4 Investments That Helped Warren Buffett beating out Bill Gates and Jeff Bezos. Could some of them be right for your own portfolio?
Warren Buffett has always done pretty well as an investor. But even for him, 2016 was an exceptional year. Shares of Berkshire Hathaway went up about 20 percent in value, increasing Buffett's personal fortune by about $12 billion, according to personal finance site GOBankingRates. He earned more last year than any other American, easily beating out fracking king Harold Hamm, Microsoft founder Bill Gates, and Amazon founder Jeff Bezos. Buffett's net worth is now just over $75 billion.
Most of these gains took place right after the presidential election, as the stock market rose in what some call the "Trump bump"--even though Buffett was a staunch Hillary Clinton supporter. But a lot of the earnings came from investing in some not-very-sexy, longstanding American business sectors, exactly the kind of play that has served the 86-year-old Buffett so well over his many, many years as an investor. Could some of them be right for your own portfolio?
Here's a quick look at where Buffett earned most of his money in 2016:
1. Banking/Financial Services
Buffett is a longtime investor in American Express and the financial sector in general, holding shares of U.S. Bancorp, M&T Bank Corp., and Goldman Sachs. He also invested heavily in Wells Fargo this year, and suffered the consequences when authorities discovered widespread account-opening fraud. The federal government fined Wells Fargo $185 million, and Berkshire Hathaway stock fell 4 percent. But the rest of the sector more than made up for those losses.
Buffett invested heavily in four airlines last year: Delta, United Continental, American, and Southwest. Delta shares lost 3 percent of their value in 2016, but the others did spectacularly well, with American up 10 percent, Southwest up 16 percent, and United Continental up an impressive 27 percent, according to TheStreet. And if oil prices remain low, 2017 could be an equally good year for the sector.
Buffett made a big bet on cable in 2014, investing in Charter Communications. That worked out very well for him last year, with Charter shares climbing 44 percent. In May, the company closed its acquisition of Time Warner Cable.
Will things look equally rosy this year? It's unclear, with growing numbers of Americans becoming "cord cutters" who want cable only, rather than the cable-and-TV or cable-TV-and-phone packages that are most lucrative for cable companies. But some observers predict that Charter will begin buying back shares this year, which may make it a better bet than other cable companies.
Buffett loves food, as an investor at least. He's known for his loyalty to Coca-Cola, both the drink and the stock. That didn't work out so well, with Coke's stock price down more than 3 percent in 2016. But he also is a big investor in Kraft Heinz and that stock is up 21 percent.
Source: inc.com, by By Minda Zetlin, Dated: 05.Jan.2017
Photo source: the Internet, thetopfivepercent.com