If I Could Only Buy and Hold a Single Stock, This Would Be It

Motley Fool
04-29
  • If you have to own one stock, what better than Berkshire Hathaway?
  • For one, you're gaining exposure to some of the most well researched portfolio of holdings that any conglomerate can offer.
  • The biggest selling point for this stock, is the monumental about of cash at its disposal; ranging well above $300 billion.

One stock. Imagine that's all you get. I write about Berkshire Hathaway (BRK.B 0.12%) a lot, and it's for good reason. Not only is the investment conglomerate run by arguably the greatest investor of all time, Warren Buffett, but the company is also sitting on an enormous cash pile that sets it up perfectly for any major fallout in the broader market. Long story short, this puppy is primed for success, and has the ammo available to continue making monumental moves even after Buffett's tenure is over.

Berkshire shares have outpaced the S&P 500 by 90.07% over the last five years (at the time of writing), and the gap is even wider the further back you go. Now, I know what you're thinking. This is because of Warren Buffett and the late Charlie Munger. That's certainly true, but I don't think Berkshire's ride is going to end simply if Buffett is no longer at the helm. The investment conglomerate has so much cash on hand, that it seems primed to take advantage of any weaknesses in the market.

The holdings

Berkshire's holdings are one of my primary reasons for saying if you only held one stock, this is the one. It gives you exposure much in the way an ETF might, except the spread of holdings are arguably chosen by the best investment team in the world. The biggest difference is you largely have a strict commitment to value investing. By owning Berkshire Hathaway, you have investment exposure to Apple (AAPL 0.60%), American Express (AXP 0.14%) and Coca-Cola (KO -0.06%) just to name a few.

Let's not forget that Berkshire Hathaway has much more than its stock holdings. It owns some iconic companies outright. Think GEICO, Dairy Queen, a host of car dealerships. Most notable in my opinion are the insurance businesses. Berkshire has famously used the "float" from its insurance businesses to invest in stocks and buy other companies. This stuff remains a crucial part of everyday life, and positions Berkshire to continue benefiting from its position within the industry.

If you want to be invested in the best opportunities in the market, without having to do all the work yourself, Berkshire Hathaway shares are arguably the best bet.

The cash cow

Berkshire Hathaway finished 2024 with $334.2 billion in cash/short term investments. Simply put, that's an incredible sum of money. Given the fallout since then in the market, it would seem that Berkshire and Buffett timed their cash position perfectly. It will be very interesting to see if the firm ends up buying during the current market woes that are stemming from President Trump's tariff war. In reality though, the company has the positioning to wait it out, and see what happens.

To me, the cash pile is really what makes Berkshire Hathaway the stock to own right now. Buffett largely credited the capital buildup to not seeing many opportunities in the market. My take on his stance is that he's probably right. Who are we to question the Oracle of Omaha? Nonetheless, this buildup in cash means that Berkshire Hathaway can take advantage of any developments that arise. It's such an astronomical sum of money, that Berskhire could literally buy Ford (F -0.15%) outright if it wanted to, and barely even flinch. I'm not saying that will happen! But it just gives you context of the scale that Berkshire is operating at.

If I had to own just one stock, this would undoubtedly be it.

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