Insider Monkey

12 Best Warren Buffett Stocks To Buy According to Hedge Funds

Ramish Cheema
Updated 10 min read

In This Article:

In this piece, we will take a look at the 12 best Warren Buffett stocks to buy according to hedge funds. For more stocks, head on over to 5 Best Warren Buffett Stocks To Buy According to Hedge Funds.

For newcomers, and sometimes seasoned professionals too, investing often feels like a daunting task. Choosing the right set of securities, commodities, currencies, or other investment vehicles to put one's money in, naturally carries the allure of profits. However, at the same time, the sword of losses is also always dangling, eager to strike at the slightest miscalculation.

The aftermath of the coronavirus and the generous stimulus spending by the American government changed stock market dynamics. Before the pandemic hit, most investing was done by professional investors, and the retail segment - namely ordinary people buying and selling shares - constituted a nearly negligible portion of total trading. The retail trader of today is quite different from the retail trader of the dotcom era where everyone bet on technology companies regardless of their fundamentals and ended up losing significant amounts of value as the market crashed.

Data from BNY Mellon shows that retail traders typically focus on individual stocks, and when they do, their attention often ends up disrupting the complex mathematical models deployed by hedge funds for trading. It adds that stocks such as GameStop Corp. (NYSE:GME) carry the potential of massive returns that can go as high as 3,500% but can also cause significant losses that range around 18%. At the same time, the relatively safer S&P 500 can provide 35% in returns and a maximum of 7.5% in losses. After inflation hurt the stock market again last year, retail traders were hesitant to put more of their money on the market. However, this does not mean that they are out of the picture for good. According to data from the investment bank JPMorgan, retail trading hit an all time high for 2023 by the close of January and as of data released in early February. A note from the bank outlined that between the final week of January and the start of the first week of February, the retail trade share of the total trading volume in America was a whopping 23%. This was an all time high record for the everyday trader since the last record was during the pandemic's peak. This record was 22%, and inflation had cut down retail trading to 15% of the total volume in 2022.

So, if retail traders can enter or leave the market on a whim and the hedge fund industry remains shaky, who can you rely on for trading advice? Well, one name that no one should disagree with is the legendary Warren Buffett - or the Oracle of Omaha. Mr. Buffett's journey on the stock market has made him worth a cool $110 billion as of March 2023 according to Forbes Magazine. This wealth is after Mr. Buffett's donation, which currently sits at $49 billion. His fortune comes courtesy of Berkshire Hathaway Inc. (NYSE:BRK-A), an investment holding company that buys ownership stakes in a wide variety of different companies such as technology, retail, banking, energy, automotive manufacturing, and more. In fact, Berkshire is also the most expensive stock on the U.S. market, with a share price that currently trades at $481,661. Over the past five years, the shares have appreciated by 62% and since they started trading, the gains stand at a whopping 52,238%. And you only thought that meme stocks could give you returns in thousands of percent, huh?

and

Recommended Stories