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Yahoo
6 days ago
- Business
- Yahoo
4 Things Investors Should Do When Warren Buffett Steps Down
Legendary investor and 'Oracle of Omaha' Warren Buffett recently announced he will step down as CEO of his company, Berkshire Hathaway, at the end of 2025. Buffett has led the company for 60 years, guiding it from a struggling textile company to a huge — and hugely successful — conglomerate. Buffett built his company by relentless adherence to some basic investing principles. When he steps down, investors should continue to abide by his wisdom. Here are four things investors should continue to do when Warren Buffett steps down. Find Out: Read Next: Buffett is known for resisting the tendency to follow trends. For years, he didn't invest in tech stocks because he said he didn't understand them, although he has since bought Apple and other tech stocks. At the Berkshire Hathaway shareholder meeting in 2019, Buffett referred to his 'circle of competence,' and indicated that he primarily invested in companies within that hypothetical circle. Investors can continue to benefit from this philosophy by buying stock in companies they understand. A good place to start is by buying the stock of companies whose products you personally use. If a company solves a problem in a unique way, fulfilling a need that may otherwise go unfulfilled, it can often be a good investment. Watch Out: Buffett is a value investor, meaning he buys companies he feels are undervalued relative to others in their sector, and holds onto them until the market catches up. Finding a good company is fairly easy. You look for companies that are well-respected in the marketplace, that innovate and that are fair to their employees. But how do you know if a company's stock is available at a good price? Value investors like Buffett look at a number of fundamental metrics to determine if a company is a good value, but one of the most important is the price to earnings ratio, often called the P/E ratio. This is the relationship between the price of the company's stock compared to its earnings per share over the past 12 months. It's the amount an investor will pay for a dollar of earnings. If a company's P/E ratio is low compared to its competitors, it may be a good value, since investors are paying higher prices for similar companies. Buffett is famous for saying, 'Our favorite holding period is forever.' He will buy stocks and hold them for a long time, years or even decades. Analysts carefully watch which stocks he buys and which ones he sells as they know he is nothing if not patient. Investors can follow Buffett's path by holding on to their investments despite ups and downs. As long as the trajectory is generally up, and the fundamentals remain strong, holding on is a good philosophy. Perhaps the most well-known of Buffett's truisms, his philosophy of buying when others are selling and selling or holding when others are buying may be one of his most effective tools. It may also be the hardest to follow. Buffett has been a hugely successful investor by sticking with this philosophy, so it's hard to argue with its efficacy. But emotionally, it can be difficult to watch stocks drop and think of buying, or to hold your positions as they decline. It can also be difficult to refrain from buying when the market is on a tear. But Buffett's consistent success, decade after decade, is hard to argue with. At year end, Buffett will hand the reins over to Greg Abel, the 62-year-old current vice chairman of non-insurance operations at Berkshire Hathaway. Abel follows Buffett's philosophy closely, and it's likely the company will continue to flourish under his leadership. By continuing to adhere to Buffett's principles, your portfolio may flourish too. More From GOBankingRates Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why This article originally appeared on 4 Things Investors Should Do When Warren Buffett Steps Down
Globe and Mail
03-07-2025
- Business
- Globe and Mail
Prediction: 2 Stocks That'll Be Worth More Than Berkshire Hathaway 10 Years From Now
Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) is the largest company in the stock market not in the technology sector. As of this writing, the conglomerate led by Warren Buffett had a market cap of about $1.05 trillion -- a tremendous accomplishment for a business built on value investing principles and long-term compounding. There are nine members of the trillion-dollar club in the U.S. stock market right now (Berkshire is No. 9). But it's safe to say that over the next decade, there will likely be many companies that achieve a 13-figure valuation. For many, doing so wouldn't be too much of a stretch. For example, Walmart and Visa currently have valuations of $776 billion and $675 billion, respectively, so both could get to $1 trillion over the next decade with even modest annualized returns. On the other hand, there are some that I think have an excellent chance of