To The Moon

Buffett focuses on well-run businesses with sustainable competitive advantages.

Berkshire Hathaway's three largest holdings -- Apple, Bank of America, and Chevron -- reflect this focus.

All three of these companies recently delivered strong quarterly results and should continue to win.

Buffett's three biggest positions continue to perform exceptionally well.

Warren Buffett once quipped, "Only when the tide goes out do you discover who's been swimming naked." The adage certainly seems applicable in the current market environment. Most investors perform well when the market is rising. But when the market is down, it's more readily apparent which investors have the best approaches.

We've seen some large, well-known companies deliver disappointing quarterly results in recent weeks. However, there are some noticeable exceptions that make Buffett look quite astute. You might even say that the latest earnings reports from Apple (AAPL -1.54%), Bank of America (BAC -0.39%), and Chevron (CVX 0.51%) show that the Warren Buffett way still works.

What is the Warren Buffett way?

Buffett focuses on businesses instead of stocks. The legendary investor adamantly insisted in his annual letter to Berkshire Hathaway (BRK.A -1.52%) (BRK.B -1.51%) shareholders earlier this year that he and his longtime business associate Charlie Munger "are not stock-pickers; we are business-pickers." 

He especially likes businesses that are well-run and that have sustainable competitive advantages. Buffett prefers to invest in companies that have moats -- distinct competitive advantages that enable them to flourish over the long term.

If you want examples of these kinds of businesses, just look at the top holdings in Buffett's portfolio. Apple is by far the biggest position. It's followed by Bank of America. Chevron now ranks as Berkshire's third-largest holding (including the shares owned by its New England Asset Management subsidiary).

For now, I could only afford 1 share of apple... better than nothing.

Hopefully an apple a day keeps the doctor away 😂