• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

Buffett’s concentrated bets

Buffett’s portfolio held in Berkshire Hathaway’s account is notoriously concentrated in only a handful of stocks. By the end of 2023, the multinational conglomerate holding company had 41 stocks altogether, but many of these were less than 1% of the portfolio.

A jaw-dropping 50.19% of the portfolio was dedicated to just one stock: Apple. The top three stocks — Apple, American Express and Bank of America — account for 68% of the total value of the portfolio.

In a meeting with his shareholders, Buffett said this approach was valid because he was acting on professional experience and a deep conviction. “If you know how to analyze [and] value businesses, it’s crazy to own 50 stocks,” he said. “Three wonderful businesses is more than you need in this life to do very well.”

In other words, the Oracle of Omaha is confident in his ability to pick the best eggs, put them all in one basket and watch that basket closely.

However, it should be noted that Buffett isn’t as concentrated as it appears on his annual filings. That’s because he owns a wide range of other businesses, privately, inside the Berkshire Hathaway corporation.

The portfolio of private companies in this umbrella range from energy giants and insurance providers to candy factories and furniture makers.

Altogether, Buffett is actually quite well-diversified, and he recommends diversification for the ordinary investor, too.

Elevate Your Investments with Moby

Gain a competitive edge with Moby's expert investing insights. Our data-driven analysis and personalized recommendations empower you to make smarter investment decisions. Enhance your portfolio and stay ahead of market trends. Start your journey to financial success today at Moby.

Get Started

The benefits of diversification

Professional investors like Buffett, Jim Simons, David Einhorn and Daniel Loeb, have dedicated their lives to the stock game. They also have immense resources in the form of multinational corporations and an army of young talented analysts working to assist them.

In this environment, it’s easier to move forward with conviction on a handful of stocks and closely monitor every single earnings report.

However, the average investor likely has other employment that leaves little time (or energy) for such in-depth stock analysis. A dentist, plumber or high-school teacher, for example, won’t necessarily have the capacity to attend shareholder meetings and analyze earnings reports every week.

For these individuals, Buffett believes the best approach is a well-diversified passive index fund. Vanguard S&P 500 ETFs, for instance, track the performance of the underlying index and has delivered an attractive 14% compounded annual growth rate since its inception in 2010. That’s a decent return with minimal effort.

“Diversification is a protection against ignorance,” Buffett said. “I mean, if you want to make sure that nothing bad happens to you relative to the market… There's nothing wrong with that. That’s a perfectly sound approach for somebody who does not feel they know how to analyze businesses.”


This 2 Minute Move Could Knock $500/Year off Your Car Insurance in 2024

Saving money on car insurance with BestMoney is a simple way to reduce your expenses. You’ll often get the same, or even better, insurance for less than what you’re paying right now.

There’s no reason not to at least try this free service. Check out BestMoney today, and take a turn in the right direction.

Vishesh Raisinghani Freelance Writer

Vishesh Raisinghani is a freelance contributor at MoneyWise. He has been writing about financial markets and economics since 2014 - having covered family offices, private equity, real estate, cryptocurrencies, and tech stocks over that period. His work has appeared in Seeking Alpha, Motley Fool Canada, Motley Fool UK, Mergers & Acquisitions, National Post, Financial Post, and Yahoo Canada.


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.