getting there through excellent stock performance. Here are two in particular that would need to deliver multibagger returns to investors in order to join the trillion-dollar club, and that I feel have a strong chance of getting there. A great environment for banking? Bank of America (NYSE: BAC) has a $353 billion market cap today, and is one of the largest banks in the world. To achieve a $1.05 trillion market cap like Berkshire has, it would require the stock to average about an 11% annual gain over the next decade. This is certainly within the realm of possibilities, as I feel the conditions for the banking industry will be generally favorable -- at least for the next few years. Most economists predict that the general direction of interest rates will be lower over the coming years, and this should help boost loan demand and reduce deposit costs. Plus, the Trump administration is not only likely to generally loosen regulations going forward, but also campaigned on a 15% corporate tax rate, which would be a big benefit to Bank of America's bottom line. CEO Brian Moynihan and his team have done an excellent job of embracing modern banking technology and creating a more efficient operation, and the bank's overall efficiency and return on assets (ROA) is likely to trend in the right direction as a result. In short, a combination of excellent leadership and favorable economic and political conditions could certainly lead to a trillion-dollar valuation. One caveat is that Bank of America is one of the larger stock positions in Berkshire's portfolio, so if it performs well, it would also have the effect of raising Berkshire's market value. But even so, if the economic environment cooperates, Bank of America is a well-run institution and could certainly deliver excellent returns over the next decade. An excellent track record of outperformance Advanced Micro Devices (NASDAQ: AMD), better known simply as AMD, has performed quite well over the past few months, rebounding sharply from the April lows. But I think it's just getting started. The chipmaker has a current market cap of $233 billion, so it would need a roughly 16% annual gain over the next decade to reach Berkshire's $1.05 trillion. And I think it has an excellent shot of getting there. AMD often gets ignored by investors because it is a distant second place to Nvidia when it comes to the high-momentum data center GPU market. But there are a few things to keep in mind. For one thing, the data center accelerator market is a massive and fast-growing one, expected to reach $240 billion in global sales volume by 2030. So, even if AMD can boost its market share by just a few percentage points, it would be a big win for the company's top line. It's also important to realize that while data center chips are the fastest-growing part of the business right now, there's a lot more that AMD does. For one thing, it has steadily been taking share from Intel in the PC and laptop processor market. It also makes chips for autonomous vehicles, an area expected to grow rapidly over the next decade or so. Ever since CEO Lisa Su took the reins in late 2014, it has been a mistake to bet against AMD. During her tenure, AMD has delivered a staggering 4,180% gain for investors (about 40% annualized). While I don't exactly think that performance level will repeat itself, it wouldn't need to for AMD to reach a trillion-dollar valuation. Will these two companies join the trillion-dollar club? To be clear, I'm predicting both of these companies will have a higher market cap in 10 years than Berkshire Hathaway does today. Assuming Berkshire delivers 10% annualized returns over the next decade, which would be historically low for the conglomerate, it would have a market cap of about $2.7 trillion a decade from now, which obviously would be less likely for both of these companies to achieve (but it wouldn't be impossible). The key point is that both Bank of America and AMD have fantastic leadership and a high probability of an excellent growth environment over the next decade. Of course, there's a lot that would need to go well for either to achieve a trillion-dollar valuation within the next decade, but the risk-reward dynamics of both stocks look excellent right now. Should you invest $1,000 in Bank of America right now? Before you buy stock in Bank of America, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bank of America wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $939,655!* Now, it's worth noting Stock Advisor 's total average return is1,045% — a market-crushing outperformance compared to178%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Bank of America is an advertising partner of Motley Fool Money. Matt Frankel has positions in Advanced Micro Devices, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends Advanced Micro Devices, Bank of America, Berkshire Hathaway, Intel, Nvidia, Visa, and Walmart. The Motley Fool recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.
