Warren Buffet criticizes spread: 5 sacred shares of the billionaire

Businessman and investor Warren Buffett has an investment portfolio worth $270 billion. It is striking that 75 percent of his portfolio consists of only five stocks.

Warren Buffett has been one of the richest people on Earth for years. He is therefore regarded by many as one of the most successful investors in the world. And anyone who looks at the value of his investment portfolio knows that he is indeed doing something right. According to the latest counts, his investment portfolio is worth 270 billion dollars (220 billion euros).

166 billion euros, about 75 percent of that, is spread over just five different stocks. Which stocks is Buffett such a fan of?

Stocks from Warren Buffett’s Investment Portfolio

We can say that Warren Buffett is an Apple fanboy. At the annual meeting of Berkshire Hathaway , compliments about Apple and Tim Cook already poured out. No less than 40 percent of the total value of the portfolio therefore consists of shares of Apple. At the end of March, his company owned $108 billion (88 billion euros) in Apple stock.

The other five major stocks in Warren Buffett’s investment portfolio are:

• Apple (40 percent of the portfolio — worth about 88 billion euros)
• Bank of America (14 percent — 32 billion)
• American Express (7.9 percent — 17 billion euros)
• Coca-Cola (7.8 percent — 17 billion euros)
• Kraft Heinz (4.8 percent — 11 billion euros)

Why so little spread?

In the past, Warren Buffett has explained several times why he does not opt for more diversification in his portfolio. For example, at Berkshire’s 1996 general shareholders’ meeting, he said diversification only protects against ignorance: “It doesn’t make much sense to those who know what they’re doing.”

Warren Buffett thoroughly researches the companies he invests in. “When someone is able to analyze companies and estimate their value, it is insane to own a large number of different stocks and put money into number 35 in their ranking of favorite companies, instead of the top favorite.”

He wrote this in a letter to his shareholders in 1993, in which he explained that too much diversification would actually damage the return. In other words, if you spread too much, you actually run more risk.

So Warren Buffett has always been a fan of a concentrated investment portfolio. But it looks like he’s going to continue this strategy. Berkshire Hathaway has recently sold shares of many different companies, including Wells Fargo and Chevron.