Latest news with #BerkshireHathaway
Yahoo
3 hours ago
- Business
- Yahoo
Charlie Munger Turned $1,000 Into Over $1 Million — And Made His Unemployed Friend Rich Too: 'Trouble With That Story Is It Only Happened Once'
What do you get when you mix $1,000, an unemployed golf buddy, and Charlie Munger's brain? Apparently, a passive income stream that lasted decades. No hedge fund, no Wall Street pitch deck — just Munger, long before his Berkshire Hathaway days, spotting a scrappy oil royalty deal and turning it into one of the most quietly outrageous investments of his life. And the best part? He didn't go it alone — he brought his unemployed friend along for the million-dollar ride. Back in 1962, Munger was still practicing law in Los Angeles when he met Al Marshall, an out-of-work oil industry worker trying to buy mineral rights at auction. Don't Miss: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Hasbro, MGM, and Skechers trust this AI marketing firm — Munger, seeing the flaws in Marshall's strategy but liking the bones of the deal, decided to go in with him. Each put up $1,000 and bought into oil royalties through what was then a legal tax shelter known as an AB trust, which was later outlawed. And the returns? Straight-up legendary. "Fifty years later we were getting $100,000 a year on that investment," Munger told the crowd at the 2016 Daily Journal shareholder meeting. "The trouble with that story is that it only happened once." He delivered it with a chuckle, but the message was clear: not every great investment is repeatable — which is exactly why you act when you spot one. Munger touched on the story again during his final Daily Journal meeting in 2023, a full-circle moment near the end of his career, where he once more emphasized the rarity of those life-changing opportunities. Trending: Maximize saving for your retirement and cut down on taxes: . The story is backed by Janet Lowe's 2000 biography "Damn Right!," where Marshall said, "We only put up $1,000 each, and we've each probably made a half a million out of it." He added, "I'm still getting $2,000 to $3,000 a month from that," confirming the checks were still rolling in decades later. That's right — from a $1,000 investment, Munger's family was still cashing royalty checks well into the 21st century. All from a single, overlooked opportunity. Of course, Munger never sugarcoated it. "The trick in life," he told that 2016 crowd, "is when you get the one, or two, or three [big opportunities] that your fair allotment for a life is — that you've got to do something about it." And if you're still grinding toward that first big win? He had advice for that, too: "The first $100,000 is a b*tch, but you gotta do it." Hard work. A sharp eye. A little luck. And when the rare opportunity does show up? Move fast — because even for Charlie Munger, it only happened once. Read Next: Here's what Americans think you need to be considered Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Charlie Munger Turned $1,000 Into Over $1 Million — And Made His Unemployed Friend Rich Too: 'Trouble With That Story Is It Only Happened Once' originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
Yahoo
7 hours ago
- Business
- Yahoo
47% of Berkshire Hathaway's $276 Billion Warren Buffett-Led Portfolio Is Invested in 3 Dividend Stocks
Apple has developed an ecosystem of tech devices that its customers love and are willing to trade up to have. American Express has numerous earnings streams, and a younger cohort of cardholders is driving growth. Coca-Cola's business has proven resilient under pressure, and it reliably boosts its dividends. 10 stocks we like better than Apple › When Warren Buffett steps down as the CEO of Berkshire Hathaway at the end of this year, he will leave behind a legacy as perhaps the greatest investor of his time. As of the end of 2024, Berkshire Hathaway stock had gained an astounding 5,502,284% since Buffett took it over, and one way he turned it into a trillion-dollar company was by investing not in hot growth stocks, but strong value stocks. One feature Buffett loves in a stock is a dividend. Paying dividends suggests a company is mature, stable, and committed to rewarding shareholders -- all attributes that reinforce an investment thesis. Not all of the stocks in Berkshire Hathaway's $276 billion equity portfolio pay dividends, but most do. Its top three holdings -- Apple (NASDAQ: AAPL), American Express (NYSE: AXP), and Coca-Cola (NYSE: KO) -- all do, and together, they account for almost half of the portfolio. Let's consider what makes them such winners by Buffett's standards. Buffett only started a position in Apple in 2016, but it quickly moved into the top spot in the portfolio, reaching about 50% before Buffett and his team started selling some of it off last year. It now takes up a more reasonable amount of space, but it's still the largest position. Buffett said that Apple is an even better business than his perennial favorites, Coca-Cola and American Express, and he jested that CEO Tim Cook has made Berkshire Hathaway a lot more money than he ever has. Apple fans love its user-friendly, innovative, and tech-strong products, and it has created an ecosystem of devices and services that work together, generating loyalty and additional sales. Shoppers typically upgrade over time to newer versions of their favorite products, keeping them in the ecosystem. Like many tech giants, Apple is investing in artificial intelligence (AI), and it's developing its exclusive brand, Apple Intelligence, that offers a premium experience as part of the Apple package. Management expects AI to be an important growth driver for the next generation of Apple products. Investors have been worried about how tariffs will impact Apple's business, because iPhones are largely made in China, but management is working on long-term efforts to move more of its production to other countries to mitigate the impact of