Yahoo
30-06-2025
- Business
- Yahoo
5 Investors Who Invest Like Warren Buffett and What You Can Learn
Warren Buffett made headlines recently when he announced he will step down from his role as Chair of the Board of Berkshire Hathaway. The legendary investor is well known for bringing his successful style to the conglomerate and making himself — and a lot of other shareholders– exceedingly rich. Read More: Try This: But Buffett is not the only investor who subscribes to the investment theories that made him rich. Here are five investors who invest like Warren Buffett and what you can learn from them. Benjamin Graham was the original value investor, and he taught Buffett. Graham is considered to be the pioneer of modern securities analysis and made a fortune buying companies that were undervalued and holding them until the market caught up. Graham espoused the wisdom of technical analysis, and famously said, 'To the extent that Wall Street gets away from book value, it is headed into potentially. Dangerous areas of thinking. It then introduces factors — chiefly the notion of increasing future earnings — which are very difficult to measure and which therefore may be badly measured.' While you obviously cannot watch Graham invest today, as he died in 1976, his book, 'The Intelligent Investor,' is required reading for any aspiring value investor. See Next: Peter Lynch managed the Fidelity Magellan mutual fund from 1997 to 1990, averaging a 29.2% annual return over that time. Lynch says the biggest mistake small investors make is that they cannot explain why they own a particular stock. In an address to the National Press Club in 1994, Lynch said, 'The single most important thing to me in the stock market for anyone is to know what you own. I'm amazed how many people own stocks; they would not be able to tell you why they own it. They couldn't say in a minute or less why they own it. Actually, if you really press them, they'll say, 'the reason is own this is the sucker is going up.'' This philosophy mirrors one of Buffett's most famous investing truisms, 'buy what you know.' Joel Greenblatt is managing partner and co-chief investment officer of Gotham Asset Management and a former professor at Columbia Business School, where he taught value investing. In his book 'The Little Book That Beats the Market,' Greenblatt outlines his stock-picking methodology. He looks at a company's return on invested capital, or ROIC, to determine whether or not the company is efficiently generating earnings from its invested capital. He also looks at earnings yield, which is the amount of earnings generated for each dollar invested in the stock (so, the inverse of the P/E ratio). Greenblatt evaluates every stock using these two metrics and chooses those with the highest combined ranking. John Templeton established the Templeton Growth fund, which boasted an average growth rate of 15% over 38 years. Templeton looked for stocks that were at their lowest point, which he referred to as 'points of maximum pessimism.' This philosophy is in line with Buffett's recommendation to 'be fearful when others are greedy, and greedy when others are fearful.' In 1939, when war broke out in Europe, Templeton bought stock in over 100 companies that were then selling for a dollar per share or less. He turned a profit on all but four of them. Money magazine called him 'arguably the greatest global stock picker of the century' in 1999. Howard Marks is the founder and co-chairman of Oaktree Capital. Marks cautions against acting impulsively as an investor. 'When there is nothing clever to do, mistakes lie in trying to do something clever.' He recommends patience and caution in investing. He also pushes back on the common belief that high risk equals high return. He said, 'High risk does not equal high return. If high risk means high return, then it's not high risk by definition. In fact, in investing, low risk equals high return.' Each of these successful investors promotes at least one of Warren Buffett's well-known nuggets of investing wisdom. But they all have something else in common with Buffett. They all know that investing success is dependent on consistently applying proven methods when evaluating opportunities. Each of these investors has made it a practice to remove emotion from the investing equation and to focus on the metrics of each potential investment. This may be the most important lesson for beginning investors to take away from these success stories. More From GOBankingRates 25 Places To Buy a Home If You Want It To Gain Value This article originally appeared on 5 Investors Who Invest Like Warren Buffett and What You Can Learn
Yahoo
29-06-2025
- Business
- Yahoo
This Ridiculously Cheap Warren Buffett Stock Could Make You Richer
