and more expensive as the value of a dollar falls.
“The best deals during inflation are the ones that you buy once and then you don’t have to keep making equity investments afterward,” Buffett said, adding that “any business with heavy capital investment tends to be a bad business to be in inflation and is often a bad business to be in general”.
Businesses such as utilities or the railways “continue to consume more and more money” and are not as profitable, he explained. You prefer to own companies with which people have a connection.
Instead, “a brand is a wonderful thing to own during inflation“Said Buffett. Of course, most day-to-day investors can’t buy an entire company, but they can buy shares in companies they like.
Owning part of “a wonderful business,” as the tycoon put it in 2009, is useful because, regardless of what happens to the value of the dollar, the product of the business will continue to be in demand.
The billionaire also said that it is especially useful to own real estate in times of inflation because the purchase is a “one-time payment” for the investor, and has the added advantage of being able to be resold.