Warren Buffett famously stated that when a strong management team has a stake in a great company, their preferred holding period should be indefinite. He focused on acquiring exceptional companies, though only a handful met his standards for investment. Berkshire Hathaway has positioned itself to endure indefinitely.
In his inaugural letter to shareholders, Greg Abel, Buffett’s successor at Berkshire, highlighted nine companies that Buffett considered essential to the company’s stock portfolio. Collectively, these stocks account for over 60% of Berkshire’s portfolio. Abel indicated that investors should anticipate minimal trading activity with these holdings. Most of the stocks mentioned align with Buffett’s past remarks, although not all do. The nine stocks Abel commits to holding indefinitely include:
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Apple is the largest marketable stock position for Berkshire Hathaway. Interestingly, in the past two years under his leadership, Buffett has sold off over 75% of his shares. Abel’s remarks in the shareholder letter suggest that this selling spree may have concluded.
Looking ahead to 2026, Apple’s lower capital demands compared to larger tech firms stand out. Major tech companies are projected to spend over $700 billion this year on AI data centers, while Apple is poised to generate upwards of $100 billion in free cash flow in the coming year.
Despite setbacks in launching an upgraded version of Siri that aims to enhance AI functions in its devices, Apple reported robust revenue growth across both its hardware and services last quarter. Notably, iPhone sales surged by 23% year-over-year, propelled by strong demand in Greater China. If the Siri overhaul succeeds, it could incite a significant upgrade cycle, making this year robust for iPhone sales.
While a forward P/E ratio of 30 might seem steep, share buybacks, solid revenue growth, and rising profit margins render the stock reasonably valued.
American Express has been a stable component of Berkshire’s portfolio for over three decades, and Abel plans to keep it for the long haul. The company is effectively implementing strategies to attract affluent consumers and small businesses through its card offerings. Last year, it revamped its Platinum Card for both consumers and businesses, which received favorable reviews despite increased annual fees. Although these fees are rising quickly, they still represent a minor fraction of the overall business. Net interest income has also risen, as AmEx is increasingly offering credit lines rather than requiring full payment on charge cards each month. Nonetheless, the bulk of its income comes from interchange fees collected from payment processors during transactions.
AmEx is well-situated to tap into the ongoing shift toward digital payments. By leveraging its flagship cards, the company aims to attract young, affluent customers who tend to remain loyal over time. This strategy enables strong operating leverage, allowing profit growth to outpace sales growth. Thus, a forward P/E of just 17 appears to be quite attractive.
Coca-Cola represents another long-term investment for Buffett. The company enjoys a significant advantage due to its global brand recognition, enabling it to raise prices in established markets, launch new products utilizing existing ones, and broaden its market reach. This results in steady revenue progression and wider profit margins.
Management has set a long-term target of mid-single-digit revenue growth, which they achieved last year with a 5% growth driven largely by price increases. Investors can expect similar growth in 2026, alongside a slight uptick in earnings per share due to improved margins and stock buybacks.
Currently trading at a forward P/E ratio of 24, the stock might seem pricey given the steady, slow-growing nature of the business. However, it’s likely that Abel has no immediate intentions to divest these shares, particularly since Berkshire has accrued $29.5 billion in capital gains on its original $1.3 billion investment.
Buffett’s unwavering support for Moody’s stems from its status as a foundational stock within Berkshire. In his letter to shareholders, Abel reaffirmed its core importance. Berkshire first invested in the company in 2000, sold off about half its stake in 2009 and 2010, but Buffett hasn’t altered his position since 2013.
Moody’s, a globally reputable credit rating agency, holds great significance for both investors and bond issuers. Investors need credible assessments to determine the relative safety of bonds issued by different companies, which Moody’s provides, creating a network effect and strengthening its moat in the investor services marketplace — a segment that contributes around two-thirds of its revenue. The remaining revenue is derived from its rapidly advancing analytics sector. Moody’s seeks to expand its market reach and services through acquisitions.
With pricing power in the ratings business and operational efficiency driving the analytics sector, Moody’s is expected to report double-digit growth in earnings per share next year. Management aims for 9% revenue growth, and the stock is priced at 28 times projected earnings, a reasonable valuation for such a company.
In 2019, Buffett and Charlie Munger made investments in five Japanese trading firms: Mitsubishi, Mitsui & Co., ITOCHU Corporation, Sumitomo, and Marubeni. Over the years, they have increased their stakes in these companies, which saw gains exceeding 10% last year.
All five operate similarly to Berkshire and Abel views them not merely as investments but also as potential partners for international ventures. They have a strong network of experts available across various sectors.
Berkshire continues to find stocks with appealing valuations. The company borrows yen equal to its initial investment, benefiting from Japan’s low interest rates while mitigating some currency risks associated with its investments. Furthermore, the dividends received from these holdings sufficiently cover the interest costs on the loans.
While Abel mentioned that other companies might evolve into core holdings, he currently plans to concentrate on reducing non-essential positions and focusing on the most significant investments in Berkshire’s arsenal.
Before you consider investing in Berkshire Hathaway’s stock, keep the following in mind:
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Greg Abel invests more than 60% of his Berkshire Hathaway stock portfolio in nine Forever stocks. Originally published by The Motley Fool.