Sirius XM plummeted more than 60% over the past five years, but a low P/E and high yield are just some of its compelling value features. Berkshire Hathaway has been adding to its Sirius XM stake in recent months. It now owns more than 35% of the satellite radio provider. Business is meandering for satellite radio, but the catalysts are there for a near-term turnaround. 10 stocks we like better than Sirius XM › Warren Buffett's track record shows the merit of making long-term bets on high-conviction stocks. He's the epitome of patient investing, and there's one stock his company's been buying lately that seems to be testing every investor's patience. Sirius XM Holdings (NASDAQ: SIRI) has been a market laggard. Shares of the satellite radio provider are down 16% over the past year, and off a portfolio-blistering 59% over the last five years. Despite Sirius seeming to be the equivalent of audio quicksand, Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) added to its existing stake three times over the last eight months. Berkshire Hathaway now owns more than a third of Sirius XM's outstanding shares. It's a big bet with nearly 120 million shares and a stake valued at $2.7 billion. With Buffett set to retire by the end of the year, this radio niche monopoly might even be his final big bet. Is this generation's greatest investor going out with a dud? I don't think so. Let's go over some of the reasons why this cheap and admittedly out-of-favor stock could be a big winner for your portfolio. There's no ignoring the elephant in the room. Satellite radio is experiencing a dip in popularity. This is shaping up to be the third consecutive year of declining revenue for Sirius. While it's still highly profitable, this is the fourth straight year of decelerating operating income. Sirius XM was great two decades ago for driving commuters and the automobile industry, but now the game is changing again. Younger listeners behind the wheel are turning to podcasts and cheaper music streaming apps to provide the soundtrack to their drives. Satellite radio seems to be on a gradual but definite fade out. It doesn't have to be that way. Before shifting gears to cover the potential turnaround here, check out the value. The media stock is cheap no matter where your channel surfing lands. Sirius XM is trading for just 7.7 times this year's projected profitability, and analysts see earnings per share starting to inch higher again next year. Its latest guidance suggests that this should be Sirius XM's 11th consecutive year of generating more than $1 billion in free cash flow. The cherry on top there is that the satellite radio giant is forecasting $1.5 billion in free cash flow in 2027. It's only been that high once in the last nine years. Its popularity is waning right now, but trailing revenue is just 4% below where it was when the top line peaked more than two years ago. Sirius XM also isn't afraid to eat its own cooking, reducing its share count by 48% since its 2013 peak. It's not the only way that the platform operator is returning money to shareholders. The stock's current 4.8% yield makes it one of the biggest payouts in Berkshire Hathaway's public stock portfolio. Sirius XM boosted its quarterly dividend every year since initiating a distribution policy eight years ago. Stocks are typically cheap for a reason. Now let's end on what Sirius XM can do to turn that around. Sirius XM still reaches a massive audience of 33 million accounts. Its current monthly churn rate of 1.6% is within the format's historical range. It's not the pace of cancellations that's gnawing away at Sirius XM's potential, it's the lack of new sign-ups. There are a few potential catalysts that can turn things around. Companies calling folks back in to in-office work should result in more commuters seeking seamless entertainment on congested morning and afternoon drives. U.S. gas prices in May were 12% lower than they were a year ago, so there's not an inflationary pressure point keeping folks from driving for pleasure, either. New car sales are the funnel that feeds into Sirius XM's ecosystem, and that's a problem. The average age of a U.S. passenger car is at a record 14 years. If the economy improves and financing rates come down, there's a lot of pent-up demand for new vehicle sales that should kick in. Sirius XM is also making its own luck. Howard Stern put Sirius on the map almost 20 years ago, and he is keeping the platform's core audience in place. Sirius XM is now investing in a deeper bench of trendy personalities to woo younger audiences. Ripping a page out of the Spotify playbook, Sirius XM struck deals with popular podcasters to boost listenership and engagement. It's already starting to pay off for its audience of roughly 70 million listeners across those 33 million accounts. A bright spot in its latest financial update is that podcast ad revenue surged 33% in its latest quarter. The future isn't as dreary as the bears might think here. Berkshire Hathaway's throwing more money at Sirius XM in Buffett's final year at the helm, and history should show that the generational investor went out with a bang. Before you buy stock in Sirius XM, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Sirius XM wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Rick Munarriz has positions in Sirius XM. The Motley Fool has positions in and recommends Berkshire Hathaway and Spotify Technology. The Motley Fool has a disclosure policy. This Ridiculously Cheap Warren Buffett Stock Could Make You Richer was originally published by The Motley Fool
Yahoo
26-06-2025
- Business
- Yahoo
This New ETF Promises to Help You Invest Like Warren Buffett and Yields 15%
