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Investing is a notoriously noisy industry, but Warren Buffett has always managed to cut through the clutter with his simple yet powerful advice.
One of Buffett’s most overlooked nuggets of wisdom is about focusing on the right type of business.
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In a letter to Berkshire Hathaway shareholders, he once wrote that “the best business to own is one that over an extended period can employ large amounts of incremental capital at very high rates of return (1).”
“The worst business to own,” Buffett continued, “is one that must, or will, do the opposite — that is, consistently employ ever-greater amounts of capital at very low rates of return.”
Halfway through 2025, Buffett announced his decision to retire from his longtime post as CEO of Berkshire Hathaway at the end of the year (2). As of this writing, he ranks tenth on the Forbes real-time billionaires index, with a net worth of $148.1 billion (3).
Here are some great examples of his advice — and holdings — in action.
Apple (AAPL)
Buffett’s largest holding is Apple, the iPhone maker based in Cupertino, California. While Berkshire has been famously dumping shares of the company since 2024, Apple still makes up 20.5% of Berkshire’s portfolio, more than any other single holding (4).
The iPhone’s continued popularity, alongside solid high-margin segments for its services and software makes Apple an attractive investment.
Most tellingly, Apple’s return on invested capital (ROIC) is currently sitting around 47% (5). That’s exactly the kind of capital efficiency that Buffett described as the hallmark of a great investment. It means for every dollar Apple reinvests into the business, it earns nearly half of it back in profit annually. That’s Buffett’s investing principle in full force.
Robinhood offers a simple and convenient way to invest like Buffett in a wide variety of stocks, ETFs and options.
The platform provides commission-free investing in companies like Apple — meaning you won’t pay any extra fees to invest with Robinhood. It’s an easy and cost-effective way to add some of Buffett’s favorite stock picks to your portfolio.
New Robinhood customers can get a free stock once they sign up and link their bank account to the app.
Your stock reward can range from $5 to $200, and you can pick from top American companies like Apple.
Read More: Many Americans overpay for these 5 ‘must-have’ items — how many are on your list?
Coca-Cola (KO)
America’s most famous beverage maker has been in the Berkshire Hathaway portfolio for decades. Buffett started buying Coca-Cola (KO) stock in 1988. Given his portfolio currently holds 400 million shares (4), he could be earning over $800 million annually in dividends from his stake. And Coca-Cola’s consistent dividends suggest it lives up to Buffett’s adage, by employing its capital effectively for investors.
After all these years, KO is still the fourth-largest holding in the portfolio, currently accounting for close to 9% of assets. Coke has sustained its dominance in the global beverage market, thanks to enduring brand power, global distribution and consistent demand for its core products.
Coca-Cola’s ROIC is around 17%, which is solid, but much lower than Apple’s (6). While it doesn’t generate the same margin on its reinvested capital, Coca-Cola has proven its strong brand loyalty and stable cash flows over decades. Investors looking for a safe bet could consider adding this classic Buffett stock to their watch list.
You can invest in KO shares with Public, a commission-free investing platform that democratizes access to a wide range of assets, including stocks, ETFs, cryptocurrencies, treasuries and alternative investments.
Public has also just launched AI investing features to help you stay up-to-date with market trends using real-time insights.
Get expert help
Aside from looking to Buffett for investment ideas, there are plenty of other great resources available to help you make the most of your investing strategy.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Berkshire Hathaway (1); Fortune (2); Forbes (3); CNBC (4); FinanceCharts (5), (6)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.