What Would Buffett Do? Six Stocks to Buy Now

SMITH BRAIN TRUST -- China and other overseas stock market turmoil, plus the Fed waffling on an interest rate hike, are elevating the degree of difficulty for U.S. stock picking. “Whenever investors are feeling particularly perplexed,” notes Kiplingler, “they have a simple option. They can ask: What would Warren do?” The nation’s first personal finance magazine tapped David Kass, clinical professor of finance at the University of Maryland’s Robert H. Smith School of Business, to weigh in on Warren Buffett's philosophy in the context of six Buffett stocks to buy now. 

That list, in order, is Wells Fargo, Kraft Heinz, IBM, American Express, Visa and Mastercard. The latter two are picks by Berkshire investment manager Todd Combs. “Buffett has been an exemplary investor for 30 years, but [Ted] Weschler and Combs are exceptional investors, too.” Kass told Kiplinger’s. But investors shouldn’t expect to make a fast buck emulating the iconic Buffett.

“Buffett is usually looking for out-of-favor companies that are selling at a discount to their intrinsic value, Kass said. “He expects those bets to pay off in a matter of years—sometimes decades.” 

“Still, if you’re willing to get rich slowly, there’s no better mentor than Buffett. Standard & Poor’s 500-stock index has returned a respectable 9.9 percent annualized since 1965, when Buffett took control of a textile manufacturer called Berkshire Hathaway,” Kass said.

He further cited Berkshire’s book value (assets minus liabilities) as having climbed an annualized 19.4 percent. And Berkshire’s A shares, which go back to 1965, have done even better, soaring from roughly $15 to an astonishing $215,421, for a gain of 21.6 percent annualized. “Investors with patience could do very well following his lead,” he said.

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