that part of the trade war. Apple's dividend doesn't have a particularly high yield -- at 0.5%, it's well below the average yield for the S&P 500. However, management has been hiking the payout slowly and steadily every year for more than a decade, demonstrating its commitment to rewarding shareholders. Buffett loves financial stocks, but American Express is his favorite. He appreciates its global brand and excellent management, and he tends to favor companies with varied earnings streams. As a bank that targets more prosperous individuals and small businesses, as well as a credit card network with fee-paying customers, American Express has several levers it can push to make money, and its excellent reputation and premium products attract affluent consumers whose finances tend to be more resilient even when the broader economy is under pressure. It has successfully captured a younger cohort of consumers who are driving its growth today and represent its future potential. Millennials and Gen Z customers accounted for 35% of its total U.S. consumer services billed business in the first quarter, and sales from that cohort increased by 14%, in comparison with a 7% overall gain. American Express continues to generate robust sales growth despite the challenging macroeconomic environment. Sales rose 8% year over year in the first quarter (on a currency-neutral basis) and earnings per share (EPS) rose 9% to $3.64. Delinquency ratios have stayed at 1.3%, with net write-offs at 2.1%.CEO Stephen Squeri credited that to the company's stellar risk management, which it has developed over its 150 years of operation, and its high-quality customers. American Express' dividend yields 1% at the current share price, and it's growing and reliable. Coca-Cola stock is currently the longest-tenured holding in Berkshire Hathaway's portfolio, and it's crushing the market this year. Investors consider it a safe stock because the company sells some of the world's favorite beverages, and people will continue to drink them even in times of economic uncertainty. With a portfolio of about 200 brands, it has something for everyone, although its core Coke-branded franchises drive its high sales. It has demonstrated strength over the past few years despite economic volatility, and after restructuring and slashing the brand portfolio from about 400 brands pre-pandemic, it has become more efficient and agile, and better able to weather the current storms. One factor that particularly favors Coca-Cola this year is that it has limited exposure to tariffs. Most of its products are produced and bottled in or near the countries in which they are sold, so it doesn't rely as much on imports or exports. CEO James Quincey said that the impact of new tariffs would be minimal and that the company has many ways to offset those higher costs. This is how investors can test the company's resilience, and it's a manifestation of what Buffett has long praised it for. The dividend is a major part of that, too. Coca-Cola is a Dividend King with 63 years of consecutive payout increases, a streak that's hard to top. At the current share price, the dividend yields 2.7% -- more than double the S&P 500's average yield. Coca-Cola isn't a growth stock, but it offers incredible value, reliable passive income, and protection for challenging times. Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 American Express is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express and Apple. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy. 47% of Berkshire Hathaway's $276 Billion Warren Buffett-Led Portfolio Is Invested in 3 Dividend Stocks was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10 hours ago
- Business
- Yahoo
Investing for Passive Income: The Power of Dividend Stocks
Dividend stocks can provide investors with a growing stream of passive income. Warren Buffett's investment in Coca-Cola showcases the power of dividend growth. Realty Income has lived up to its name over the years. 10 stocks we like better than Coca-Cola › There are a multitude of ways to make passive income through investing. You can buy a rental property, invest in fixed-income instruments like bonds, sell options like covered calls, or buy dividend stocks. Each method has its benefits and drawbacks, including the level of investment and activity required to generate passive income and the risk profile. Of all those options, investing in dividend stocks is one of the most powerful ways to generate passive income. That's because many companies increase their dividends at least once each year. As a result, you can collect a steadily rising income stream, which isn't as easy to achieve with those other strategies. Here are two examples of the power of investing in dividend stocks for passive income. Warren Buffett's company, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), has famously avoided paying dividends over the years, preferring to retain its earnings and reinvest that cash. One thing Buffett's company likes to invest in is dividend stocks. Berkshire holds several of them in its investment portfolio. Among the most notable is Coca-Cola (NYSE: KO). The beverage giant is a dividend machine. It has raised its payment for 63 straight years, including by 5.2% in February. It paid its investors $8.4 billion in dividends last year and over $93 billion since 2010. Buffett's company has collected dividend income from Coca-Cola for over three decades. Berkshire invested about $1.3 billion in the beverage stock between 1988 and 1994. Today, those shares are worth a staggering $28.4 billion. On top of that, Berkshire has collected an estimated $11.5 billion in dividend income over the years from the stock. The 400 million shares it owns today entitle it to receive over $800 million in dividend income each year, up from $75 million annually in 1994. That gives Berkshire a yield on cost of over 60%. Berkshire's purchase of Coca-Cola showcases