Investors looking to buy the "next best thing" often miss some of the greatest investment opportunities of all time. Buying stocks in companies with market capitalizations of less than $100 million, or penny stocks with incredible potential for out-sized returns also carries a significant amount of risk.
As such, the best investors of all time tend to know that risk-adjusted returns mean much more than short-term returns over long-periods of time. While cannabis stocks or cryptocurrency companies may seem attractive, the level of risk investors take with these investments can in many cases mean that the risk-adjusted returns these investors receive are less than the risk-adjusted returns of companies such as Apple Inc. (NASDAQ:APPL).
Warren Buffett has maintained his affinity for investing in very large companies, in large part due to the fact that any investment less than $1 billion U.S. is far too small to make a dent in the company's overall earnings. With Apple now making up the largest investment for Omaha-based Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B), the move for the Oracle of Omaha to begin to look at technology companies with business models he can understand (Apple's is relatively straightforward), has resulted in the largest company traded on any North American exchange to now make up the biggest portfolio holding for Berkshire.
Apple's business model is one which Berkshire's Warren Buffett has grown fond of, specifically due to the company's wide moat - its ability to maintain very high levels of customer loyalty and product superiority over time. For investors looking to invest like the pros, I suggest taking a look at Buffett's portfolio holdings for a (short) list of tech companies to invest in.
Invest wisely, my friends.
