My Best Warren Buffett Stocks to Buy Right Now | Smart Change: Personal Finances

(Chuck Saletta)

Investing is hard enough in normal times. When volatility soars, inflation is high, and the economic future looks incredibly uncertain, investing becomes much more difficult for most of us mere mortals. At times like these, turning to Warren Buffett – easily among the greatest of all living investors – for inspiration can be a great way to keep investing despite these challenges.

Buffett has built his fortune over decades buying companies that generate cash – lots of cash. Buffett’s picks aren’t usually the fastest growing companies, but their ability to make money in good times and bad makes them worthy of consideration in times like these. With that in mind, there’s one Warren Buffett stock that stands out as my absolute top to consider buying right now: Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B).

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What’s so special about Berkshire Hathaway?

Alone among Buffett’s stock picks, Berkshire Hathaway is the one that can count him as an employee. As CEO of the company, Buffett directs both the operations of the company and the investment of all the money it generates. And that makes it center of all Buffett-related investment activities.

With an investment in Berkshire Hathaway, you get Buffett’s only choice that also gives you access to the insurance business the company controls, as well as the legion of subsidiaries it owns. Your participation provides you with all of this, plus the benefits that come with Buffett and his designated successors controlling the investment of excess cash generated by these businesses.

You don’t just get access to Buffett’s investments by buying Berkshire Hathaway stock, you also get them at a remarkably low cost. The company trades at around 1.2 times its book value. Essentially, that basically means that if you wanted to put the company together yourself from its component parts, it would cost you almost that much, and you wouldn’t get Buffett as part of this deal.

This combination of factors adds up to make Berkshire Hathaway my best Warren Buffett stock to consider buying now.

Is there a downside?

That said, there is some risk associated with owning Berkshire Hathaway. First and foremost, the company is virtually synonymous with Buffett, as he has run the company for more than half a century. Buffett is over 90, so his tenure as head of Berkshire Hathaway is closer to the end of his tenure than the beginning. There is a risk that when Buffett resigns or dies, Berkshire Hathaway shares could fall in fear of the unknown.

Additionally, unlike many of Buffett’s investment choices, Berkshire Hathaway does not pay a dividend. As a result, the only way for shareholders to actually benefit from any rewards they might see as owners is if they are willing to sell at least some of their stakes. That’s a little strange for a company known for being defensive and cash-rich – and not among the fastest growing in the market.

All in all, it’s a great company, despite these drawbacks

Ultimately, no investment is perfect, not even Berkshire Hathaway. As a result, while this is my primary Warren Buffett stock to consider buying right now, it is the one that best fits into an overall smart asset allocation strategy. By holding it as part of this overall strategy, you can give yourself the best chance of balancing the risks and rewards of being a shareholder in the context of your overall portfolio.

Of course, a smart global allocation strategy is a strategy that takes time to implement. So jump in now and put yourself in a place where you can own a piece of this great Buffett business with him at the helm.

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Chuck Saletta has no position in the stocks mentioned. The Motley Fool holds positions and recommends Berkshire Hathaway (B shares). The Motley Fool recommends the following options: $200 long calls in January 2023 on Berkshire Hathaway (B shares), $200 short puts in January 2023 on Berkshire Hathaway (B shares) and short calls of $265 in January 2023 on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

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