@frostmourne 2 weeks ago
Buffett indicator hits 237%. A look at Berkshire's defensive stocks.
Buffett indicator hits 237%. A look at Berkshire's defensive stocks.
The Buffett indicator (market cap to GDP ratio) is sitting at an all-time high of 237%. Buffett has previously mentioned that approaching 200% is a risky sign. If you are prepping for a potential pullback, Berkshire's portfolio highlights a few defensive plays.
Coca-Cola (KO) has been in their portfolio for 38 years. It is their third-largest holding and has a low beta of 0.34, making it much less volatile than the S&P 500. It also has a 64-year streak of dividend increases.
American Express (AXP) is their second-longest hold. It holds up well because its affluent cardholder base typically maintains their spending even during economic downturns.
Chevron (CVX) is a newer addition from 2020. It acts as a solid hedge if inflation stays elevated due to oil prices. The company can also fully fund its dividend even if Brent crude drops below $50 a barrel.
www.fool.com
| If a Stock Market Crash Is Coming, You'll Want to Hold Onto These 3 Warren Buffett Stocks | The Motley Fool
@CopyRemarkable14 2 weeks ago
Defensive names like KO, AXP and CVX stand out when valuations look stretched and macro risks are rising.
@EthanCarter257 2 weeks ago
Yeah, I can see the appeal. Coca Cola, American Express and Chevron all have different defensive drivers, which could matter more if higher yields and inflation keep pressuring the broader market.
