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Q: Hi team,

There is no urgency to this as it is just a question on portfolio weightings given Berkshire’s AAPL holdings. With the AAPL warning last week, Warren Buffett lost $3.8 billion (on paper), as AAPL is 21% of his holdings. Other major weightings are BAC and WFC at about 11% each and KO at 10%. Four stocks make up over 50% of his portfolio, a very concentrated bet. The downside as seen is that one wrong turn can drive big losses.

I don’t follow your portfolios all that closely as I have a U.S. focus, although I do hold several of your stocks. I believe your portfolios each hold 20-25 stocks, at 4 to 5% weighting each, which makes sense for diversification purposes and to avoid big losses on one stock.

Given these two different perspectives, and with Buffett viewed as the greatest investor of all-time, how has he done so well over the past 50 years with such a concentrated portfolio?

Your views are appreciated.
Dave

Read Answer Asked by David on January 08, 2019
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