To The Moon

🌟🌟🌟Since 1965 Warren Buffett has been at the helm of $Berkshire Hathaway(BRK.B)$ and it has grown slow and steady over the years.  Now it is on the cusp of joining the Trillion Dollar Club as its market capitalisation has grown to USD 952.75 billion as at February 23.  Berkshire has been a strong performer in 2024, up 13% year todate.  In the past year Berkshire had gained 34.6%.

Only 4 US companies have reached the Trillion Dollar capitalisation this year - $Microsoft(MSFT)$  $Apple(AAPL)$  $NVIDIA Corp(NVDA)$  $Meta Platforms, Inc.(META)$ 

Thr next closest company to reach the Trillion Club is Eli Lilly which has USD 730.5 billion in market capitalisation.  Next to the AI revolution led by Nvidia and other tech Giants, weight loss drugs from Eli Lilly and Novo Nordisk have the potential to make a difference in our society. 

What is Warren Buffett's Winning Formula?

He believes in buying Wonderful companies at fair prices rather than Fair companies at wonderful prices.   This reflects his approach to investing and offers several key insights:

1. Emphasis on Quality - Warren Buffett believes that a wonderful company with a solid competitive advantage, sustainable business model and consistent growth and profitability is a better long term investment than a fair or mediocre company. 

2.  Fair Price - Warren Buffett does not believe in overpaying for even the best companies.  This means that investors should seek opportunities when these companies are on sale or selling below their intrinsic value. 

3.  Long Term Perspective -  Warren Buffett believes in long term investing.  This means buying quality companies which will perform well and generate returns over the years. 

4.  Competitive Advantage or Wide Moat - Wonderful companies often have a competitive advantage such as strong brand recognition, cost advantages or a loyal customer base.  These advantages can protect the company from competitive pressures and economic downturns. 

In essence Warren Buffett highlights the importance of considering both the quality of the company and the price you pay for its stock.  He believes that in the long run, investing in solid and well run businesses is more likely to lead to success.  This is the winning formula of Berkshire. 

Last Saturday Berkshire reported that Operating profit rose 28% in the 4th quarter versus the previous year, thanks to a boom in its insurance business.  Berkshire's operating earnings rose nearly 20% in the first 9 months of 2023 to almost USD 29 billion. 

Apple is Berkshire's Top holding at 50% weightage.  Apple's rise to a nearly USD 3 Trillion market capitalisation is one of the key factors behind Berkshire almost reaching USD 1 Trillion. 

Berkshire is Value Investing at its best with companies like Coca Cola and Kraft Heinz, Oil Giants like Chevron and Occidental Petroleum.  It also includes big financial companies like Bank of America and American Express. 

Berkshite's American Express holding makes up more than 8.5% of the portfolio.  This is another key reason behind Berkshire 's success.  American Express is trading near an all time high as wealthy customers continue to spend with their credit cards.  Berkshire also owns Visa and Mastercard which are also trading near all time highs. 

Investing in Berkshire Hathaway is like investing in an ETF.  Warren Buffett has an uncanny knack of choosing the best companies to buy and hold long term. 

Warren Buffett also paid tribute to his old friend and partner Charlie Munger who left a big void in Berkshire.  He said that Charlie Munger is The Architect of Berkshire Hathaway and he, Warren Buffett is just the general contractor who oversee Berkshire on a day to day basis. 

Will Berkshire Hathaway Be The Next Trillion Dollar Stock?   I believe it will.  Warren Buffett represents the Best of Value Investing.  He has been a guilding light to millions of investors around the world.  Warren Buffett has certainly made  a difference to me in how I invest and to allow the magic of compounding to do its work. 

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