Warren Buffett's Long-Term Track Record Pales Next To These 12 Stocks

Warren Buffett’s Berkshire Hathaway has become synonymous with investment excellence, delivering a 5,502,284% return since 1965, a staggering 19.9% compound annual growth rate (CAGR). Yet, a closer look at the 12 stocks comprising over 85% of Berkshire’s $290 billion portfolio reveals that individual holdings have outperformed the conglomerate’s average in specific periods and metrics. This article explores how these stocks—driven by value, moats, and shareholder-friendly practices—have sometimes eclipsed even Buffett’s legendary returns.

The 12 Stocks Powering Berkshire’s Portfolio

Berkshire’s top 12 holdings, detailed below, span technology, finance, energy, and consumer goods. While they collectively reflect Buffett’s philosophy, some have delivered returns exceeding the firm’s 19.9% CAGR, particularly in shorter-term or specific market cycles.

1. Apple (AAPL): The Tech Anomaly

• Market Value (Q1 2024): $67.2B (23.1% of portfolio)
• Return Multiple (since 2016): 5.4x
• Annualized Return: ~24.5%

Apple’s inclusion in Berkshire’s portfolio was a departure from Buffett’s aversion to tech stocks. Despite partial sales between 2018–2020—a “dumb decision” he later admitted—the stock’s 24.5% annual return over 8 years outperformed Berkshire’s overall CAGR.

2. Moody’s (MCO): The Pricing Power Champion

• Market Value: $11.6B (4% of portfolio)
• Return Multiple (since 2000): 39.2x
• Annualized Return: ~16.3%

Acquired for $248M in 2000, Moody’s credit rating business exemplifies Buffett’s “economic moat” strategy. Its 16.3% annual return over 24 years mirrors Berkshire’s CAGR, but its high-margin model and regulatory resilience make it a standout.

3. American Express (AXP): A Crisis Winner

• Market Value: $41.2B (14.2% of portfolio)
• Return Multiple (since 1990s): 26.5x
• Annualized Return: ~13.8%

Purchased during AmEx’s 1960s scandal and again in the 1990s, this stake grew dividends from $41M to $352M annually. While its 13.8% return trails Berkshire’s average, its consistency across decades underscores Buffett’s knack for undervalued, resilient businesses.

4. Coca-Cola (KO): The Forever Brand

• Market Value: $28.3B (9.8% of portfolio)
• Return Multiple (since 1988): 18.8x
• Annualized Return: ~12.6%

Acquired in 1988 for $1.3B, Coca-Cola’s 12.6% annual return aligns with Berkshire’s CAGR. Its global reach and dividend growth ($736M in 2023 alone) cement it as a “forever” holding.

5. Bank of America (BAC): A Crisis Buy

• Market Value: $29B (10% of portfolio)
• Return Multiple (since 2011): 2.6x
• Annualized Return: ~7.6%

Purchased during the 2008 financial crisis, BAC’s 7.6% return underperformed Berkshire’s average. However, its role in providing stable cash flows and dividends highlights Buffett’s long-term patience, even in weaker performers.

Why These Stocks Outperform (Sometimes)

1. Timing the Market:
2. Apple (2016): Bought during a tech downturn, it rode the iPhone and services boom.

3. Moody’s (2000): Acquired during regulatory scrutiny, it capitalized on credit demand post-2008.

4. Shareholder-Friendly Practices:

5. Apple and BAC: Both prioritized buybacks and dividends, boosting Berkshire’s returns through reduced share counts.

6. Sustainable Moats:

7. Coca-Cola and Moody’s: Brand strength and regulatory barriers created pricing power, shielding them from competition.

The S&P 500: A Benchmark, Not a Rival

While Berkshire’s 19.9% CAGR dwarfs the S&P 500’s 10.4%, individual stocks like Apple and Moody’s have surpassed even Berkshire’s average in shorter periods, proving that selectivity matters. For instance:

• Apple’s 24.5% annual return (2016–2024) outperformed Berkshire’s CAGR.
• Moody’s 16.3% return matched Berkshire’s average but with less volatility.

Conclusion: The Best of Buffett’s Portfolio

Berkshire’s success lies in its diversification of top performers. Stocks like Apple (tech), Moody’s (financial services), and Coca-Cola (consumer goods) have individually outperformed the conglomerate’s average in specific cycles, demonstrating the power of value investing with a long-term lens. However, Buffett’s genius is in compounding these returns over decades, not chasing short-term highs.

For investors seeking to replicate this success, focus on three pillars:
1. Moats: Invest in businesses with sustainable advantages.
2. Timing: Buy when fear is high, as with BAC in 2011 or Apple in 2016.
3. Patience: Hold for decades, as with Coca-Cola since 1988.

While no stock can guarantee Berkshire’s 550,000% return, the top 12 holdings offer a roadmap to compounding wealth—if you pick the right ones and stick with them.

In the end, Buffett’s legacy isn’t just about returns—it’s about principles that outlive the market’s noise. The 12 stocks above are proof that those principles, when applied with discipline, can defy averages.