The Smartest Trillion-Dollar Stock to Buy With $1,000 and Hold Forever
Few companies have achieved a market cap of $1 trillion. All those who have are leaders in their respective industries and generally produce market-beating returns. While one could make an argument for investing in every single one of them, the best of the bunch might be the Warren Buffett-led conglomerate Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). The company, whose class B shares are changing hands for just under $529 apiece, is a brilliant stock to buy with $1,000 and hold forever. Here's why.Let's start with a story. In 2007, Buffett bet $1 million that an S&P 500 index fund would outperform a portfolio of hedge funds over a decade, when including the hedge funds' associated expenses. Ted Seides, a hedge fund manager, took the bet -- and lost.Here's the morale of the story: It's challenging to beat major indexes like the S&P 500 because these indexes are well-diversified. The S&P 500 is home to corporations across every industry and sector. Some are worth above $1 trillion, some less than $10 billion. Economic downturns affect them differently, so even when some aren't performing well, others are. Most investors looking to buy just one stock are better off "cheating" by getting a basket of them through an exchange-traded fund (ETF) that tracks the S&P 500 or some other major index -- or by purchasing shares of Berkshire Hathaway.Continue reading
Few companies have achieved a market cap of $1 trillion. All those who have are leaders in their respective industries and generally produce market-beating returns. While one could make an argument for investing in every single one of them, the best of the bunch might be the Warren Buffett-led conglomerate Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). The company, whose class B shares are changing hands for just under $529 apiece, is a brilliant stock to buy with $1,000 and hold forever. Here's why.
Let's start with a story. In 2007, Buffett bet $1 million that an S&P 500 index fund would outperform a portfolio of hedge funds over a decade, when including the hedge funds' associated expenses. Ted Seides, a hedge fund manager, took the bet -- and lost.
Here's the morale of the story: It's challenging to beat major indexes like the S&P 500 because these indexes are well-diversified. The S&P 500 is home to corporations across every industry and sector. Some are worth above $1 trillion, some less than $10 billion. Economic downturns affect them differently, so even when some aren't performing well, others are. Most investors looking to buy just one stock are better off "cheating" by getting a basket of them through an exchange-traded fund (ETF) that tracks the S&P 500 or some other major index -- or by purchasing shares of Berkshire Hathaway.
