S&P 500: Warren Buffett makes all his money in just 11 stocks

Warren Buffett is having a better year than most S&P 500 investors. And it can thank a handful of stocks for that.


A total of 11 stocks Berkshire Hathaway‘s (BRKB) new reporting portfolio of 50 US-listed companies, incl Occidental Petroleum (OXY), Chevron (CVX) and McKesson (MCK) – has risen this year, says an Investor Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That means only 22% of its stocks have gained in this difficult year for the S&P 500.

It’s not a perfect performance. That’s a lower hit rate than the S&P 500, where 27% of stocks in the index have advanced this year. But the fact underscores just how important Buffett’s runaway winners have been this year. Berkshire Hathaway shares are down 2.5% this year, while the S&P 500 is down 17%.

The Source of Most of Buffett’s Big Profits

If you’re losing money on three-quarters of your holdings but still outperforming the market like Berkshire Hathaway did this year, it pays to see what’s working well.

And for Buffett, there’s no question what it is: energy. Both of Buffett’s top holdings this year come from the energy sector. And the energy sector is the only one of the 11 S&P 500 sectors to rise this year.

Energy is the third largest sector weight in Buffett’s portfolio at 13%. In contrast, energy makes up just 5% of the S&P 500, ranking it eighth among all sectors. And that’s enough to offset Buffett’s two biggest individual bets. apple (AAPL) and Bank of America (BAC), both down about 16% this year.

Looking at Buffett’s Big Winners

Some of Buffett’s power stocks have also been absolute home runs. Houston-based energy explorer Occidental Petroleum is Buffett’s top holding this year, up more than 142%. That was a pretty good call, undermining the Energy Select Sector SPDR ETF (XLE)’s 64% gain.

And he is aggressively adding to the position. With a portfolio position of $14.5 billion, Occidental is now Buffett’s sixth-largest bet. It’s behind perennial favorites like her Coca Cola (KO), this year also increased by about 2%.

Berkshire Hathaway currently owns more than 21% of Occidental.

One of Buffett’s huge winners is an energy play: Chevron. Shares are up more than 54% this year. Buffett also made a big bet on it and increased the benefit. Berkshire Hathaway’s stake in the company is valued at $31 billion, making it the 3rd largest position in its portfolio.

Buffett’s winners: More than just energy

That’s not to say energy is the only reason Buffett had a better year than the S&P 500. McKesson, which caters to the pharmaceutical industry, has seen its stock rise more than 46% this year. At a position size of $1.1 billion, it’s not a big bet for Buffett’s Berkshire Hathaway, but it’s not a small one either.

And Buffett remains committed to the telecom stock T-Mobile USA (TMUS) after finally throwing in the towel on his opponent Verizon (VZ). And that’s a good thing. Shares of T-Mobile — Buffett is still a relatively small investor, with less than 1% of its shares outstanding — are up more than 27% this year.

But it’s important to note that it’s difficult to judge Buffett’s record on the basis of just one year — no matter how dramatic a year.

“You want to know why (Buffett) one of the richest people in the world? In part, of course, he has accumulated a high rate of money,” said Empire Financial Research’s Whitney Tilson. “But most people don’t fully appreciate the second, equally important part of the equation: He’s been doing it for a long time. time.”

But it’s still worth noting what worked in such a year for the world’s most famous investor.

Warren Buffett’s best stocks this year

Best performing stocks in Berkshire Hathaway’s portfolio

Company Symbol Year-to-date change Sector
Occidental Petroleum (OXY) 143.6% Energy
Chevron (CVX) 55.8 Energy
McKesson (MCK) 46.1 Healthcare
T-Mobile USA (TMUS) 27.5 Communication services
Globe Life (GL) 20.1 Finance
Activision Blizzard (ATV) 11.0 Communication services
Kroger (KR) 6.0 Consumer basics
Kraft Heinz (KHC) 5.2 Consumer basics
Coca Cola (KO) 2.1 Consumer basics
Johnson & Johnson (JNJ) 1.9 Healthcare
Markel (MKL) 1.7 Finance
Sources: S&P Global Market Intelligence, IBD

Follow @ Matt Krantz on Twittermattkrantz


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