Warren Buffett once famously stated that his "favorite holding period was forever." However, even a cursory examination of Berkshire Hathaway's (BRK.A -2.20%) (BRK.B -2.03%) portfolio changes through the years will show that Buffett doesn't hold most stocks as long as he said he prefers.
Buffett's reluctance to hold onto stocks indefinitely is explained further in his 1988 letter to Berkshire Hathaway shareholders. He specified that his commitment to holding a stock for the long term is reserved exclusively for "exceptional businesses with exceptional management."
Which stocks fit that high standard? Buffett has addressed this question directly. Below is a list of every stock that Buffett has indicated he would hold almost indefinitely.
1. Coke
Buffett sang the praises of The Coca-Cola Company (KO -1.04%) in his 2023 letter to Berkshire Hathaway shareholders. Berkshire has owned shares of Coca-Cola longer than any other stock. It's now the conglomerate's fourth-largest holding.
In his 2024 letter to shareholders, Buffett reiterated his thoughts on Coca-Cola, stating, "Once you discover a genuinely exceptional business, hold onto it." He also mentioned that this stock was one of several he anticipated would be "held for the long term."
2. Amex
Buffett also lauded American Express (AXP -3.15%) in the 2023 and 2024 letters to Berkshire Hathaway shareholders. His comments about sticking with a "truly wonderful business" and owning indefinitely applied to both Coca-Cola and AmEx.
Similar to Coca-Cola, American Express has been a staple in Buffett's portfolio for many years. While he hasn't made any new purchases of the financial services company in quite some time, it remains Berkshire's second-largest investment, valued at almost $46 billion. Remarkably, the original investment was just $1.3 billion.
3. Occidental Petroleum Corporation
In that 2024 shareholder letter, Buffett expanded the list of stocks he planned to own practically forever. Occidental Petroleum (OXY 0.21%) was the first stock he mentioned. After several years of Buffett aggressively buying the stock, Occidental is now Berkshire's sixth-largest holding.
Buffett explained why he favors Occidental so much, stating, "We particularly like its vast oil and gas holdings in the United States, as well as its leadership in carbon-capture initiatives, though the economic feasibility of this technique has yet to be proven." Keeping with his principle that forever stocks should have outstanding management teams, he applauded the leadership of Occidental CEO Vicki Hollub.
4, 5, 6, 7, and 8. The five major trading companies in Japan, known as Sogo Shosha.
I’ve categorized the following five stocks as Buffett often discusses them together. These are the five Japanese sogo shosha (trading companies) that Berkshire started investing in during 2020:
- Itochu (ITOCF -5.14%) (ITOCY -5.21%)
- Marubeni (MARUY -3.84%)
- Mitsubishi (MSBHF 0.79%)
- Mitsui (MITSY -5.43%)
- Sumitomo (SSUM.Y -4.48%)
While these Japanese stocks don't represent significant holdings for Berkshire, Buffett appreciates their "shareholder-friendly policies." He also pointed out that these firms exhibit a high level of diversification, much like Berkshire itself.
9. Apple Inc.
Surprisingly, Buffett didn't mention Apple (AAPL -2.41%) as one of the stocks he expected to own indefinitely in the 2024 shareholder letter. CNBC's Becky Quick asked him about the omission in Berkshire's annual shareholder meeting in May. He clarified, saying that Apple is "an even better business" than Coca-Cola and would remain in Berkshire's portfolio along with AmEx and Coke "unless something really extraordinary happens."
I believe that serves as a compelling endorsement for adding Apple to the roster of Buffett's long-term investments. While it's true that the iconic investor reduced Berkshire's investment in Apple last year, it still stands as the conglomerate's most significant asset, accounting for 24.6% of its equity portfolio.
What can you tell me about Berkshire Hathaway?
Here's an even more astonishing revelation: Berkshire Hathaway is not included in the roster of stocks Buffett claims he would hold for nearly eternity. Naturally, Berkshire stands apart as a unique entity for the "Oracle of Omaha" and undoubtedly represents his main forever investment. Certain truths are so evident that they require no explanation.