the power of dividend stocks to produce passive income if you hold them over the long term. Realty Income (NYSE: O) has built a brand around providing its investors with passive income. The real estate investment trust (REIT) has a clear mission: "To invest in people and places to deliver dependable monthly dividends that increase over time." It's so focused on that income mission that the REIT calls itself The Monthly Dividend Company. Realty Income has certainly lived up to that name over the years. It has paid 659 consecutive monthly dividends since its formation. The REIT has increased its payout 130 times since its public market listing in 1994, including for the last 110 quarters in a row. Overall, it has grown its payout at a 4.3% compound annual rate over the past three decades. That dividend growth has really added up over the years. Here's a look at how much dividend income an investor would have earned from this REIT if they bought 1,000 shares a decade ago: As that graphic shows, an investor who purchased 1,000 shares of the REIT a decade ago would have collected $2,201 in dividend income during their first year of ownership. That's a 4.6% yield on their initial cost ($47,710). The REIT has increased its dividend by 46% over the past decade. Because of that, the investor is now collecting $3,222 of dividend income each year from their initial investment (a 6.8% yield on their cost). Further, they've accumulated a total of $30,159 in dividend income from their investment over the past decade (63% of their original investment). They also hold shares that are now worth 22% more than their initial investment. The REIT's income stream will likely continue to rise in the future as it grows its portfolio of income-generating real estate. Investing in dividend stocks is a powerful way to generate passive income. The best ones steadily increase their dividends. That enables their investors to collect more passive income each year without having to do more work or invest more money. Because of that, if you want to generate passive income, you should own some high-quality dividend stocks like Coca-Cola and Realty Income. Before you buy stock in Coca-Cola, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Coca-Cola wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Matt DiLallo has positions in Berkshire Hathaway, Coca-Cola, and Realty Income. The Motley Fool has positions in and recommends Berkshire Hathaway and Realty Income. The Motley Fool has a disclosure policy. Investing for Passive Income: The Power of Dividend Stocks was originally published by The Motley Fool
Yahoo
10 hours ago
- Business
- Yahoo
3 things Warren Buffett looks at when hunting for shares to buy
The investment track record of billionaire stock-picker Warren Buffett is incredible. But his approach to buying and holding shares in large, proven, well-known companies is in fact a fairly simple one. Like many private investors, some of what I do myself is inspired by Buffett, albeit on a much smaller scale. Here are three things Buffett considers when looking at shares. Even a good business can have a bad year and swing from a profit to a loss. Over the long run though, Buffett's interest has mostly been in buying shares in companies that have already proven themselves profitable and look set to keep generating profits consistently. That means it is important to understand how a business works. It is also important to get to grips with its financial situation. For example, a company can be profitable at the operating level but so laden with debt that it loses money overall. So it is important to understand what a business does, how that makes money, and whether making money operationally means the company can make money overall. Buffett sticks to what he knows when investing – he calls this his 'circle of competence'. In his opinion, it is unimportant how wide or narrow an investor's competence circle is. The important thing is that they recognise it and avoid the temptation to stray beyond it. Buffett has invested in plenty of capital-intensive industries that need new equipment on a regular basis, from power stations to train lines. But, by contrast, a lot of the shares he has bought are in companies that are able to 'sweat their assets' long after they have been paid for. Coca-Cola (NYSE: KO) is a good example. The soft drinks maker has spent decades investing heavily in building its brands. Sales today are benefitting from investments the company made decades ago. In fact, even if Coca-Cola never spent another penny on marketing, I think its brands would retain substantial appeal for consumers for decades to come. The economics of such a business can be appealing, because they are not heavily reliant on large, recurring capital expenditure. Buffett sometimes watches a company for decades before investing in it. With others, such as Coca-Cola, he builds a stake then does nothing. Buffett remains a large investor in the business – but he has not bought a single Coca-Cola share since the 1990s. The master investor still holds a large Apple stake – but has sold a lot of Apple stock over the past couple of years. Why? We do not know for sure. But what is clear is that Buffett does not just want to buy into great businesses – he wants to do so at an attractive share price. Coca-Cola shares are far costlier now than when Buffett bought his. But the company faces more competition, from niche start-ups to a tidal wave of drinks that emphasise their health benefits compared to sugary sodas. That is a risk to Coca-Cola's future profitability. Like Buffett, I think Coca-Cola has a very strong business – but have no plans to invest at its current share price. The post 3 things Warren Buffett looks at when hunting for shares to buy appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Yahoo
12 hours ago
- Business
- Yahoo
Warren Buffett Holds Apple Stock Despite Tariffs and Buys a Restaurant Stock Up 4,500% in 15 Years
