Buffett’s Top Investments: Three Evergreens for Long-Term Investors

Warren Buffett, the legendary CEO of Berkshire Hathaway, has achieved an average annual return of nearly 20 percent since taking over the company in 1965. An investment of $100 in Berkshire Hathaway since then would have grown to over $5.6 million. Buffett’s success lies in investing in quality companies characterized by strong brands and high barriers to market entry. He consistently follows a long-term approach by investing in companies that can grow over the next decade and holding on to these winners. Berkshire Hathaway's portfolio includes a variety of stocks that meet these criteria, offering a diversified selection for investors. With a starting capital of $1,000, there are three Buffett stocks that currently present excellent buying opportunities. American Express has maintained its strong brand despite fierce competition from Visa, Mastercard, and banks that issue cards over these networks. Buffett values the brand so highly that he once remarked in an interview that while you can do many things with billions of dollars, you cannot simply instill the reputation of American Express in people’s minds. Since 1995, Berkshire Hathaway has increased its stake in American Express from $1.3 billion to $35.1 billion, a 27-fold increase. American Express benefits not only from a growing US market but also during times of inflation and higher interest rates, which boost the credit card business. Another favorite sector of Buffett is insurance. Chubb is the newest gem in Berkshire's portfolio with over 27 million shares acquired last year. Chubb stands out due to disciplined underwriting and strong cash flows, as evidenced by an impressive dividend history of 31 years of increasing payouts. The company benefits from the global economy and increasing demand, as customers seek to insure against risks such as climate disasters and cyber threats. The third recommendation is a guarantor of credit ratings: Moody's. With a market share of 32 percent, Moody's is the second-largest credit rating agency in the US. The high barriers to entry and the trust of investors make Moody's a robust company. In addition to strong business figures, the future outlook appears positive due to the recent interest rate cut by the Federal Reserve. These developments are likely to increase the demand for corporate bonds and secure a stronger position for Moody's in the capital market. However, before investing in American Express, it should be noted that The Motley Fool’s Stock Advisor analyst team considers other stocks to be better buying opportunities.