Warren Buffett's value-driven investment strategy has long been admired by both Wall Street professionals and everyday investors. Buffett's disciplined approach has consistently outperformed the market, even as economic cycles shift and market sentiment wavers. As inflationary pressures and interest rate uncertainty continue to rattle the S&P 500 Index ($SPX), investors are increasingly turning to Berkshire Hathaway's (BRK.B) Class B shares for stability. These shares have surged 7% year-to-date (YTD), significantly outperforming the broader market. Yet for all of Berkshire's strengths, one thing it has never offered is a dividend, leaving income-focused investors on the sidelines. That's changing with the arrival of the VistaShares Target 15 Berkshire Select Income ETF (OMAH), a new exchange-traded fund launched in March 2025. OMAH not only holds Berkshire Hathaway shares but also invests in a curated selection of stocks from Buffett's own portfolio. With OMAH already attracting more than $275 million in assets under management (AUM), investors are clearly taking notice. This New ETF Promises to Help You Invest Like Warren Buffett and Yields 15% 3 Dirt-Cheap Dividend Aristocrats About to Explode Higher Buy These 3 High-Yield Dividend Stocks for Portfolio Protection Amid Israel-Iran Conflict Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. The VistaShares Target 15 Berkshire Select Income ETF gives investors a straightforward way to follow Warren Buffett's well-known investing style while aiming for a strong 15% yearly payout. The latest payout was $0.24 per share, which works out to an annual yield that's hard to find elsewhere. The fund's 30-day SEC yield is 0.69% while the yearly dividend is $0.73 per share, or a 3.83% annual yield. OMAH maintains this by putting money into the 20 biggest stocks in Berkshire Hathaway's portfolio, along with direct investments in Berkshire itself. The fund also uses an options strategy to help keep income coming in regularly. The fund's portfolio includes 73 holdings total, each chosen to match Buffett's approach. The top 10 make up a large part of the fund, including Apple (AAPL) at 10.5%, Berkshire Hathaway (BRK.B) at 9.76%, and American Express (AXP) at 8.74%. Other major allocations include Coca-Cola (KO) at 6.03%, Bank of America (BAC) at 5.57%, Occidental Petroleum (OXY) at 4.94%, Chevron (CVX) at 4.99%, Kroger (KR) at 4.87%, VeriSign (VRSN) at 4.61%, and Chubb (CB) at 4.5%. This lineup allows investors a simple way to have pieces of the same companies Buffett owns, all in one fund. Despite a solid setup, OMAH's price has remained relatively stable since its launch. OMAH is down 3.2% over the last three months. It's also down 1.8% in the past month. This kind of movement is pretty normal for new funds that use options to boost income. That said, OMAH has quickly built up a strong presence, holding $276.7 million in assets as of June 22, with 14.5 million shares on the market. Its 30-day median bid-ask spread is just 0.05%, which means it's easy to trade and there's plenty of interest from buyers and sellers. All of this comes with an expense ratio of 0.95%. While this is higher than what you'd pay for a basic index fund, it's in-line with other funds that use active management and options, and it covers the work needed to meet OMAH's income and growth goals. The way different market factors are coming together right now puts OMAH in a strong spot to deliver on its goal of a 15% yearly payout. As markets deal with more ups and downs and more investors look for ways to earn steady income, OMAH's approach fits well with what people want today — and could help it do even better in the near future. The fund's launch in March 2025 lined up well with a stretch when options-based income strategies started to shine. The S&P 500 has seen big swings this year, from a high of $6,147 in February to a low of $4,835 in April. This has made it a good time to collect options premiums. OMAH's options strategy is built for this kind of market, letting the fund earn extra income from selling covered calls while still holding onto its main stocks that follow the Berkshire model. Across the ETF world, more money is flowing into funds that use covered calls and other income strategies. U.S. derivative income funds brought in over $6 billion in May, the biggest monthly increase ever. Investors clearly want protection from losses and regular payouts. Experts point out that covered-call funds often do better than regular stock funds when markets are flat or only moving up a little because they collect income from selling options. With OMAH's focus on writing covered calls on a tight group of Buffett-backed stocks, the fund is set up to collect option premiums that can help smooth out market bumps and boost overall returns. If you're looking for a way to tap into Warren Buffett's legendary investing approach while pocketing a steady stream of high-yield income, OMAH brings something genuinely fresh to the table. With its blend of blue-chip Berkshire-inspired holdings and a data-driven options strategy targeting a 15% annual distribution, this ETF is engineered for both resilience and reward, even in today's unpredictable market. For investors who want to 'invest like Buffett' but also crave monthly cash flow, OMAH is a modern solution that makes classic value investing feel brand new. On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. 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