The annual shareholder meeting for Berkshire Hathaway Inc. (ticker: BRK.A, BRK.B) draws tens of thousands of people to Nebraska who want to hear insight from CEO Warren Buffett, known as the Oracle of Omaha for his status as a legendary investor. But you don’t have to be a shareholder in the company to see into the Wall Street icon’s investing strategy. Thanks to regulatory filings, hedge fund managers and regular investors alike get a quarterly glimpse into the stocks Berkshire Hathaway owns. “With so many stocks to choose from, it can be challenging to decide which ones are worth investing in,” says Lyle Solomon, financial author and consumer finance attorney with the Oak View Law Group. “Fortunately, Warren Buffett is one of the most successful investors of all time. His portfolio provides an excellent starting point for regular investors looking for stocks with long-term potential.”

Apple represents the biggest single-stock chunk of Berkshire Hathaway’s marketable securities portfolio, so the iPhone maker seems like a good place to start. When it comes to competitive advantages, Apple’s brand name is impressive, says Creighton University finance professor Robert Johnson. Another economic moat cushioning Apple against its competitors is the costs in time and effort it would take customers to switch to other brands. “Apple customers are incredibly loyal and routinely trade in their iPhones when an upgraded model is made available,” he says. Apple also has plenty of efficient scale to ward off smaller competitors, and the company has plenty of what is called the “network effect” – when the value of a product increases as more people use that product, Johnson says. “Apple excels with respect to the network effect as the value of iPhones and iPads increases as more apps become available,” he says.

Oil and gas giant Chevron is another large Berkshire holding that investors should consider, says University of Maryland finance professor David Kass. It is “an extremely well-managed international oil company,” he says. Solomon points out that Chevron has a diverse business model, solid finances and regularly increases dividend payments to its shareholders. “But all of these things usually mean that it isn’t the best way to play short-term oil price changes, since Chevron’s steady-hand approach won’t maximize the upside or the downside,” Solomon says. “Chevron could be a good choice if you have a diversified portfolio and want to add an energy name, but only if you plan to hold onto it for a while.”

Another oil and gas producer in Berkshire Hathaway’s portfolio that Kass likes is Occidental Petroleum. It is also very well managed, he says. Plus, Berkshire may make a friendly acquisition of the company at a premium of at least 25% over its current market price, he adds. Daniel Dusina, director of investments at Blue Chip Partners, points out that companies with high earnings and cash flow relative to their market value – such as Occidental Petroleum – will be able to continue to perform well if the Federal Reserve continues to be aggressively hawkish. “With an immense amount of earnings power in an environment in which the Fed is looking to constrain growth, Occidental Petroleum will continue to shine,” he says. A risk would be that the Fed goes too far and tips the economy into a recession, which would dampen demand for oil and gas.

Banks have been a beneficiary of the Federal Reserve’s interest rate hikes as the central bank works to combat inflation. “Although inflation is slowing, it remains well above the 2% range the Fed targets; therefore, further rate hikes are likely in 2023 and beyond, but at a more gradual pace,” Solomon says. “Bank of America stands to benefit from this in 2023, possibly more than most of its rivals.” Solomon says Bank of America is a good buy now, with its low forward price-earnings ratio and solid dividend yield. “It should be able to ride out the stormy seas of 2023 and then flourish when the economy recovers in 2024 and well into the future,” he says.

If the Fed raises its key interest rate to the 5%-to-5.25% target range this year as the central bank projected in December, consumer staples such as Coca-Cola should perform relatively well and be less sensitive to interest rate hikes than the industrial and financial stocks in Berkshire Hathaway’s portfolio, Kass says. He also points out that KO should only experience a minimal decline in sales if a recession hits because of its status as a consumer staples stock. “Coca-Cola is so widespread that consumers buy it regardless of their financial situation,” Solomon says. “Because of this, it can increase prices whenever necessary without fear of losing customers.”

From diapers to detergent, this consumer staples giant is also considered a safer bet during economic downturns. After all, people are going to buy shampoo and toothpaste regardless of what the economy is doing. The company’s lower risk profile can also work well for investors nearing retirement or others with a lower risk appetite. It has a low level of debt compared to operating profits, making it well suited to handle challenging economic environments, and it has consistent revenue growth, Dusina says. “Strong financial positioning, a steady growth profile and consistent income distribution indicate that Procter & Gamble is a top pick for regular investors that have a lower risk appetite,” he says.

In addition to consumer staples companies, health care companies can be relatively safe bets during a recession. Johnson & Johnson straddles both of those worlds, selling lotion and mouthwash as well as prescription drugs. “When considering stocks that may provide better insulation from a recession, the defensive nature of the health care sector should be noted,” Dusina says. “Johnson & Johnson in particular should be targeted, as its strong balance sheet, vital offerings in the pharmaceuticals space and healthy income distribution could offer greater capital resilience than the broader market,” he says.

Semiconductors are increasingly found in more and more everyday items, from refrigerators to cars. The Internet of Things has been a key driver of this, and demand is likely to increase as artificial intelligence becomes more widespread. “Taiwan Semi is in a fantastic position to take advantage of these secular tailwinds as the world’s largest manufacturer of semiconductors,” Dusina says. “TSM has previously experienced periods of choppiness given that demand in the semiconductor industry has historically ebbed and flowed, and while there is potential for near-term volatility, we believe the level of intertwinement semiconductors now have with other industries will ultimately change the cyclical nature of semiconductor firms.”

• Apple Inc. (AAPL)
• Chevron Corp. (CVX)
• Occidental Petroleum Corp. (OXY)
• Bank of America Corp. (BAC)
• Coca-Cola Co. (KO)
• Procter & Gamble Co. (PG)
• Johnson & Johnson (JNJ)
• Taiwan Semiconductor Manufacturing Co. Ltd. (TSM)