The Best Trillion-Dollar Stock to Buy and Hold Forever

A select few companies have reached a market valuation of $1 trillion. These firms lead their industries and typically deliver outstanding returns. Among these giants, one company shines as the top choice for investors looking to invest $1,000 and hold onto their shares for the long term: the Warren Buffett-led Berkshire Hathaway (BRK.A, BRK.B). With Class B shares trading at nearly $529, this stock is a smart pick. Here’s why it stands out.

The Closest Thing to an Index Fund

Let's recount a notable event. In 2007, Warren Buffett made a $1 million wager that an S&P 500 index fund would outperform a portfolio of hedge funds over ten years, including the hedge funds' fees. Ted Seides, a hedge fund manager, took him up on this challenge and ultimately lost.

This story illustrates a key point: beating major indexes like the S&P 500 is no easy feat due to their inherent diversification. The S&P 500 includes companies from every industry, ranging from those valued over $1 trillion to those under $10 billion. Economic downturns affect these firms in differing ways, which means that not all will falter simultaneously. For most investors choosing to buy individual stocks, a more effective strategy would be to invest in a diverse selection via an exchange-traded fund (ETF) tracking the S&P 500—or to buy shares of Berkshire Hathaway.

Berkshire Hathaway owns a variety of subsidiaries across multiple industries, and its investment portfolio adds further diversity. While Berkshire may not perfectly match the S&P 500's range of sectors, it comes close, offering a competitive edge among other trillion-dollar enterprises.

Leadership as a Key to Success

Although some hedge funds occasionally outperform the market, those that do are often led by highly respected managers, many of whom achieve billionaire status. This highlights the significance of strong leadership in determining a company's success, a principle that applies even to hedge funds.

When it comes to market performance, few leaders can compare to Warren Buffett. The Oracle of Omaha has continuously outperformed benchmarks for decades. Berkshire Hathaway's long-term returns surpass those of the S&P 500.

Few companies can lay claim to such sustained success, and even fewer have had a single leader like Buffett at the helm for so long. Although Buffett is now in his 90s, and eventually will not be leading Berkshire, the future of the company appears secure. It is reasonable to believe Berkshire will uphold the principles and vision that ensured its success.

A great leader's legacy often involves raising and mentoring the next generation. While we might not know exactly how Buffett has prepared for his succession, we know he has been active in this endeavor. His selected successor is Greg Abel, the vice-chairman overseeing Berkshire's non-insurance operations.

Additionally, Buffett has cultivated a company culture founded on his investment philosophy—valuable lessons that have been imparted to many company leaders. The future of Berkshire Hathaway won't rely solely on one person, be it Greg Abel or another successor.

Therefore, with a well-established business, a diverse revenue stream, capable leadership, and enduring principles, Berkshire Hathaway is likely to keep performing well for years to come. For those eager to invest in a single trillion-dollar company, Berkshire Hathaway stands out as the best choice.

Investment, Stocks, Berkshire