My Top 2 Stocks: Apple and Berkshire Hathaway


Stocks are like underwear: The flashy ones get all the visibility, but can cause a whole bunch of trouble. Today, I'm letting readers in on my trustiest pair of stocks, my two top cash holdings that help me sleep at night. I'll outline my bullish thesis and let you know whether I think there's a stock sale for you today.

Long on Buffett
When investors decide to put their money behind Berkshire Hathaway , their investing thesis often consists of two words: Warren Buffett. Who can blame them? It's hardly an original move to let one of the wealthiest men on earth manage your money, but creativity points don't make money.

My investing thesis begins with Warren Buffett, but it doesn't stop there. The Oracle of Omaha hasn't kept his good habits to himself, and Berkshire Hathaway has continually proven that it's more than its head honcho. Buffett's assembled a powerful team of level-headed, long-term managers, and the company's fundamentals continue to propel its financials.

Its sales have increased 50% in the past five years, while diluted EPS has shot up over 175%. Berkshire's book value lagged the S&P 500 with a 14% increase for 2012, but the company's market-beating 31% stock return should keep investors smiling.

^SPX Chart
^SPX Chart

Source: ^SPX data by YCharts.

Warren Buffett has the Midas touch, and he's got his finger on the pulse of three major industries that mainstream investors have shunned: solar, wind, and rail.

Its 579 MW solar farm purchase from SunPower and partnerships with First Solar and General Electric further affirm that Berkshire has key allies in its quest to turn America green. As an aspiring environmentalist, I can feel good that Buffett has chosen clean and increasingly efficient companies to lead his shareholders into the future.

The company's recent Heinz investment is the icing (or, rather, ketchup) on my cake: I'm now investing in something I personally know and love.

Apple's profit pie
Apple is getting cored by Mr. Market, but its 40% dip hasn't done much to sour my opinion of this stock. Recently, the world's largest company by market cap, this corporation needs no introduction.

As fellow Fool Eric Bleeker points out, Apple's 2013 trading frenzy is uncomfortably close to that of a penny stock. Institutional selling may have started the slide, but market rationality comes to those who wait. The company's massive margins are envious, but its true staying power comes from solid management and $100 billion in cash.

Naysayers point to Samsung as the commoditizer of Apple's iPhone and iPad, and they may be partially correct. But even if sales tighten, its suite of ever-growing products and services are what convince me of this company's long-term value.

Apple's brand packs a powerful punch, and I like what the tech company stands for. It's faced down some serious supply chain issues and has emerged as an environmental leader in a sector known for its dirty habits.

Common characteristics
It should come as no surprise that there are commonalities between Apple and Berkshire Hathaway. Both corporations have excellent management, first-rate branding, a long-term outlook, and -- in what I promise is more than shameless self-promotion -- official Motley Fool newsletter recommendations. Following the herd is not the fail-proof way to profit in the investing world, but these companies have won their Foolish seal of approval for all the right reasons.

But don't take my word for it. Find out for yourself by clicking the links below, where premium reports will lay out everything you need to know about Apple and Berkshire Hathaway. From their big, fat futures to their deepest, darkest secrets, check out these deep dives to make sure that, like I have, these two companies are ready to pull profits for your portfolio.

And as a final bonus, our co-founder, Tom Gardner, recently revealed his top two stocks as well. Apple and Berkshire Hathaway have gotten his thumbs-up, but be sure to click here to discover the surprising pair of companies that lay claim to his cash.

The article My Top 2 Stocks: Apple and Berkshire Hathaway originally appeared on

Fool contributor Justin Loiseau owns shares of Berkshire Hathaway, Apple, and General Electric.You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.The Motley Fool recommends Apple, Berkshire Hathaway, and H.J. Heinz. It owns shares of Apple, Berkshire Hathaway, and General Electric. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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