It's hard to call Warren Buffett anything but the king of investing. “Oracle of Omaha” Company, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) saw its shares surpass the S&P 500 up 931% since 1998. Buffett and the late Charlie Munger made this film work by focusing on quality and value. Here are three investment options from Berkshire Hathaway's portfolio that I think are long-term options for any investor.
Sometimes the simplest ways are the best ways. Everyone should have one S&P 500-focused index fund in their portfolios, and Vanguard S&P 500 ETF (NYSEMKT: VOO) fits the bill. Exchange-traded funds (ETFs) like this one focus on tracking the movement of the S&P 500. This Vanguard fund is a simple and easy way to get broad exposure to major market stocks.
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By simply investing in the market using a tool like this, investors have seen their share price nearly double over the past five years. This is perhaps the simplest, most straightforward investment strategy out there. Even the best hedge fund managers often struggle to outperform the S&P 500, and an ETF like this should be a piece of any sensible investor's portfolio.
My thesis of Moody's Corp (NYSE: MCO) it's simple. The bond credit rating business isn't going away anytime soon, and Moody's is at the very top of the food chain. It has outperformed the S&P 500 by 22% over the past five years, and by the widest margin in a long time, so Moody's makes sense. The credit rating behemoth has had a good 2024 so far, with revenue up 22% year-over-year and diluted earnings per share up 32% year-to-date in the third quarter.
For the full year, Moody's expects diluted earnings of $10.85 to $11.05 per share. Moving on to the lower end of that guideline, the stock is admittedly undervalued at more than 40 times earnings, but if you have a stable and valuable business, it's hard to ignore this stock.
American Express (NYSE: AXP) tends to offer a credit card to a high-income consumer. That means the business is likely to remain strong even if we see weak consumer trends on a broader basis.
Despite that niche advantage — or perhaps because of it — I like American Express for its strong year-to-date growth rates, and strong net profit guidance for 2024. This is a solid stock. You may not see the uncontrollable performance of something like this Nvidiabut this is a company that has beaten the S&P 500 by nearly 28% over the past five years.
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