The great thing about the stock market is that anyone can take part. With an investment of just £1,000, I could buy a portfolio of stocks similar to those owned by the ‘Oracle of Omaha’, Warren Buffett himself.
Indeed, there are a couple of companies in his portfolio that I would not hesitate to acquire right now.
My favourite Warren Buffett stocks
The first enterprise I would buy is the technology giant Apple. Shares in this company are currently changing hands for around £120 each ($170), suggesting I could acquire as many as eight for my portfolio, assuming I do not want to invest anywhere else.
This might not seem like a lot, but even Buffett had to start somewhere. Apple is currently the largest holding in his portfolio. The company has been returning vast amounts of cash to investors by repurchasing stock and hiking its dividend payout.
The Oracle likes the company because it has a solid competitive advantage. Consumers are essentially tied to its flagship iPhone as it is hard to move information on two different systems. This means they are more likely to upgrade year after year and pay more for the privilege.
That is not to say the firm does not face challenges. It is facing increasing competition from other smartphone producers and, like many other businesses, the group also has to deal with the global supply chain crisis.
Global network
Another Buffett stock I would buy is financial services group American Express. Best-known for its credit cards, the firm is one of the world’s biggest card providers. It makes money when consumers spend on their cards and with interest and fee income.
However, the organisation is facing pressure from competitors. Many offer lower fees and more flexibility for consumers. Overcoming these headwinds is going to be the company’s biggest challenge in the future.
Buffett has owned this stock for decades. He likes its brand power and global network. I am also attracted to these qualities. Each share is worth around £150 ($200) apiece, suggesting I can buy two for my £1k portfolio alongside four shares of Apple.
Rising profits
I would also buy Chevron for my portfolio. With oil prices surging, this oil giant can capitalise on the market’s growth. Management is already returning billions to investors with dividends and buybacks, and this trend appears set to continue.
Still, oil prices can be highly volatile. If they suddenly fall, the company’s fortunes could change overnight.
Despite this risk, I would buy two of the company’s shares for my Buffett-style portfolio with the remaining balance.
This is the approach I plan to use to replicate the Oracle’s portfolio with my own money. By starting with an investment of £1,000, I believe I can gradually increase my exposure with additional contributions while also potentially benefiting from asset price growth.
The post Warren Buffett stocks I’d buy with £1k appeared first on The Motley Fool UK.
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American Express is an advertising partner of The Ascent, a Motley Fool company. Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
