For nearly six full decades, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett has been putting on a show for Wall Street. Whereas the benchmark S&P 500 has gained a healthy 33,000%, including dividends, since the affably named “Oracle of Omaha” became Berkshire’s CEO, Buffett has overseen just shy of a 5,000,000% aggregate return in his company’s Class A shares (BRK.A), as of the closing bell on April 25.
As you can see, there’s a very good reason why investors pay close attention when Warren Buffett has anything to say about investing, the stock market in general, or the U.S. economy.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
Although Berkshire’s $373 billion portfolio contains stakes in 45 stocks and two index funds, not all of the Oracle of Omaha’s holdings are considered equal.
In Warren Buffett’s latest annual letter to shareholders — Buffett has written a letter to his shareholders on an annual basis for nearly a half-century — he spoke of eight businesses that he and his team plan to hold stakes in “indefinitely.” Let’s take a closer look at these eight phenomenal companies.
No. 1: Coca-Cola
The first stock Buffett and his top investing aides, Todd Combs and Ted Weschler, have no intention of ever selling is beverage company Coca-Cola (NYSE: KO). Coca-Cola is Berkshire’s longest continuous holding (since 1988), and thanks to a minuscule cost basis of $3.2475 per share is generating a jaw-dropping annual yield on cost of nearly 60%!
One reason Coca-Cola has been a rock-solid investment for decades is because it’s a consumer staples stock. Regardless of how well or poorly the U.S. and global economy are performing, people are still going to buy basic need goods, such as beverages. This leads to predictable cash flow for Coca-Cola in virtually any economic climate.
Coca-Cola also enjoys virtually unsurpassed geographic diversity, with operations ongoing in all but three countries (Cuba, North Korea, and Russia). This means it’s bringing in predictable operating cash flow from developed countries, and moving its organic…
..
