3 Warren Buffett Stocks to Buy in December – The Motley Fool

Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
You can find lots of free investing ideas. Just look pretty much anywhere online. The quality of the suggestions you’ll find will vary quite a bit, though.
But there’s one free source of investing ideas that is definitely top tier: the quarterly regulatory filings of Berkshire Hathaway (BRK.A 0.26%) (BRK.B 0.06%). These filings reveal exactly which stocks Warren Buffett — one of the greatest investors of all time — has been buying and selling lately.
Of course, right now might not be the best time to invest in some of the stocks that Berkshire added to its portfolio years ago. However, several of his portfolio holdings are great picks that should be winners. Here are three Buffett stocks to buy in December.
No, the Vanguard 500 Index Fund ETF (VOO 0.79%) (or VOO for short) isn’t really a stock. It’s an exchange-traded fund (ETF) that tracks the S&P 500 index. But VOO is listed along with dozens of other stocks in Berkshire’s 13F filing. It’s bought and sold just like a stock. And it holds 503 stocks (some S&P 500 companies have more than one share class). My view is that if it looks like a duck, swims like a duck, and quacks like a duck, you can treat it as a duck.
In his annual letter to Berkshire Hathaway shareholders in 2013, Buffett wrote that most investors shouldn’t try to pick individual stocks. Instead, he recommended people invest in a low-cost S&P 500 fund. He also noted that in his will, he advises the trustee of his estate to invest the cash that his family inherits primarily in such index funds. And Buffett specifically suggested going with Vanguard.
I suspect that if you could ask Buffett face-to-face today where to put your money, he’d point you to the Vanguard 500 Index Fund ETF. He’d also probably tell you to keep adding to your position over time and to not sell when the stock market sinks. I can say this with confidence because it’s exactly the advice he gave to Berkshire shareholders in that 2013 letter.
Over the long run, buying and holding shares of the Vanguard 500 Index Fund ETF should generate significant returns. Buffett wouldn’t recommend that retail investors buy it if he believed otherwise.
Which individual stocks is Buffett pouring the most money into these days? Occidental Petroleum (OXY -0.38%) ranks high on the list. He aggressively bought shares of the oil and natural gas producer earlier in 2022. I think that Occidental is one of the best of the eight stocks Buffett bought in the third quarter for Berkshire Hathaway’s portfolio. 
One reason to consider buying Occidental for your own portfolio is that the stock remains attractively valued despite its huge gains this year. Shares currently trade at 5.6 times levered free cash flow.
However, I think there’s an even stronger argument in favor of buying the stock in December. Berkshire Hathaway currently owns 21.4% of Occidental, but was given regulatory approval in August to acquire up to 50% of the energy company. I fully expect that Buffett will continue to scoop up shares, pushing Occidental’s price even higher in the first half of next year.
To my knowledge, Buffett has never recommended that other investors buy Amazon (AMZN 2.14%). He also isn’t adding shares of the e-commerce and cloud hosting stock to the Berkshire Hathaway portfolio. And, while the conglomerate owns a relatively small stake in Amazon, that position was initiated by one of its two investment managers, not Buffett himself.
But I believe that now is a great time to buy Amazon stock. For one thing, Amazon’s shares have fallen by their largest percentage from their peak since the Great Recession. Although the stock might not look cheap based on commonly used valuation metrics, those metrics have never been very helpful when attempting to gauge Amazon.
The tech giant does face some challenges, including slowing revenue growth and soaring costs. However, those should be only temporary issues. The economic climate will get better sooner or later, boosting Amazon’s sales. Also, the company is cutting costs, which that should improve its profitability.
History shows that it has always been smart to bet on Amazon when its stock was struggling. And while they say that history doesn’t repeat itself, I suspect it will with this juggernaut.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Amazon, Berkshire Hathaway (B shares), and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway (B shares), and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Making the world smarter, happier, and richer.

Market data powered by Xignite.

source

Related Posts

Charlie Munger says the U.S. should follow in China's footsteps and ban cryptocurrencies – CNBC

Charlie Munger says the U.S. should follow in China’s footsteps and ban cryptocurrencies  CNBCsource

Warren Buffett's Berkshire Hathaway said to cut stake in BYD's H … – Seeking Alpha

Drew Angerer/Getty Images News Drew Angerer/Getty Images News source

Berkshire Hathaway sells $44.9 mln of shares in China's BYD – Reuters

[1/2] Berkshire Hathaway shareholders walk by a video screen at the company's annual meeting in Omaha May 4, 2013. REUTERS/Rick Wilking/File PhotoFeb 2 (Reuters) – Berkshire Hathaway, the…

Berkshire Hathaway's Charlie Munger Calls for Crypto Ban in the US – CoinDesk

Berkshire Hathaway’s Charlie Munger Calls for Crypto Ban in the US  CoinDesksource

Berkshire Hathaway sells $44.9 mln of shares in China's BYD – Yahoo Finance

HONG KONG, Feb 2 (Reuters) – Berkshire Hathaway, the investment company owned by Warren Buffett, has sold 1.55 million Hong Kong-listed shares of electric vehicle maker BYD…

Gilmour girls' basketball goes cold in loss against Hathaway Brown – chagrinvalleytoday.com

Please log in, or sign up for a new account and purchase a subscription to continue reading.Please log in, or sign up for a new account and…

Leave a Reply

Your email address will not be published. Required fields are marked *