Warren Buffett's Berkshire Hathaway continued to hold Apple and added to its stake in Domino's Pizza in the first quarter. Apple stock looks expensive with earnings increasing just 8% in the second quarter, and tariffs could slow profit growth even further. Domino's Pizza missed its medium-term guidance in the first quarter, and the stock trades at an expensive valuation. 10 stocks we like better than Apple › Warren Buffett manages the vast majority of Berkshire Hathaway's stock portfolio, and the company made interesting capital allocation decisions concerning Apple (NASDAQ: AAPL) and Domino's Pizza (NASDAQ: DPZ) in the first quarter. Berkshire continued to hold 300 million shares of Apple. The stock currently accounts for more than 20% of its portfolio, the largest position by a wide margin, which is somewhat surprising, given the uncertainty surrounding tariffs. Berkshire bought 238,613 shares of Domino's Pizza, a restaurant stock up 4,500% in the last 15 years. Domino's was one of only seven stock purchases that Berkshire disclosed in the first quarter, but it still accounts for less than 1% of its portfolio. Here's what investors should know about Apple and Domino's Pizza. Apple reported decent financial results in the second quarter of fiscal 2025, which ended in March. Revenue rose 5% to $95 billion, as double-digit growth in services sales offset sub-2% growth in iPhone sales. Generally accepted accounting principles (GAAP) earnings increased 8% to $1.65 per diluted share as the company continued to repurchase stock. But CEO Tim Cook warned visibility beyond June was limited due to tariffs. The investment thesis for Apple centers on its leadership in global smartphone sales and its strong presence in other consumer electronics markets, including personal computers, smartwatches, and tablets. But devices are only half the equation. Apple must monetize its installed base (which exceeds 2.35 billion devices) with services like App Store fees and advertising, iCloud storage, Apple Pay, and subscription products like Apple TV+. The company is executing fairly well on that strategy, but some investors are worried about its ability to monetize artificial intelligence (AI). Apple Intelligence -- a suite of generative AI capabilities -- has fallen flat with consumers since its introduction in October. The iPhone upgrade cycle many analysts predicted never materialized. And Apple has delayed what might have been the most exciting features: an improved version of conversational assistant Siri. Apple Intelligence is currently free, but many analysts expect the company to monetize the platform eventually, possibly by charging a fee for the most sophisticated features. But that future still seems far away. And with smartphone sales forecast to increase at 4% annually through 2029, Apple's revenue growth is unlikely to be much better, at least in the near term. Meanwhile, the company faces a potentially serious threat in recent changes to U.S. trade policy. The Trump administration may have reduced the tariffs on goods imported from China, which is where most iPhones are manufactured, but the president also threatened Apple with a 25% tariff if it chose to make iPhones in India rather than the United States. Personally, I doubt President Trump will follow through on that threat, but Apple's future is still clouded by uncertainty. Can the company effectively monetize AI? To what extent will tariffs hurt profits? Not knowing the answer to those questions is a problem, especially when shares trade at 31 times earnings and earnings only increased 8% in the last quarter. I think prospective investors should avoid the stock for now. However, current shareholders with confidence in Apple can follow Buffett's lead and stay invested, provided they are comfortable with the risks the company is facing. Domino's reported mixed first-quarter financial results. Revenue increased 2.5% to $1.1 billion, which narrowly missed the consensus estimate. But GAAP net income increased 21% to $4.33 per diluted share, beating the $4.07 per diluted share Wall Street expected. Despite mixed results, the company gained market share across its U.S. and international stores, according to CEO Russell Weiner. The investment thesis for Domino's centers on scale and operational excellence. It is the largest pizza company in the world. And its history of technology and menu innovation, coupled with its effective use of promotional cycles, makes me think the company can maintain or even expand its leadership in the coming years. To elaborate, Domino's uses artificial intelligence and robotics to improve efficiency across its business. It produces dough in a centralized facility equipped with robots to control costs and maintain a consistent customer experience across stores. It also uses AI to visually inspect orders and surface insights from user comments on social media. Domino's introduced its "Hungry for More" strategy in 2023. The framework targets three outcomes through 2028: 7% annual sales growth, excluding the impact of foreign currency; 8% annual operating income growth; and 1,100 annual store openings. The company fell short in the first quarter: Sales increased less than 5% excluding foreign currency impact, operating income was flat, and Domino's actually closed a net total of eight stores. Wall Street estimates the company's earnings will increase at 6% annually through 2026. That makes the current valuation of 27 times earnings look expensive. I think investors should avoid this stock right now. Shares were cheaper in the first quarter, which could explain why Buffett added to Berkshire's stake. Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Domino's Pizza. The Motley Fool has a disclosure policy. Warren Buffett Holds Apple Stock Despite Tariffs and Buys a Restaurant Stock Up 4,500% in 15 Years was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
