Although it’s essential to protect your investments, it’s equally important to remember that bear markets don’t last forever. While some began panic-selling, others have treated the downturn as an opportunity to buy assets at a discount. When the tide turns, this strategy will pay off handsomely — especially by investing in solid companies.
Although Apple has a line of beloved products, ranging from MacBooks to Apple watches, the tech giant is no longer solely interested in its flagship products. It is expanding into other markets, including the streaming service market and the buy now, pay later (BNPL) space.
Investments are also being made to develop new projects, such as the self-driving, electric Apple Car — and with nearly $200 billion in cash, few companies can compete with Apple’s financial resources.
As Apple’s revenues and margins increase, investors can feel confident in the company’s ever-growing moat. Apple also has a strong dividend history, making it the type of stock to buy and hold long-term.
While profit margins in the latest quarter dipped, revenue and growth were still solid considering economic headwinds. Alphabet’s revenue streams brought in a total of $69.69 billion in Q2, $40.68 billion of which came from Google Search — and there’s plenty of room for growth. Alphabet remains so profitable that it can continue investing heavily in its Other Bets division that has long been loss-making but offers upside optionality.
Alphabet is in a dominant market position, has better technology than its peers, and is still growing revenues rapidly. Further, it has a moat that’s nearly impossible to disrupt. With its share price down over 19% year to date, now is as good of a time as ever to buy in and hold long-term.
Berkshire Hathaway (BRK.B)
Berkshire Hathaway has a series of moats that cannot be overcome by heavily capitalized competitors. It’s also the largest company by revenues and assets in the United States. It’s not the largest company by market cap because, as an asset-rich company, it lacks the operational efficiencies enjoyed by Alphabet.
The company is highly profitable, and generated over $276 billion in revenue last year. Buffett has also built a significant cash pile over the years. In 2020, he started the year with nearly $150 billion in cash, which he’s been allocating over the past two years, spending billions on share repurchases.
Still, shares of BRK.B are now attractively priced. In recent months, share prices have dropped around 20%. However, they are up 3.8% over the past year and around 66% over the past five. With an unparalleled track record, wide economic moat, and A+ management culture, now is as good a time as any to snap up shares.